The EU’s longer-term strategy describes how Europe can guide the way to climate neutrality by investing in a collection of realistic technological solutions, aligning actions in key areas such as industrial finance, policy or research. It builds on the new energy policy framework established under the Clean Energy for All Europeans Package. To get to net-zero, the strategy specifies that key technological innovations around energy efficiency will play a crucial role. Moreover, the burning of fossil fuels must slow significantly, and eventually cease to emit. To do this, it is expected that carbon capture and storage will play an essential part in the industries eventual carbon neutrality.
Unlike other initiatives, the strategy aims to foster joint action through seven strategic areas including:
- Clean, safe and connected mobility
- Energy efficiency
- Deployment of renewables
- Competitive industry and circular economy
- Infrastructure and interconnections
- Bio-economy and natural carbon sinks
- Carbon capture and storage to address remaining emissions
Together, these areas will also allow for continued modernisation and the improvement of European welfare (ec.europa.eu/clima/policies/strategies/2050_en).
In 2014, the 2030 Climate and Energy Framework was adopted by the commission. This incorporates EU-wide targets and policy objectives for the period of 2021-2030. Key targets for 2030:
- At least 40% cuts in greenhouse gas emissions (from 1990 levels)
- At least 32% share (in member states) for renewable energy
- At lease 32.5% improvement in energy efficiency
Under this framework, member states commit to build an energy system that drives affordable energy for all consumers, increases energy security, reduces import dependency, creates jobs and growth while bringing overarching environmental health benefits. In turn, this will create greater certainty for investors while synergising EU country efforts (2030 climate and energy framework).
Furthermore, member states are obliged to adopt and integrate National Climate and Energy Plans (NECPs) for the same 2021-2030 period, designed to support member states to plan and report on how they will achieve their climate and energy objectives and combine to reach the EU target. In parallel the framework also requires that people adopt National long-term strategies (NLTS) to 2050, which ensure consistency between member states long-term strategies and the EU 2050 climate targets (NECPs).
Funded wholly by the EU ETS, access to up to €10 billion is highly possible (depending on the carbon price). On its inflection, it is expected that the fund will dramatically alter the risk profiles of projects and their market needs, attracting both private and public resources. More information on the EU ETS can be found here.
The Commission will manage the Innovation Fund with ongoing support from a public implementation body; all member states are asked to provide feedback on any key decisions which includes calls for proposals and pre-selected projects. It is expected that a first call for proposals will commence in 2020, followed by regular calls until 2030. Funding will be available for up to 60% of additional capital and operational costs associated with innovation.
Innovation Fund grants are totally inclusive and can be combined with other sources of EU funding, including the Modernisation Fund, Horizon Europe and the Connecting Europe Facility (Innovation Fund).
In succession to Horizon 2020, the commission has developed Horizon Europe, an ambitious €100 billion research and innovation programme. Horizon Europe encompasses several key research areas, each of which have been set up under 5 operational bases referred to as mission boards. These include:
- Adaptation to climate change including societal transformation;
- Healthy oceans, seas, coastal and inland waters;
- Climate-neutral and smart cities;
- Soil health and food.
The incorporation of these missions will help to increase the effectiveness of funding by pursuing clearly defined targets; it is expected that these mission areas will increase EU scientific funding by 50% over the 2021-2027 period.
Thus far, the commission has engaged policy experts to develop studies, case studies and reports on how a mission-oriented policy approach will work. In addition, the programme will support European partnerships with EU countries, the private sector, foundations and other stakeholders, with the aim of delivering global challenges and industrial modernisation through concerted research and innovation efforts. As such, Horizon Europe will be a key funding mechanism for climate technologies, including carbon capture (Horizon Europe).
The Connecting Europe Facility (CEF) is a key EU funding instrument to promote growth, jobs and competitiveness through targeted infrastructure investment at the European level. Under its despatch sits three key funding sectors; Energy, Telecoms and Transport, with CEF Energy providing an array of financial opportunities for developing CCS infrastructure, to address the void between current investment flows and the energy sector. This will include the application of commercial grants to support construction costs, funding for cross border CO2 transport networks and infrastructure and to ensure complete commercial viability. The CEF is open for CO2 networks, it is a key funding mechanism to enable the construction of infrastructure (across borders) which can enable the deployment of CCS at scale (ec.europa.eu/inea/en/connecting-europe-facility).
Projects are assessed on several criteria, including cross-border dimensions, state of maturity, and the extent to which the project will remove bottlenecks and energy isolation. Projects must also hold Project of Common Interest (PCI) status, having previously been awarded to a list of projects that display significant impacts on energy markets and market integration across at least two EU countries (PCI).