EU innovation fund: Most of it goes to CCS

Carbon Capture and Storage (CCS) featured highly when the European Innovation Fund for innovative low-carbon technologies shortlisted its first large-scale projects in November.

The projects will share about €1.1 billion, if investment decisions are made. Four projects include CCS, two of which are controversial “blue hydrogen” projects, i.e. hydrogen produced from fossil gas.
The Innovation Fund for innovative low-carbon technologies is a cornerstone of EU climate policy. It is huge in monetary terms and focuses on:

• highly innovative technologies
• big flagship projects
• innovative low-carbon solutions and small-scale projects that can bring about significant emission reductions.

The fund is now very well backed financially. The Commission gets its funding from the sale of ETS allowances (auctioning of 450 million allowances from 2020 to 2030). At the time of its instigation in June 2019 that would have been expected to be less than €10 billion. But as of February 2022, it may be closer to €45 billion, thanks to soaring carbon prices. The total project funding is even bigger. The EU only covers about half. The remainder is supplied by member states or private funding.

Exactly the same concept was launched in 2008, when the EU wanted to build 12 full-scale CCS plants by 2015. It was a total flop according to a report1 from the EU auditors in 2018. No carbon was captured, but the EU did not lose very much money either. Most projects failed and the EU got some money back. And there were not many takers in the first place, which was embarrassing for the EU.

To help them to distribute all these billions, the EU set up an assessment project called NEGEM (negative emissions) with funding from Horizon 2020 (from the EU research budget). The list of partners includes several huge CO2 emitters and CCS lobbyists, a cooperation between Shell, Italian gas giant Snam, Finnish oil company ST1, UK power company Drax (which burns biomass from the US), a few research organisations, three (3) branches of the pro-CCS International Energy Agency, Oxford and Cambridge universities (both recipients of considerable fossil company funding) and the Zero Emission Platform ZEP.

ZEP is undoubtedly the driving force, and can be described as a front organisation for Big Oil and the Norwegian Longship, a system for transporting CO₂ from harbours in Europe to storage sites under the Norwegian North Sea, initially from a Heidelberg Cement factory in Norway. ZEP members are:

• Northern Lights (Norwegian company that aims to commercially transport and store CO2 under the ocean floor in the Norwegian North Sea)
• Equinor (Norwegian oil and gas company, owns part of Northern Lights)
• Total Energies (French oil and gas company, owns part of Northern Lights)
• Bellona Foundation pro-CCS Norwegian NGO
• SINTEF (Branch of the Norwegian government)
• BP
• ExxonMobil
• Fortum Oslo
• Heidelberg Cement, the world’s fourth-largest cement producer and part of the Norwegian Longship CCS project.
• Massachusetts Institute of Technology, a respected university that is also closely associated with the fossil industry. It once hailed CCS as “the future of coal”2, heavily influenced the IEA and the IPCC WG 3 to adopt a pro-coal pro-CCS stance, and still refuses to divest3 from fossil fuels.
• Imperial College London, which received £39 million from Shell in 2017–2020 and whose president is on Chevron’s board.
• The Port of Antwerp, one of the seven shortlisted projects, Kairos@C (see below) by the Innovation Fund.

They include many of the same companies that receive or expect money from the Innovation Fund, in particular Fortum Oslo, Northern Lights and associated oil companies, Equinor and Heidelberg Cement.

Two of the projects are for “blue hydrogen” – producing hydrogen from fossil gas with carbon capture – a technology which most or all NGOs disapprove of.
“#BlueHydrogen is about as blue as the end of a smoke stack. Don’t be fooled, it’s just another excuse for the fossil fuel industry to keep pumping out pollution to destroy our planet”, commented Greenpeace4.
 

The “innovative low-carbon technologies” are, so far, largely CCS, but also include green hydrogen steel and solar panels, though their lobby organisations are not represented in the NEGEM assessment. The beneficiaries are mainly heavy carbon emitters more or less trying to reinvent themselves, refineries, chemical industry, and power industry. Another beneficiary is the Norwegian CCS industry, as much of the captured CO2 is to be shipped to and stored in the Norwegian North Sea.

