CCS is one of the most controversial topics in climate policy: In some industrial processes, the capture and storage of CO2 is essential if we want to achieve climate neutrality. At the same time, it can prolong the life of fossil infrastructure or even promote new construction. The challenge is to enable only the sensible applications.
The simple solution – limiting CCS in the law to industrial sectors where there is no alternative – apparently could not be enforced in the government. Therefore, Minister for Economic Affairs and Climate Action, Robert Habeck, took a different approach: CCS will also be allowed in gas-fired power plants, but there will be no state subsidy for it. As a result, the technology will practically play no role in power plants, the minister assures. Once again, the government refrains from making a clear commitment out of consideration for coalition harmony. Bernhard Pötter and I analyze the political dimension of the agreement, while Nico Beckert takes a closer look at the economic framework conditions for CCS.
In other news today, there are rather sobering reports: Jonas Gerding reports from Kinshasa that the CO2 storage capacity of rainforests has apparently been significantly overestimated. And in China, emissions continued to rise last year, contrary to some hopes.
After extensive preparation, Economy Minister Robert Habeck presented on Monday the key points of the German Government’s Carbon Management Strategy (CMS) and an initial draft law for implementation. However, the debate is likely far from over, as sharp criticism arises not only from environmental organizations but also from the Greens and SPD, contradicting their previous positions. Moreover, it partly contradicts Germany’s stance at COP28.
It is undisputed that Carbon Capture and Storage (CCS) is necessary to achieve climate neutrality for certain industrial applications where emissions cannot be avoided in other ways or only with great difficulty. These include cement and lime production, parts of the basic materials industry, and the incineration of unavoidable waste. Both the Greens and the SPD agreed to the use of CCS in these “hard to abate” sectors after lengthy discussions last year.
This was also Germany’s position before and during the climate conference in Dubai in the international debate on phasing out fossil fuels. Germany advocated that CCS should only be used in the “hard to abate” sectors of the industry and not in the energy sector. Foreign Minister Annalena Baerbock warned in an interview with Table.Media that CCS should not be a substitute for expanding renewables, which should completely replace fossil fuels in the electricity sector.
Before COP28, Germany advocated within the EU to keep CCS out of the energy system as much as possible and achieved a formulation calling for a “gradual transition to an energy sector predominantly free of fossil fuels“. However, the government’s “Climate Foreign Policy Strategy,” led by the Foreign Office, included a CCS-friendly formulation.
However, the current key points and draft legislation go far beyond these positions: Gas power plants should also be able to use CCS and be connected to the planned pipeline network. Habeck considers this unproblematic. “I do not fear that the decarbonization of the energy sector will be jeopardized by this,” he said on Monday. Unlike industrial applications, CCS will not be financially supported in the power plant sector – unlike the use of hydrogen. Therefore, CCS is unlikely to be used in practice for gas power plants, according to the Economy Minister.
Habeck brought prominent support for this thesis to the press conference: Climate economist Ottmar Edenhofer stated that he sees “no risk of a fossil lock-in” through the planned regulation. The decision on whether CCS will be used in gas power plants can be “safely left to the market,” said the director of the Potsdam Institute for Climate Impact Research (PIK).
However, Edenhofer makes an important condition for this: Methane emissions arising from the extraction and transport of natural gas must also be covered by emissions trading. Currently, this is not the case – and although Habeck verbally fully supported the demand on Monday, prompt implementation is unlikely. The key points state extremely vaguely that the Federal Government is advocating for the “examination of prospective pricing of upstream emissions”. Currently, the Federal Ministry for Economic Affairs and Climate Action lacks information on the origin countries for a large part of the imported gas.
However, Habeck’s strategy and his draft legislation draw two red lines: CCS should not be available for coal-fired power plants. Unlike gas, such a rule can be legally justified because the coal phase-out is enshrined in law. Moreover, the new rule explicitly excludes onshore CO2 storage – onshore storage can only be considered if individual federal states request it (“opt-in”). However, during the debate on the CCS Act in 2012, the states had already opposed the use of the technology in their territories.
Environmental organizations have sharply criticized Habeck’s proposals. Greenpeace lamented that Robert Habeck had “fallen for the industrial lobby: the proposed strategy allows a ‘business as usual’ approach by starting a large-scale CO2 final disposal strategy.” The German Environmental Aid also speaks of a “double breach of the dam”: On the one hand, Habeck allows “life-extending measures for fossil gas power plants, on the other hand, he dedicates the North Sea to a fossil disposal park”. Germanwatch, on the other hand, criticized the possibility of equipping gas power plants with CCS, which contradicts the outcome of the participation process, the “consensus that CCS should not and should not be used in the energy sector in Germany”, according to Germanwatch expert Simon Wolff. “The fact that this consensus has obviously been eliminated at the last minute at the instigation of the FDP threatens to destroy the societal acceptance of any form of CCS in Germany,” he criticizes.
