(Dis)incentives for Entrepreneurs to Invest in Carbon Capture and Storage Under EU Regulation

Marcus R. C. Groot and Edwin Woerdman ()
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Marcus R. C. Groot: University of Groningen
Edwin Woerdman: University of Groningen

A chapter in Energy Entrepreneurship, Sustainability, Innovation and Financing, 2025, pp 245-262 from Springer

Abstract: Abstract Carbon Capture and Storage (CCS) is on the rise. The International Energy Agency (IEA) calculated that CCS is expected to capture up to 220 Mt of CO2 per year by 2030. Nevertheless, by 2050 around 7600 Mt of CO2 per year needs to be captured and stored for the world to reach net zero carbon emissions. Private investment in CCS therefore needs to increase sharply, but various regulatory barriers stand in the way. In the EU, legal issues for entrepreneurs appear to be most present in the assessment of leakage risks, the significant period of time before responsibility can be transferred to the state, and the possibility for different legal regimes to develop across Member States. Additionally, there may be a gap between the cost of CCS and the price of emission allowances. This financial gap could be solved by further strengthening the EU Emissions Trading System (ETS) and by providing some additional subsidies to CCS projects. The chapter also suggests amendments to the procedures for assessing leakage risks as well as to the procedure for transfer of responsibility, while harmonised models for leakage risk calculations could help to further increase private sector interest in CCS development.

Keywords: Carbon capture and storage; EU law; Regulatory barriers; Investment incentives; Legal reform options (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-80001-6_12

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DOI: 10.1007/978-3-031-80001-6_12

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