The energy sector is the largest contributor to German CO2 emissions: in 2021 the energy sector emitted 35% of total CO2 emissions

Simon

Hendrik

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This is part two of a two-part series on carbon capture, use and storage (CCUS) in Germany. You can find part one <a href="https://illuminem.com/illuminemvoices/carbon-management-in-germany-from-zero-to-climate-and-industrial-necessity" target="_blank" rel="noopener">here</a>.
In this second article of the series on carbon capture, use and storage (CCUS) in Germany, we analyse the emission profiles of German industries and associated CCUS potentials and costs.
<h2>Focus on industrial emissions</h2>
The energy sector, specifically electricity generation in coal and gas power plants, will most likely be excluded from any CCUS activities as the&nbsp;<a href="https://carboneer.earth/en/carbon-managment-and-ccu-s-in-germany/">Carbon Management Strategy</a>&nbsp;(CMS) of Germany is geared towards residual (hard-to-abate) and process-related emissions in the industrial sector. Still, the energy sector is the largest contributor to German CO2 emissions: in 2021 the energy sector emitted 238 Mt of CO2,&nbsp;accounting for 35% of total CO2 emissions. Most of the emissions from existing coal and gas power plants are however expected to be replaced by renewable sources or green hydrogen utilization, therefore limiting the scope for CCUS applications. Some potential however remains, mostly through CCUS applications in waste and biomass power plants.
The focus for CCUS activities will thus be on the industrial sector, the second largest contributor to CO2&nbsp;emissions in Germany. In 2021, industrial facilities were responsible for 168 Mt of CO2&nbsp;emissions, accounting for 25% of total CO2&nbsp;emissions. The largest share of industrial emissions originates from large installations that are subject to the EU Emission Trading System as well as from waste incineration facilities. These installations emitted a total of 137.8 Mt CO2&nbsp;in 2021 (cf. Figure 1), with largest contributions from steel production (31.5 Mt), waste incineration (23.3 Mt), cement production (20.1 Mt), the production of chemicals (16.9 Mt), and lime (6.4 Mt).
Figure 1. Sectoral shares of German industry (EU ETS facilities) and waste incineration CO2 emissions in 2021
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/89647627a758f61d149a4a139d9e4883c3ded5c1.png?" alt="Sectoral shares of German industry (EU ETS facilities) and waste incineration CO2 emissions in 2021" />Source: carboneer, data sources: DEHSt (2022), EEA (2022)
<h2>The CCS potential in the industrial sector in Germany</h2>
Three quarters of emissions in the industry are related to energy use and are to be abated using renewable energy. Approximately one quarter of the industrial emissions are process-related and originate from the utilization of carbon-containing materials in production. Process-related emissions are difficult to avoid and the five major climate neutrality studies for Germany (<a href="https://illuminem.com/illuminemvoices/carbon-management-in-germany-from-zero-to-climate-and-industrial-necessity" target="_self">see part I</a>) highlight the significant role of CCUS for emission mitigation or CO2-recycling in industry.
When calculating the CCS potential, it is important to notice that not all process-related emissions can be captured. Depending on industry and the dispersion of emission sources, the share of capturable emissions ranges from 45% in the chemical industry to 90% for waste incineration facilities. Following this methodology, the amount of technically capturable CO2 emissions from large industrial and waste incineration facilities in Germany amounts to 44.2 Mt (cf. Figure 2).
Figure 2. CCS potential in selected industrial sectors in Germany
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/6a46d28745bd1021670a3c0e3fcb1fda5fa13d7a.png?" alt="graph on CCS potential in selected industrial sectors in Germany " />Source: carboneer