Whether the Greens and SPD will approve the agreement remains to be seen. “The position of the Green parliamentary group remains unchanged,” said Green MP Felix Banaczak to Table.Media. “We see no need for the application of CCS in the energy sector and do not want to create a legal possibility for it.” Criticism also comes from the climate policy spokeswoman of the SPD parliamentary group, Nina Scheer. “The separation of CO2 must not compete with the energy transition,” she explained. “Therefore, the SPD parliamentary group excludes CCS in energy generation.”
The government wants to overcome another hurdle internally: The “London Protocol,” which has so far stood in the way of the transport of CO2, is to be ratified. The Ministry of the Environment, which is responsible, also wants to revise the Act on the Prohibition of Dumping of Waste and Other Materials or Objects on the High Seas (Hohe-See-Einbringungsgesetz). Habeck’s concept envisages exempting marine protected areas from CO2 storage. Against Ottmar Edenhofer’s estimate of a storage requirement of around 50 million tons of CO2 per year from 2040 onwards, official calculations show about 2.7 billion tons of storage space in the German North Sea.
However, Habeck’s package is welcomed by the industry. The “Future Gas” association welcomed the strategy as “another building block for effective climate action” and praised the options for new and existing gas power plants and CHP plants. The Federation of German Industries (BDI) also noted that the CMS provides planning security for companies and creates “coherence at the European level”, where a strategy for CCS and an ambitious climate target for 2040 with a reduction of 90 percent in emissions apply.
For the capture and storage of the greenhouse gas CO2 (CCS), there are plans in many countries, but so far, there is no independent business model anywhere. Industrialized countries and the EU do provide subsidies for CCS facilities and sometimes for the transport and storage infrastructure. However, according to industry representatives and analysts, an even longer-term and more comprehensive subsidy is needed to establish this industry. Additionally, the state must absorb risks such as CO2 leaks from storage facilities.
Economy Minister Robert Habeck presented the “key points of the German government for a Carbon Management Strategy” on Monday. Germany must utilize technologies for the capture and storage of CO2 (CCS) as time for effective climate action is running out, said the Economy Minister. The ramp-up of the technology should be promoted for this purpose. Financial support will be provided to “industries with emissions that are difficult or otherwise technically unavoidable“, such as cement, lime, basic chemicals and waste incineration.
The subsidy is necessary because the incentives provided by the European Emissions Trading System are insufficient. While companies that capture and store CO2 no longer need to purchase CO2 certificates for the captured amount, the price of certificates is still lower than the costs of capture and storage.
The German government aims to subsidize CCS facilities through two programs:
The following will not be subsidized:
According to industry and analysts, long-term and comprehensive subsidies are necessary to establish CCS facilities and infrastructure. “Every strategy is only as good as its swift implementation,” said Dominik von Achten at the presentation of the Carbon Management Strategy. The CEO of the cement manufacturer Heidelberg Materials called for the right framework conditions and “national funding instruments”. It is important to consider “the entire value chain“, including “capture, transport and storage” of CO2. The German Cement Works Associatio (VDZ), the economic association of the German cement industry and the Federation of German Industries (BDI) also demand subsidies for CO2 storage and transport.
According to von Achten, Heidelberg Materials receives “85 percent funding” for a CCS project the company operates in Norway. This includes both investment and operating costs, as envisaged in climate action contracts, according to the Heidelberg CEO. While it is not possible to “build a business case based on permanent state funding”, seed funding is necessary.
Currently, for example, the EU supports 28 industry CCS projects with grants totaling 3.3 billion euros from the ETS Innovation Fund. However, the EU Commission sees a financing deficit for the CCS projects announced so far amounting to ten billion euros by 2030. The Commission calls on member states in its recently published EU Industrial Carbon Management Strategy to support investments in CCS storage and capture and transport infrastructure.
However, seed funding could take quite some time. For example, in the USA, there are tax incentives for CCS lasting twelve years under the Inflation Reduction Act (IRA). Companies receive tax exemptions of 85 dollars per ton of captured and stored CO2. However, some industries find this subsidy too short, according to analysts at the consulting firm Deloitte. The industry-oriented Global CCS Institute also calls for longer-term subsidies, as CCS facilities must be operated “economically” for 25 years or longer. However, there is no nationwide CO2 price in the USA, which serves as an additional incentive in the EU.
Like von Achten, the analysts at Deloitte also point out that state subsidies are needed for the entire value chain so that CCS can establish itself as a business model. They have analyzed various subsidy programs in the USA, Canada, Denmark, Norway and the UK. According to them, only the UK has established the necessary framework conditions for an “investment-worthy CCS business model”.
In the UK, both CO2 emitters and transport and storage companies receive state subsidies. Additionally, the government protects companies from “major risks” such as CO2 leaks from storage facilities or the risk of underutilization of CO2 storage.
It remains unclear whether the planned subsidies by the German government from the key points presented on Monday will be sufficient to initiate economically viable CCS business models. Thus, there is a risk that only an incomplete CCS value chain will be established because transport and storage are not subsidized. Companies would then face too high costs. Alternatively, the strategy would need to be supplemented in the future with subsidies for transport and storage. This would require additional state subsidies.