Kairos@C in the Port of Antwerp, Belgium plans to collect CO2 from two hydrogen plants, two ammonia plants and an ethylene oxide plant. The CO2 will then be sent by ship to Norway or possibly somewhere else in the North Sea.

The project dates back5 to at least 2010. It just goes on and on.

The companies involved are BASF (German chemical giant), Air Liquide (French gas company that produces oxygen, nitrogen, argon, CO2 and other gases), and a consortium of Antwerp@C that includes Borealis (Austrian plastics producer), ExxonMobil (oil and gas), INEOS (British chemical company, also in fracking), Fluxys (Belgian, fossil gas), the Port of Antwerp and Total (oil and gas).

The seven projects pre-selected for Innovation Fund funding are said to reduce CO2 emissions by 14 million tonnes. As for the hydrogen and ammonia plants, CCS is a choice not to produce green hydrogen and green ammonia by electrolysis.

“It is better to focus on efficiency, innovation and electrification”, commented Joeri Thijs, spokesperson for Greenpeace Belgium⁶.

“Capturing carbon from fossil processes and dumping it underground, as BASF wants to do, is to shoot twice and miss both. Either you succeed and you have invested a lot of money, much of which is tax money, in continuing a fossil system. Or you fail, and the CO2 still ends up in the atmosphere due to leaks in the system. We therefore ask for a different approach: directly reducing CO2 emissions at the source”, Thijs said.

TANGO is a project to develop next-generation solar cells. It will develop an industrial-scale pilot line for the manufacture of innovative and high-quality bifacial heterojunction (B-HJT) photovoltaic (PV) cells. It is led by Enel Green in Catania, Italy. Heterojunction means that the cell has two or more layers that capture the light more efficiently. HJT cells also degrade slower over their lifetime.

ECOPLANTA is a project for transforming municipal solid waste (household garbage) into methanol instead of sending it to landfill. The plant will process some 400,000 tonnes of non-recyclable municipal solid waste from nearby municipalities and will produce around 220,000 tonnes of methanol annually. This methanol will be used as a feedstock to produce renewable chemicals or advanced biofuels, cutting GHG emissions by some 200,000 tonnes each year and reducing waste that would otherwise end up in landfills, according to Enerkem, a small company in the waste business that is working on this project with Suez Recycling, Recovery Spain and oil giant Repsol.

The project does not involve CCS, but Enerkem claims to be in the business of “carbon recycling”. This is conceptually closer to CCUS than it is to the waste hierarchy of reduce, reuse, recycle, where recycle is supposed to mean making paper from paper and plastic from plastic, rather than recycling carbon atoms. The plastics industry’s preferred hierarchy is 1) landfill or burn 2) molecular recycling 3) recycle, reuse, reduce.

The K6 Program intends to produce cement with CCS in France. It is backed by Air Liquide (again) and the German cement lobby organisation VDZ, which aims to keep on using Portland cement as a construction material, rather than new materials or other cements.

HYBRIT in Sweden is a pioneering project to replace coal and coke with green hydrogen for reducing iron oxide ore to steel in north Sweden. The hydrogen is to be produced by wind power, which is rapidly being expanded.

BECCS@STHLM is also in Sweden, see article below.

The SHARC Sustainable Hydrogen and Recovery of Carbon project in Finland will replace fossil hydrogen at Neste’s refinery with green and blue hydrogen. The exact mix of green and blue is not known, but the whole concept of blue hydrogen (fossil + CCS) is contested. Neste is an oil and gas company, majority-owned by the Finnish government and is linked to Fortum and Norwegian Equinor in several ways.

Fredrik Lundberg

1 https://www.endseurope.com/article/1648572/auditors-criticise-failure-cc...
2 https://energy.mit.edu/wp-content/uploads/2007/03/MITEI-The-Future-of-Co...
3 https://mitsloan.mit.edu/ideas-made-to-matter/mit-divest-all-ideas-welco...
4 https://twitter.com/Greenpeace/status/1429367818500263944
5  https://cordis.europa.eu/project/id/241381/reporting
6 https://www.nieuwsblad.be/cnt/dmf20211122_98527353

Table: Projects funded by the European Innovation Fund for innovative low-carbon technologies.