Carbon Market – 23.07.2024

The price of the European carbon certificate, EUA, dropped to €64.79 t/CO2 (Monday’s futures price on July 22, 2024, at the ICE ECX exchange in London), falling below the €65t/CO2 level that had kept the market stable since the beginning of July. This decline was influenced by forecasts of high temperatures and increased energy production from renewable sources, thus weak demand.

New Trends in the Market: Carbon Capture and Storage (CCS)

It is estimated that the EU’s oil and gas industry will store 42 million tons of CO2 annually by 2030. This achievement, while remarkable, falls short of the EU’s ambitious target of 50 million tons annually.

According to the oil industry’s trade association, this gap highlights both the progress made and the future challenges on the European Union’s decarbonization path. Nevertheless, achieving the EU-wide goal requires enhanced collaboration, regulatory support, and the accelerated implementation of carbon capture and storage projects.

The push towards carbon capture and storage (CCS) is part of the EU’s broader strategy to mitigate climate change and fulfill its commitments under the Paris Agreement. CCS technology is seen as a crucial tool in reducing greenhouse gas emissions from hard-to-decarbonize sectors, such as heavy industry and power generation.

Several key projects in Europe are leading this initiative. For example, the Northern Lights project in Norway aims to store up to 1.5 million tons of CO2 annually in its initial phase, with plans for expansion. Similarly, the Porthos project in the Netherlands is set to store approximately 2.5 million tons annually by 2026.

Despite these advances, the industry faces obstacles, including high costs, regulatory barriers, and the need for robust CO2 transport infrastructure. To bridge the gap to the 50 million ton target, stakeholders emphasize the need for increased investment and supportive policies from the EU and its member states.

The coming years will be crucial as the EU’s oil and gas sector intensifies efforts to boost CCS capacity. Achieving the 50 million ton target is not just about technological advancements but also about ensuring a sustainable future for Europe. As the world approaches climate tipping points, the role of CCS in the EU’s climate strategy becomes increasingly prominent in the transition to clean energy.

Sources: European Commission, Carbon Pulse, Carbon Credits