The central role of the rainforest in the Congo Basin for climate action and biodiversity is at risk: Its function as a CO2 sink is dramatically declining according to a study. Even with a halt to deforestation, the second-largest rainforest on the planet could soon emit more CO2 than it absorbs, warn researchers. Although this has been known for years, models in climate science have systematically underestimated this effect. A debate has now begun about correcting these models.
The large forest areas on Earth are crucial for preserving biodiversity and the climate system. Only with an end to deforestation by 2030 can the 1.5-degree limit on global warming be maintained. Research is intensively debating the fate of the Amazon rainforest.
However, the forest in the Congo Basin is now also under threat. Due to climate change with longer droughts, heavier rainfall, and destructive storms, more trees are dying today than before – and soon the regrowing trees may not be able to keep up with the loss. Even without deforestation, rainforests would turn into carbon sources.
This is feared by Wannes Hubau, a professor at Ghent University in Belgium and a scientist at the Royal Museum, who measures data on trees in the Congo Basin. He has already wrapped his measuring tape around about 100,000 trunks of the Central African rainforest. With a few additional pieces of information such as tree species, the biologist can estimate how much carbon the rainforest has sequestered. After a few years, he and his research team return to the same location to take stock. This was also the case in 2017, a year after the “Godzilla El Niño”, as Hubau calls the devastating extreme weather event: “The carbon sink – the potential to absorb CO2 – had dropped to zero for a certain period,” says Hubau about some of the test plots.
In pre-industrial times, this would not have been surprising. What growing trees store in carbon returns to the atmosphere when they die and biomass decomposes. The CO2 balance approaches zero. However, the increased CO2 levels caused by human activity have led to “CO2 fertilization”, as scientists call it: The excess CO2 has accelerated the growth of trees, resulting in more CO2 being sequestered. In the 1990s and early 2000s, tropical rainforests absorbed about 15 percent of anthropogenic CO2 emissions. However, this effect is now diminishing – and could even reverse.
There have long been signs of this for the Amazon rainforest. Together with 94 scientific institutions, co-author Wubau explained in a 2020 publication in Nature why this also applies to the Congo Basin. The basin is home to the world’s second-largest rainforest, spanning six countries in Central Africa, including the Democratic Republic of Congo, which covers almost two-thirds of the area.
So what follows from the findings? So far, nothing, says Hubau – and that’s a problem. Because the diminishing carbon sink is not reflected in the models of leading climate research institutes, which the Intergovernmental Panel on Climate Change (IPCC), the largest authority on climate scenarios, relies on: “To this day, the IPCC models assume that the rainforests will remain carbon sinks for a very long time in the future. That means the models of the World Climate Council are somewhat too optimistic,” says Hubau.
“There is basically nothing to question about Hubau’s data,” says Sönke Zaehle, a professor at the Max Planck Institute for Biogeochemistry in Jena and a co-author of the Sixth Assessment Report of the IPCC. He is well acquainted with the Coupled Model Intercomparison Project (CMIP), a climate model involving several research institutions, including some Max Planck Institutes.
Zaehle sees a few open questions, such as how the results from Hubau’s and his fellow researchers’ measuring areas can be extrapolated to the African rainforest as a whole. But he can well imagine that the finding of declining storage potential will be incorporated into models in the future.
However, how to do this is a challenge: “The models originally did not contain much ecology because their purpose was to predict weather patterns and climate states,” he says. The models were gradually expanded. Drought stress, lightning strikes, wind and fire are referred to by Zaehle as “disturbance dynamics”, the modeling of which is very complex – but not impossible. “This is actually an active research topic,” he says. What is particularly lacking: more data from the tropics, more powerful computers – and more research funding. The more accurate a model, the more expensive it is.
Anja Rammig is a professor at the Technical University of Munich. A trained biologist, she now develops computer models that simulate how climate and changes on the Earth’s surface interact. She also includes the CO2 fertilization effect. The common models have made her suspicious for a long time, she says: “I always had the feeling that the fertilization effect is too strong, that it cannot be true.” The publication in Nature was a confirmation for her.
But she also points out: “Tree mortality is extremely difficult to model.” After a drought, for example, there are visibly fewer trees. “But there are no data, and often you don’t even know exactly what they died from.” Did they dry out, were they infested by pests? Was it the wind that brought them down?
Nevertheless, the common models can be improved by coupling them with simulations of tree mortality. Rammig and her colleagues collect data on this in Brazil: On an area with a diameter of 30 meters, they expose trees to different CO2 concentrations and observe their growth. The goal: The climate models should depict reality in the forests as accurately as possible and provide good data in the IPCC reports on whether the forests are sinks or sources of CO2. Jonas Gerding, Kinshasa
China’s CO2 emissions in the energy sector grew by 5.2 percent in 2023 – an increase that jeopardizes the climate goal of the People’s Republic. This is according to a recent study by the Center for Research on Energy and Clean Air (CREA), based on official data. According to the report, the emissions of the People’s Republic increased by twelve percent between 2020 and 2023 – partly due to a “very energy- and carbon-intensive response to the Covid-19 pandemic”. Coal consumption increased by 4.4 percent last year.