Considering economic feasibility and alternative technological pathways for decarbonization, the ultimately relevant CCUS potential shrinks even further. While lime, cement, and waste incineration will need to capture CO2&nbsp;due to a lack of technological alternatives, the use of green hydrogen may be the primary decarbonization route for steel production. The chemical industry will continue to depend on carbon-containing materials to produce basic chemicals, but might shift from fossil to biogenic and atmospheric sources, or build on recycled carbon from other industrial sectors. A more detailed analysis of the different sectors and their CCUS readiness will follow in future articles of this series.
<h2>Infrastructure and costs</h2>
To enable the transport of captured CO2&nbsp;to potential storage sites or consumers, suitable infrastructure is necessary. The development of CO2&nbsp;transport infrastructure is critical for the success of carbon management, and the pace of its development can significantly influence the entire progress of CCUS applications. By 2030, first large-scale CO2&nbsp;transport infrastructures in Germany are necessary, where the mode of transport will depend on the scale and intended use of the CO2. Rail, trucks, ships, and pipelines can all be viable options. A pipeline connection is particularly useful for large industrial sites and CCUS clusters that generate significant amounts of CO2&nbsp;to be transported over longer distances to storage facilities. However, for decentralized sites such as lime and cement plants, the most efficient handling of captured CO2&nbsp;has yet to be identified. Local production of synthetic fuels is one of the possible options. A country-wide CO2&nbsp;pipeline system connecting all major point sources is unlikely to develop, but pipelines for large industrial clusters will be necessary in the medium to long term. Furthermore, some oil and gas companies are already working on developing pipelines for exporting CO2&nbsp;generated in Germany to storage sites in the North Sea.
While CCS costs (including capture, transportation, and storage) are relatively homogeneous across sectors, the current unavailability of storage capacity within Germany makes pure CCS implementation relatively expensive (cf. Figure 3) when compared to a country such as the United Kingdom, which has better access to storage sites (e.g. the North Sea). High costs of approximately 200 EUR/t CO2 for CCS applications in Germany already point at the need for incentive and support mechanisms to bring carbon management to an industrial scale.
Figure 3. Average CCS cost in EUR/t CO2 in Germany and the UK
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/ee5818551c5dc71411cbf9944464fbab865fb7f4.png?" alt="Average CCS cost in EUR/t CO2 in Germany and the UK" />Source: carboneer; data source: CATF, 2022
Policymakers in Germany have to make the decision whether depleted natural gas reservoirs and saline aquifers in northern Germany and under the German North Sea are suitable CO2&nbsp;storage sites, or if exporting CO2&nbsp;through international collaborations and storing it in the North Sea and Norwegian Sea is a more politically acceptable option.
In the upcoming articles of this series, we investigate the attractiveness and readiness of the above industrial sectors for CCS applications based on indicators such as the regulatory framework, competing decarbonization options and other sector specific characteristics.
This article is based on a study by carboneer for the Trade Commissioner Service of the Canadian Embassy to Germany. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
<h3>Sources</h3>
<a>CATF (2022)&nbsp;</a>The cost of carbon capture and storage in Europe. Available at: https://​www.catf.us​/​ccs-​cost-​tool/​ (Accessed: 27 March 2023).
<a>DEHSt (2022)&nbsp;</a>Treibhausgasemissionen 2021: Emissionshandelspflichtige station&auml;re Anlagen und Luftverkehr in Deutschland (VET-Bericht 2021). Available at: https://​www.dehst.de​/​SharedDocs/​downloads/​DE/​publikationen/​VET-​Bericht-​2021.pdf​?​__blob=​publicationFile&amp;​v=​7 (Accessed: 27 March 2023).
<a>EEA (2022)&nbsp;</a>Industrial Reporting database, May 2022,&nbsp;7 March. Available at: https://​www.eea.europa.eu​/​data-​and-​maps/​data/​industrial-​reporting-​under-​the-​industrial-​6 (Accessed: 27 March 2023).
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Carbon management in Germany (II): emissions, potentials, and costs for CCUS

