CCUS as a Competitiveness Tool for Europe’s Industrial Leadership

In 2026, the general consensus is that Europe is losing its edge and, at this rate, will fall entirely behind other geopolitical power players, such as the United States and China, in particular when looking at its industrial capacities. 

 Contrary to those geopolitical players, Europe made a commitment going beyond pure economic competitiveness: addressing the climate crisis is not an option and must permeate every single policy decision. This commitment to cleaning our industry must not be seen as a burden but as an opportunity, showcasing Europe’s potential.

 Greening our industry will rely on many different factors, especially the availability of green energy.

While, for the first time, the EU produces more renewable electricity than it does fossil-based electricity, and the share of renewables is growing consistently in our energy mix, the energy demands of certain industrial sectors remain higher and more complex than what can be met with this input.

 For those hard-to-abate sectors, carbon capture, utilisation, and storage (CCUS) technology constitutes the leading decarbonisation perspective. Despite facing a number of obstacles still, that keep it behind expectations, CCUS shows true potential to complement other decarbonisation efforts for those tricky industrial sectors, like steel, cement, and chemicals.

 Currently, one of the leading issues blocking widespread CCUS implementation in Europe, is its cost. With the cost of transport alone above 200 euros per ton of CO2, it towers above similar technology in China. 

 However, part of what makes CCUS an interesting tool for Europe’s leadership in particular is its financing mode. At EU level, the biggest source of funding dedicated to the deployment of functional CCUS is the Innovation Fund. This fund is not cash coming from the Member States, instead, it is entirely made up of revenue from the EU’s Emissions Trading Scheme (ETS). In a nutshell, it ensures that highly polluting industries pay for their emissions if have not been compensated otherwise, creating a virtuous cycle where bad players fund the development of good players that will soon help them abate their own emissions.

 Additionally, the deployment of CCUS technology is lagging behind with major infrastructural needs, especially in terms of transport. However, infrastructure is also one of the strengths of CCUS, as it is one of the only technologies that can be retrofitted on existing power plants, allowing their reconversion. Moreover, the transport infrastructure required by CCUS could also serve future needs and would thus constitute a much more strategic longer term investment. 

 Investing in the necessary CCUS skills could also support the development of other solutions such as carbon removal via direct air capture.

 A major struggle that still needs to be tackled is to strengthen the permissibility of CCUS across the EU. Several Member States are still lagging behind in terms of acceptance and implementation of this solution. Projects currently exist in Germany, Denmark, Netherlands, and soon Italy, as well as in Norway. However, a more integrated and coordinated permitting and planning approach, as well as the creation of lead markets across the EU, are needed to ensure a stronger development of this technology. 

 Finally, an added value of CCUS also lies in the ‘U’, utilisation. While carbon storage will provide a longer term solution to high pollution industries, utilisation can hit two birds with one stone: avoiding emissions from hard to abate sectors and supporting the production of green fertilisers and other sectors, such as fuel and building materials production. Even though the latter sectors should work on their own decarbonation paths, repurposing carbon into utilisable material creates an ideal closed loop scenario.

 The main pitfall of CCUS is not small: by believing it to be a miracle solution, the risk of setting aside other emission reduction efforts is clear.

CCUS cannot and must not be treated as a silver bullet for the entirety of our European industry. Instead, it must be deployed in a smart and targeted way, in combination with other decarbonisation efforts, to ensure we reach the targets set.

 In short, while CCUS is definitely not a silver bullet, it also constitutes a genuine opportunity for hard-to-abate sectors to remain in Europe, even while setting them firmly on a decarbonisation path. In the current context of geoeconomic tensions and the unreliable partners, the EU must secure its own production of steel and chemicals, to avoid increasing potential dependencies. These will be needed if we are serious about wanting EU-made cars and a strengthened defence industry. CCUS allows us to maintain our position amongst giants while still keeping our sights on our 2050 net-zero targets.