According to CREA analyst Lauri Myllyvirta, this increase in CO2 emissions means that China must be even more ambitious to achieve its climate goals. During the ongoing 14th Five-Year Plan (until 2025), CO2 emissions per unit of economic output are supposed to be reduced by 18 percent. To achieve this, CO2 emissions must fall by four to six percent by 2025. This would be an unprecedented decline.
China is thus at risk of missing all other major climate goals for 2025. For example, the share of non-fossil energy sources in the energy mix only increased by 1.8 percentage points from 2020 to 2023. This makes it difficult to achieve the target of an increase of 4.1 percentage points by 2025.
According to Myllyvirta, this deviation from the reduction path in 2023 marks the first time in a long time that China has veered off course. In previous years, emissions had even decreased at times. And the goals for expanding renewable energy sources were even exceeded.
Beijing finds it difficult to abandon coal due to the growing focus on energy security. They want to shut down fossil capacities only when the new system of renewable energy and energy storage is fully operational. “We want everything to be so competitive that the exit from fossil fuels happens through the market. Not by command and control,” said government advisor Pan Jiahua in an interview with Carbon Brief published last week.
Regarding different energy sources, however, Pan, vice chairman of the National Expert Committee on Climate Change, expressed a clear opinion: “Fossil fuels are fossils. They are a thing of the past.” He considers the tripling of renewables agreed upon at COP28 to be insufficient. “Renewable energy would not require major investments in infrastructure.” Pan described the construction of coal-fired power plants and other fossil infrastructure as “a waste of money”. Nevertheless, according to Reuters, coal-fired power plants with a total capacity of 114 gigawatts (GW) were approved in China in 2023, ten percent more than in 2022. ck
The Mercosur agreement has been pronounced dead and revived several times already. Now, a legal opinion by experts Roda Verheyen and Gerd Winter, commissioned by Greenpeace, points out: Rainforest deforestation for additional agricultural land has been underestimated so far, as well as the greenhouse gases that would result from it and additional shipping and air transport.
The agreement aims to boost trade between EU countries and Brazil, Argentina, Paraguay and Uruguay. According to the new opinion, this would lead to net additional emissions compared to without the free trade agreement – contrary to what the EU Commission assumes. The Commission relies on a sustainability analysis by the London School of Economics in its draft for the free trade agreement. However, the analysis does not take into account emissions from land use and land-use changes (LULUCF), although these account for a large part of Brazil’s and Paraguay’s emissions.
This is unlawful, the opinion criticizes, as a sustainability analysis must include all relevant impacts. Moreover, the analysis does not even assess compliance with EU climate goals. As a result, the draft could violate Article 6 of the EU Climate Law and also Article 2, which obliges the EU to take measures to achieve its emission reduction targets that would not be met with the Mercosur agreement. The draft is also not in line with EU primary law and the Paris Agreement and therefore “legally unacceptable”.
The Mercosur agreement still needs to be unanimously approved by all EU member states in the EU Council. At least France and Austria could veto it. However, the EU could circumvent this by splitting the agreement into economic and political parts. Then, a qualified majority would be sufficient. Greenpeace sees this as an unacceptable attempt to bypass oversight bodies such as national parliaments.
Whether Germany wants to stick to the Mercosur agreement despite the new findings was not answered by the responsible Ministry of Economy by the editorial deadline. Economy Minister Robert Habeck had previously expressed support for the agreement. According to the Federal Ministry for Economic Affairs and Climate Action (BMWK), it has significant overall economic and strategic importance. lb
The debate over a potential resilience bonus has gained priority within the coalition. Now, the deputy leaders of the factions are negotiating whether this subsidy, initially set at 40 million euros and later up to 300 million euros annually, should be implemented. It is intended to support German solar companies such as Solarwatt and Meyer Burger, which are increasingly under pressure from cheap modules from China. The industry association BSW-Solar also demands financial assistance.
Economy Minister Robert Habeck has already clearly expressed his support for the resilience bonus. However, the FDP is putting the brakes on, fearing an increase in electricity prices. Moreover, they are generally skeptical of subsidies. However, even some German solar companies are against subsidies. For example, Enpal and 1Komma5°, which make their money from selling, renting and leasing these cheaper modules. They fear a market slump because customers are waiting for the bonuses. This would make it impossible to achieve the PV expansion targets. If the bonus is implemented, Enpal threatens to relocate to other countries.
Pressure is now coming from Saxony. Solarwatt and Meyer Burger have manufacturing facilities there, and elections are imminent. Saxony’s Prime Minister Michael Kretschmer (CDU) fears the loss of 500 jobs at Meyer Burger’s plant in Freiburg. He is therefore advocating for subsidies. Saxony’s Economy Minister Martin Dulig (SPD) is also pushing for an improvement in the conditions soon.