The implications of a climate neutral Germany in 2045 on the demand for carbon management and carbon capture use and storage (CCUS)

This is part one of a two-part series on carbon capture, use and storage (CCUS) in Germany. You can find part two <a href="https://illuminem.com/illuminemvoices/carbon-management-in-germany-ii-emissions-potentials-and-costs-for-ccus" target="_blank" rel="noopener">here</a>.
In this article, we look at the implications of a climate neutral Germany in 2045 on the demand for carbon management and carbon capture use and storage (CCUS). The topic has long been neglected in public debates but experiences a recent revival. CCUS can serve the dual purpose of (i) supporting the decarbonization of industrial facilities, and (ii) supplying especially the chemical sectors with CO2 as a resource for the production of primary products.&nbsp;
<h2>A brief history of carbon capture policy in Germany</h2>
While research on large-scale underground CO2 storage started in 2004 at the Ketzin pilot site close to Berlin, industrial carbon management activities (carbon capture, utilization and storage - CCUS) are virtually absent in Germany to the present. The European Union&rsquo;s Carbon Capture and Storage Directive from 2009 provided its Member States with a framework to implement corresponding national legislation. The German Carbon Dioxide Storage Act (Kohlendioxid-Speicherungsgesetz &ndash; KSpG) came into force in August 2012 (cf. figure 1) but failed to establish favourable conditions for CCUS applications.&nbsp;
The storage discussion at that time in Germany was closely linked to the continuation of coal power generation and met strong public resistance. The expansion of renewable energy generation was at the center of potential mitigation pathways and CCUS applications were considered risky, especially with regards to cost and safety criteria. Giving in to the general scepticism, the KSpG only allowed for applications with storage capacities below 1.3 million tons of CO2, and most states prohibited underground CO2 storage. No single storage project has been developed until the legal deadline for project submissions by the end of 2016. Currently, it is therefore not possible to store CO2 underground in Germany and only a limited amount of capture and utilization projects are operative.&nbsp;
Carbon management has reemerged in the political arena in Germany only recently. The northwestern industrial state of North Rhine-Westphalia published its Carbon Management Strategy in 2021 and the National Carbon Management Strategy is currently being developed by the Federal Ministry for Economic Affairs and Climate Action (BMWK). We covered the national German Carbon Management Strategy in detail in <a href="https://carboneer.earth/en/carbon-managment-and-ccu-s-in-germany/">this article</a>.&nbsp;
Figure 1. Timeline and relevant events on carbon management in Germany 
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/06e500fa53d7f9b57583e618c2c99d0a36857866.png?" alt="Timeline and relevant events on carbon management in Germany" />
Source: carboneer
<h2>Carbon management is a central component of climate neutrality</h2>
With tightening climate targets at the EU and German levels, it is becoming increasingly clear that climate neutrality by mid-century or even 2045 will not be achieved without large-scale capture, utilization and long-term storage of CO2.&nbsp;&nbsp;
While CCUS experienced a slow uptake in German policymaking, academic research unanimously concludes that carbon management, including carbon capture, utilization and storage, as well as atmospheric carbon removal are necessary to reach climate targets. Since the electricity sector can be largely decarbonised through the expansion of renewables, the focus of carbon management in Germany lies in the industrial sector. Especially process-related emissions are hard to abate and might only be reduced through carbon capture solutions. Figure 2 shows the projections of five research projects on the sources of CO2 that will be captured in 2045, at the time when Germany seeks to achieve climate neutrality.&nbsp;
Figure 2. CO2-capture according to application and source in 2045 (2050 for BMWK)
<img style="display: block; margin-left: auto; margin-right: auto;" src="https://illuminem.b-cdn.net/articlebody/422c192e98d9b726285a4eeae0f8993c0102154a.png?" alt="CO2-capture according to application and source in 2045" />
Source: carboneer; data sources: Agora: Prognos, &Ouml;ko-Institut, Wuppertal-Institut (2021), BDI: BCG (2021), dena: Deutsche Energie-Agentur (2021), BMWK: Fraunhofer ISI et al. (2022), Ariadne: Luderer, Kost and S&ouml;rgel (2021)
Building up the capacity to capture between 35 and 70 Mt of CO2 from different industries, or 5-10% of current German GHG emissions, requires targeted and substantial investments over the coming two decades. Investments will only materialize if determined policymaking creates an enabling investment environment and delivers clear rules and guidelines on topics such as:
<ul>
<li style="font-weight: 400;" aria-level="1">Incentive mechanisms for capture, utilization and storage</li>
<li style="font-weight: 400;" aria-level="1">Transport and storage infrastructure provision and regulation</li>
<li style="font-weight: 400;" aria-level="1">Regulation of CO2 imports and exports</li>
<li style="font-weight: 400;" aria-level="1">GHG accounting (especially in utilization projects)</li>
</ul>
<h2>From waste to resource: how much storage is actually needed?</h2>
While we will take a deep dive into different industrial sectors&rsquo; CCUS conditions and dynamics in upcoming articles of this series, we already want to draw your attention to some insights from our latest analysis. The technical potential across German industries predestined for CCS applications (steel, cement, lime, chemicals, waste incineration) amounts to 40-50 Mt CO2. Here we consider process-related emissions only, as other emissions can and must be decarbonised through other solutions, such as renewable energy, electrification, or green hydrogen.&nbsp;
On the other side, the demand for carbon in the chemical industry in Germany in 2045 is estimated to be approximately 50 Mt CO2. This already points to a new paradigm and an industrial ecosystem, where CO2 will not necessarily be sequestered and stored underground in northern Germany, under the North Sea or even being exported to Norway, Denmark, or the Netherlands. Quite the opposite, CO2 might become a scarce raw material in the industrial carbon cycle pushing the demand for CCU applications. Furthermore, the updated regulation on the EU Emission Trading System allows regulated entities to use CCUS instead of surrendering emission allowances. Undoubtedly, this option further increases the demand for CCUS applications.&nbsp;
Consideration of policy interactions and emerging new industrial paradigms are crucial for successful carbon management at the national and EU level. Topics that require further analysis are amongst others:
<ul>
<li style="font-weight: 400;" aria-level="1">Necessary CO2 transport capacity within Germany and Europe</li>
<li style="font-weight: 400;" aria-level="1">Ultimate storage capacities needed across Europe</li>
<li style="font-weight: 400;" aria-level="1">Quality criteria of CO2 for transport and utilization</li>
<li style="font-weight: 400;" aria-level="1">Build-up of capture, transport and storage capacities in sync</li>
<li style="font-weight: 400;" aria-level="1">Development of industrial carbon management clusters</li>
</ul>
The next article in this series on carbon management in Germany will deal with the current industrial emissions, the CCS potential in those industries and cost estimates for capture, transport, and storage. In the meantime, feel free to reach out with feedback and questions, which we are happy to discuss.&nbsp;
This article is based on a study by carboneer for the Trade Commissioner Service of the Canadian Embassy to Germany. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Hendrik Schuldt

Hendrik Schuldt

Carbon management in Germany (II): emissions, potentials, and costs for CCUS

Carbon management in Germany (I/II): from zero to climate and industrial necessity

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