An outcome could come in the “upcoming session week”, according to the SPD. However, this is only in the second week of March. It is questionable whether the solar manufacturer Meyer Burger can wait that long for a decision on a possible plant closure. lb
CCS is one of the most controversial topics in climate policy: In some industrial processes, the capture and storage of CO2 is essential if we want to achieve climate neutrality. At the same time, it can prolong the life of fossil infrastructure or even promote new construction. The challenge is to enable only the sensible applications.
The simple solution – limiting CCS in the law to industrial sectors where there is no alternative – apparently could not be enforced in the government. Therefore, Minister for Economic Affairs and Climate Action, Robert Habeck, took a different approach: CCS will also be allowed in gas-fired power plants, but there will be no state subsidy for it. As a result, the technology will practically play no role in power plants, the minister assures. Once again, the government refrains from making a clear commitment out of consideration for coalition harmony. Bernhard Pötter and I analyze the political dimension of the agreement, while Nico Beckert takes a closer look at the economic framework conditions for CCS.
In other news today, there are rather sobering reports: Jonas Gerding reports from Kinshasa that the CO2 storage capacity of rainforests has apparently been significantly overestimated. And in China, emissions continued to rise last year, contrary to some hopes.
After extensive preparation, Economy Minister Robert Habeck presented on Monday the key points of the German Government’s Carbon Management Strategy (CMS) and an initial draft law for implementation. However, the debate is likely far from over, as sharp criticism arises not only from environmental organizations but also from the Greens and SPD, contradicting their previous positions. Moreover, it partly contradicts Germany’s stance at COP28.
It is undisputed that Carbon Capture and Storage (CCS) is necessary to achieve climate neutrality for certain industrial applications where emissions cannot be avoided in other ways or only with great difficulty. These include cement and lime production, parts of the basic materials industry, and the incineration of unavoidable waste. Both the Greens and the SPD agreed to the use of CCS in these “hard to abate” sectors after lengthy discussions last year.
This was also Germany’s position before and during the climate conference in Dubai in the international debate on phasing out fossil fuels. Germany advocated that CCS should only be used in the “hard to abate” sectors of the industry and not in the energy sector. Foreign Minister Annalena Baerbock warned in an interview with Table.Media that CCS should not be a substitute for expanding renewables, which should completely replace fossil fuels in the electricity sector.
Before COP28, Germany advocated within the EU to keep CCS out of the energy system as much as possible and achieved a formulation calling for a “gradual transition to an energy sector predominantly free of fossil fuels“. However, the government’s “Climate Foreign Policy Strategy,” led by the Foreign Office, included a CCS-friendly formulation.
However, the current key points and draft legislation go far beyond these positions: Gas power plants should also be able to use CCS and be connected to the planned pipeline network. Habeck considers this unproblematic. “I do not fear that the decarbonization of the energy sector will be jeopardized by this,” he said on Monday. Unlike industrial applications, CCS will not be financially supported in the power plant sector – unlike the use of hydrogen. Therefore, CCS is unlikely to be used in practice for gas power plants, according to the Economy Minister.
Habeck brought prominent support for this thesis to the press conference: Climate economist Ottmar Edenhofer stated that he sees “no risk of a fossil lock-in” through the planned regulation. The decision on whether CCS will be used in gas power plants can be “safely left to the market,” said the director of the Potsdam Institute for Climate Impact Research (PIK).
However, Edenhofer makes an important condition for this: Methane emissions arising from the extraction and transport of natural gas must also be covered by emissions trading. Currently, this is not the case – and although Habeck verbally fully supported the demand on Monday, prompt implementation is unlikely. The key points state extremely vaguely that the Federal Government is advocating for the “examination of prospective pricing of upstream emissions”. Currently, the Federal Ministry for Economic Affairs and Climate Action lacks information on the origin countries for a large part of the imported gas.
However, Habeck’s strategy and his draft legislation draw two red lines: CCS should not be available for coal-fired power plants. Unlike gas, such a rule can be legally justified because the coal phase-out is enshrined in law. Moreover, the new rule explicitly excludes onshore CO2 storage – onshore storage can only be considered if individual federal states request it (“opt-in”). However, during the debate on the CCS Act in 2012, the states had already opposed the use of the technology in their territories.
Environmental organizations have sharply criticized Habeck’s proposals. Greenpeace lamented that Robert Habeck had “fallen for the industrial lobby: the proposed strategy allows a ‘business as usual’ approach by starting a large-scale CO2 final disposal strategy.” The German Environmental Aid also speaks of a “double breach of the dam”: On the one hand, Habeck allows “life-extending measures for fossil gas power plants, on the other hand, he dedicates the North Sea to a fossil disposal park”. Germanwatch, on the other hand, criticized the possibility of equipping gas power plants with CCS, which contradicts the outcome of the participation process, the “consensus that CCS should not and should not be used in the energy sector in Germany”, according to Germanwatch expert Simon Wolff. “The fact that this consensus has obviously been eliminated at the last minute at the instigation of the FDP threatens to destroy the societal acceptance of any form of CCS in Germany,” he criticizes.
Whether the Greens and SPD will approve the agreement remains to be seen. “The position of the Green parliamentary group remains unchanged,” said Green MP Felix Banaczak to Table.Media. “We see no need for the application of CCS in the energy sector and do not want to create a legal possibility for it.” Criticism also comes from the climate policy spokeswoman of the SPD parliamentary group, Nina Scheer. “The separation of CO2 must not compete with the energy transition,” she explained. “Therefore, the SPD parliamentary group excludes CCS in energy generation.”
The government wants to overcome another hurdle internally: The “London Protocol,” which has so far stood in the way of the transport of CO2, is to be ratified. The Ministry of the Environment, which is responsible, also wants to revise the Act on the Prohibition of Dumping of Waste and Other Materials or Objects on the High Seas (Hohe-See-Einbringungsgesetz). Habeck’s concept envisages exempting marine protected areas from CO2 storage. Against Ottmar Edenhofer’s estimate of a storage requirement of around 50 million tons of CO2 per year from 2040 onwards, official calculations show about 2.7 billion tons of storage space in the German North Sea.
However, Habeck’s package is welcomed by the industry. The “Future Gas” association welcomed the strategy as “another building block for effective climate action” and praised the options for new and existing gas power plants and CHP plants. The Federation of German Industries (BDI) also noted that the CMS provides planning security for companies and creates “coherence at the European level”, where a strategy for CCS and an ambitious climate target for 2040 with a reduction of 90 percent in emissions apply.
For the capture and storage of the greenhouse gas CO2 (CCS), there are plans in many countries, but so far, there is no independent business model anywhere. Industrialized countries and the EU do provide subsidies for CCS facilities and sometimes for the transport and storage infrastructure. However, according to industry representatives and analysts, an even longer-term and more comprehensive subsidy is needed to establish this industry. Additionally, the state must absorb risks such as CO2 leaks from storage facilities.
Economy Minister Robert Habeck presented the “key points of the German government for a Carbon Management Strategy” on Monday. Germany must utilize technologies for the capture and storage of CO2 (CCS) as time for effective climate action is running out, said the Economy Minister. The ramp-up of the technology should be promoted for this purpose. Financial support will be provided to “industries with emissions that are difficult or otherwise technically unavoidable“, such as cement, lime, basic chemicals and waste incineration.
The subsidy is necessary because the incentives provided by the European Emissions Trading System are insufficient. While companies that capture and store CO2 no longer need to purchase CO2 certificates for the captured amount, the price of certificates is still lower than the costs of capture and storage.
The German government aims to subsidize CCS facilities through two programs:
The following will not be subsidized:
According to industry and analysts, long-term and comprehensive subsidies are necessary to establish CCS facilities and infrastructure. “Every strategy is only as good as its swift implementation,” said Dominik von Achten at the presentation of the Carbon Management Strategy. The CEO of the cement manufacturer Heidelberg Materials called for the right framework conditions and “national funding instruments”. It is important to consider “the entire value chain“, including “capture, transport and storage” of CO2. The German Cement Works Associatio (VDZ), the economic association of the German cement industry and the Federation of German Industries (BDI) also demand subsidies for CO2 storage and transport.
According to von Achten, Heidelberg Materials receives “85 percent funding” for a CCS project the company operates in Norway. This includes both investment and operating costs, as envisaged in climate action contracts, according to the Heidelberg CEO. While it is not possible to “build a business case based on permanent state funding”, seed funding is necessary.
Currently, for example, the EU supports 28 industry CCS projects with grants totaling 3.3 billion euros from the ETS Innovation Fund. However, the EU Commission sees a financing deficit for the CCS projects announced so far amounting to ten billion euros by 2030. The Commission calls on member states in its recently published EU Industrial Carbon Management Strategy to support investments in CCS storage and capture and transport infrastructure.
However, seed funding could take quite some time. For example, in the USA, there are tax incentives for CCS lasting twelve years under the Inflation Reduction Act (IRA). Companies receive tax exemptions of 85 dollars per ton of captured and stored CO2. However, some industries find this subsidy too short, according to analysts at the consulting firm Deloitte. The industry-oriented Global CCS Institute also calls for longer-term subsidies, as CCS facilities must be operated “economically” for 25 years or longer. However, there is no nationwide CO2 price in the USA, which serves as an additional incentive in the EU.
Like von Achten, the analysts at Deloitte also point out that state subsidies are needed for the entire value chain so that CCS can establish itself as a business model. They have analyzed various subsidy programs in the USA, Canada, Denmark, Norway and the UK. According to them, only the UK has established the necessary framework conditions for an “investment-worthy CCS business model”.
In the UK, both CO2 emitters and transport and storage companies receive state subsidies. Additionally, the government protects companies from “major risks” such as CO2 leaks from storage facilities or the risk of underutilization of CO2 storage.
It remains unclear whether the planned subsidies by the German government from the key points presented on Monday will be sufficient to initiate economically viable CCS business models. Thus, there is a risk that only an incomplete CCS value chain will be established because transport and storage are not subsidized. Companies would then face too high costs. Alternatively, the strategy would need to be supplemented in the future with subsidies for transport and storage. This would require additional state subsidies.
The central role of the rainforest in the Congo Basin for climate action and biodiversity is at risk: Its function as a CO2 sink is dramatically declining according to a study. Even with a halt to deforestation, the second-largest rainforest on the planet could soon emit more CO2 than it absorbs, warn researchers. Although this has been known for years, models in climate science have systematically underestimated this effect. A debate has now begun about correcting these models.
The large forest areas on Earth are crucial for preserving biodiversity and the climate system. Only with an end to deforestation by 2030 can the 1.5-degree limit on global warming be maintained. Research is intensively debating the fate of the Amazon rainforest.
However, the forest in the Congo Basin is now also under threat. Due to climate change with longer droughts, heavier rainfall, and destructive storms, more trees are dying today than before – and soon the regrowing trees may not be able to keep up with the loss. Even without deforestation, rainforests would turn into carbon sources.
This is feared by Wannes Hubau, a professor at Ghent University in Belgium and a scientist at the Royal Museum, who measures data on trees in the Congo Basin. He has already wrapped his measuring tape around about 100,000 trunks of the Central African rainforest. With a few additional pieces of information such as tree species, the biologist can estimate how much carbon the rainforest has sequestered. After a few years, he and his research team return to the same location to take stock. This was also the case in 2017, a year after the “Godzilla El Niño”, as Hubau calls the devastating extreme weather event: “The carbon sink – the potential to absorb CO2 – had dropped to zero for a certain period,” says Hubau about some of the test plots.
In pre-industrial times, this would not have been surprising. What growing trees store in carbon returns to the atmosphere when they die and biomass decomposes. The CO2 balance approaches zero. However, the increased CO2 levels caused by human activity have led to “CO2 fertilization”, as scientists call it: The excess CO2 has accelerated the growth of trees, resulting in more CO2 being sequestered. In the 1990s and early 2000s, tropical rainforests absorbed about 15 percent of anthropogenic CO2 emissions. However, this effect is now diminishing – and could even reverse.
There have long been signs of this for the Amazon rainforest. Together with 94 scientific institutions, co-author Wubau explained in a 2020 publication in Nature why this also applies to the Congo Basin. The basin is home to the world’s second-largest rainforest, spanning six countries in Central Africa, including the Democratic Republic of Congo, which covers almost two-thirds of the area.
So what follows from the findings? So far, nothing, says Hubau – and that’s a problem. Because the diminishing carbon sink is not reflected in the models of leading climate research institutes, which the Intergovernmental Panel on Climate Change (IPCC), the largest authority on climate scenarios, relies on: “To this day, the IPCC models assume that the rainforests will remain carbon sinks for a very long time in the future. That means the models of the World Climate Council are somewhat too optimistic,” says Hubau.
“There is basically nothing to question about Hubau’s data,” says Sönke Zaehle, a professor at the Max Planck Institute for Biogeochemistry in Jena and a co-author of the Sixth Assessment Report of the IPCC. He is well acquainted with the Coupled Model Intercomparison Project (CMIP), a climate model involving several research institutions, including some Max Planck Institutes.
Zaehle sees a few open questions, such as how the results from Hubau’s and his fellow researchers’ measuring areas can be extrapolated to the African rainforest as a whole. But he can well imagine that the finding of declining storage potential will be incorporated into models in the future.
However, how to do this is a challenge: “The models originally did not contain much ecology because their purpose was to predict weather patterns and climate states,” he says. The models were gradually expanded. Drought stress, lightning strikes, wind and fire are referred to by Zaehle as “disturbance dynamics”, the modeling of which is very complex – but not impossible. “This is actually an active research topic,” he says. What is particularly lacking: more data from the tropics, more powerful computers – and more research funding. The more accurate a model, the more expensive it is.
Anja Rammig is a professor at the Technical University of Munich. A trained biologist, she now develops computer models that simulate how climate and changes on the Earth’s surface interact. She also includes the CO2 fertilization effect. The common models have made her suspicious for a long time, she says: “I always had the feeling that the fertilization effect is too strong, that it cannot be true.” The publication in Nature was a confirmation for her.
But she also points out: “Tree mortality is extremely difficult to model.” After a drought, for example, there are visibly fewer trees. “But there are no data, and often you don’t even know exactly what they died from.” Did they dry out, were they infested by pests? Was it the wind that brought them down?
Nevertheless, the common models can be improved by coupling them with simulations of tree mortality. Rammig and her colleagues collect data on this in Brazil: On an area with a diameter of 30 meters, they expose trees to different CO2 concentrations and observe their growth. The goal: The climate models should depict reality in the forests as accurately as possible and provide good data in the IPCC reports on whether the forests are sinks or sources of CO2. Jonas Gerding, Kinshasa
China’s CO2 emissions in the energy sector grew by 5.2 percent in 2023 – an increase that jeopardizes the climate goal of the People’s Republic. This is according to a recent study by the Center for Research on Energy and Clean Air (CREA), based on official data. According to the report, the emissions of the People’s Republic increased by twelve percent between 2020 and 2023 – partly due to a “very energy- and carbon-intensive response to the Covid-19 pandemic”. Coal consumption increased by 4.4 percent last year.
According to CREA analyst Lauri Myllyvirta, this increase in CO2 emissions means that China must be even more ambitious to achieve its climate goals. During the ongoing 14th Five-Year Plan (until 2025), CO2 emissions per unit of economic output are supposed to be reduced by 18 percent. To achieve this, CO2 emissions must fall by four to six percent by 2025. This would be an unprecedented decline.
China is thus at risk of missing all other major climate goals for 2025. For example, the share of non-fossil energy sources in the energy mix only increased by 1.8 percentage points from 2020 to 2023. This makes it difficult to achieve the target of an increase of 4.1 percentage points by 2025.
According to Myllyvirta, this deviation from the reduction path in 2023 marks the first time in a long time that China has veered off course. In previous years, emissions had even decreased at times. And the goals for expanding renewable energy sources were even exceeded.
Beijing finds it difficult to abandon coal due to the growing focus on energy security. They want to shut down fossil capacities only when the new system of renewable energy and energy storage is fully operational. “We want everything to be so competitive that the exit from fossil fuels happens through the market. Not by command and control,” said government advisor Pan Jiahua in an interview with Carbon Brief published last week.
Regarding different energy sources, however, Pan, vice chairman of the National Expert Committee on Climate Change, expressed a clear opinion: “Fossil fuels are fossils. They are a thing of the past.” He considers the tripling of renewables agreed upon at COP28 to be insufficient. “Renewable energy would not require major investments in infrastructure.” Pan described the construction of coal-fired power plants and other fossil infrastructure as “a waste of money”. Nevertheless, according to Reuters, coal-fired power plants with a total capacity of 114 gigawatts (GW) were approved in China in 2023, ten percent more than in 2022. ck
The Mercosur agreement has been pronounced dead and revived several times already. Now, a legal opinion by experts Roda Verheyen and Gerd Winter, commissioned by Greenpeace, points out: Rainforest deforestation for additional agricultural land has been underestimated so far, as well as the greenhouse gases that would result from it and additional shipping and air transport.
The agreement aims to boost trade between EU countries and Brazil, Argentina, Paraguay and Uruguay. According to the new opinion, this would lead to net additional emissions compared to without the free trade agreement – contrary to what the EU Commission assumes. The Commission relies on a sustainability analysis by the London School of Economics in its draft for the free trade agreement. However, the analysis does not take into account emissions from land use and land-use changes (LULUCF), although these account for a large part of Brazil’s and Paraguay’s emissions.
This is unlawful, the opinion criticizes, as a sustainability analysis must include all relevant impacts. Moreover, the analysis does not even assess compliance with EU climate goals. As a result, the draft could violate Article 6 of the EU Climate Law and also Article 2, which obliges the EU to take measures to achieve its emission reduction targets that would not be met with the Mercosur agreement. The draft is also not in line with EU primary law and the Paris Agreement and therefore “legally unacceptable”.
The Mercosur agreement still needs to be unanimously approved by all EU member states in the EU Council. At least France and Austria could veto it. However, the EU could circumvent this by splitting the agreement into economic and political parts. Then, a qualified majority would be sufficient. Greenpeace sees this as an unacceptable attempt to bypass oversight bodies such as national parliaments.
Whether Germany wants to stick to the Mercosur agreement despite the new findings was not answered by the responsible Ministry of Economy by the editorial deadline. Economy Minister Robert Habeck had previously expressed support for the agreement. According to the Federal Ministry for Economic Affairs and Climate Action (BMWK), it has significant overall economic and strategic importance. lb
The debate over a potential resilience bonus has gained priority within the coalition. Now, the deputy leaders of the factions are negotiating whether this subsidy, initially set at 40 million euros and later up to 300 million euros annually, should be implemented. It is intended to support German solar companies such as Solarwatt and Meyer Burger, which are increasingly under pressure from cheap modules from China. The industry association BSW-Solar also demands financial assistance.
Economy Minister Robert Habeck has already clearly expressed his support for the resilience bonus. However, the FDP is putting the brakes on, fearing an increase in electricity prices. Moreover, they are generally skeptical of subsidies. However, even some German solar companies are against subsidies. For example, Enpal and 1Komma5°, which make their money from selling, renting and leasing these cheaper modules. They fear a market slump because customers are waiting for the bonuses. This would make it impossible to achieve the PV expansion targets. If the bonus is implemented, Enpal threatens to relocate to other countries.
Pressure is now coming from Saxony. Solarwatt and Meyer Burger have manufacturing facilities there, and elections are imminent. Saxony’s Prime Minister Michael Kretschmer (CDU) fears the loss of 500 jobs at Meyer Burger’s plant in Freiburg. He is therefore advocating for subsidies. Saxony’s Economy Minister Martin Dulig (SPD) is also pushing for an improvement in the conditions soon.
An outcome could come in the “upcoming session week”, according to the SPD. However, this is only in the second week of March. It is questionable whether the solar manufacturer Meyer Burger can wait that long for a decision on a possible plant closure. lb