The key principles and draft legislation mark a new direction in German policy. They are the outcome of intensive preparatory work, including a detailed dialogue process last year with environmental associations, the business community and academia, and initial discussions within the government. The key principles and the draft legislation have been submitted by the Ministry for coordination within the government. Once this process is complete, the Länder and the associations will be consulted, and then the cabinet will discuss the dossier.

Federal Minister Habeck said: “We are taking a pragmatic and responsible decision about our future policies today. It is to be possible to use CCS and CCU in Germany. If we don’t, there is no way we can reach our climate targets. The technology is also important for the competitiveness of German industry. Not using the technology would put us at a competitive disadvantage and be an expensive mistake.

“We will permit offshore storage; but we will exclude marine protected areas. This policy will bring us in line with our European neighbours like Norway and many other countries. It means we are facing up to our responsibility rather than shifting it to others.

“There is no doubt in my mind that CCS technology is a necessary addition to the climate policy toolbox. The heart of our work is always focused on stopping emissions from arising in the first place. We are therefore pushing extremely hard and successfully to expand the use of renewable energy. We are pressing ahead with the establishment of a hydrogen economy, the gradual phase-out of fossil fuel, higher energy efficiency and a circular economy. All of this helps mitigate climate change. But Germany aims to be climate-neutral by 2045. That is highly ambitious. And there are industrial emissions which are very difficult or impossible to abate. This particularly involves the production of cement and lime, and thermal waste treatment. Here, we need to capture and store the residual CO2. Only by doing this will we be able to keep these branches of industry in Germany and attain our climate targets for industry.

“We can now look back on many years of research, testing and use of CCS technology. Based on this wealth of experience, we can say today that this technology is safe. The risks – like those in mining or the chemicals industry – are manageable. Germany is not the only country opting for CCS. On the contrary: many industrialised countries are already striding ahead with the development of the technology. Germany is acting in line with countries in Europe and around the world. This decision will also enable German firms to gather expertise and thus to safeguard future value creation using CCS/CCU technology.”

The Minister added: “If we are to establish a lasting balance in the atmosphere, we will also need negative emissions. An important possibility is the strengthening of natural carbon sinks like soils and wetlands. But no matter how much progress we make on that, it won’t be enough. We also need to use technology and build “technical sinks”. We will need CCS infrastructure as part of this. My ministry is therefore also working very hard on a strategy for negative emissions. It will be a sort of sister strategy to the Carbon Management Strategy.”

The project

In its latest report the IPCC has made it clear that, alongside other reduction measures, CCS/CCU is also a necessary climate technology in hard-to-abate emission-intensive sectors in order to avoid the 1.5 degree temperature rise from being exceeded. In Europe, Denmark, Norway, the Netherlands, Iceland, Italy, France, Croatia, Poland, Romania and the United Kingdom are therefore already operating or planning to operate geological storage capacities. The United States is promoting the use of CCS/CCU technologies via the Inflation Reduction Act. The European Commission is also driving the pan-European use of the technology, e.g. via the Net-Zero Industry Act. Also, 6 February 2024 saw the publication of a Communication from the Commission containing an Industrial Carbon Management Strategy.

The key principles presented today highlight important policy orientations which will be fleshed out and quantified in the Carbon Management Strategy. These key principles also form the basis for changes to the law on CCS/CCU in Germany. To this end, the BMWK has presented a draft revision of the Carbon Storage Act with the aim in particular of providing clear rules for the establishment of CO2 pipeline infrastructure. The draft will also permit offshore storage, i.e. in the German exclusive economic zone (EEZ) and on the continental shelf, with strict restrictions and the exclusion of the injection of CO2 in marine protected areas. Onshore storage will still not be permitted.

The key principles for the Carbon Management Strategy and the draft legislation amending the Carbon Storage Act were drawn up on the basis of the evaluation report on the Act published at the end of 2022. Representatives of civil society, academia and business were involved in the broad-based stakeholder dialogue from March to August 2023. This discussed all the relevant questions about sources, transport, use and storage of CO2 in Germany prior to initial coordination within the government.

Main points

The main points of the key principles for the Carbon Management Strategy and the draft revision of the Carbon Storage Act:

  • Since emissions in certain fields are difficult or impossible to abate, the current barriers blocking the use of CCS/CCU in Germany will be removed. These emissions are primarily caused by processes which can neither be fully avoided, nor directly switched to electricity from renewable sources or to hydrogen.
  • In order to avoid GHG emissions from electricity generation that damage the climate, the Federal Government is banking on the accelerated expansion of renewable energy and on the capacity mechanism described in the Power Plant Strategy and, in advance of that, the new-build of gas-fired power stations which will be switched to hydrogen. For power generation facilities using gaseous fuels or biomass, the application of CCS/CCU will also be made possible with a view to a technology-neutral transition to a climate-neutral electricity system, but at least in the case of fossil fuels will not be given public funding. The coal phase-out will take place; for emissions from the coal-fired generation of electricity, access to CO2 pipelines will not be enabled.
  • Public funding for CCS/CCU will be focused on hard- or impossible-to-abate emissions.
  • The ramp-up of CCS/CCU must be in harmony with the greenhouse gas reduction targets set by the Federal Climate Change Act and the attainment of climate neutrality in 2045. As laid down in the coalition agreement, the Federal Government will, in dialogue with companies, seek solutions as to how operating licences can be issued for fossil fuel energy infrastructure (power plants or gas pipelines) in a way which ensures, with legal certainty, that they can only continue to operate beyond 2045 using non-fossil fuels, without this triggering a halt to investment, stranded investments and compensation claims.
  • In order to be able to make a start on the construction of privately run CO2 pipelines within a state regulatory framework, the Carbon Storage Act will be updated in line with the Federal Government’s proposals in the evaluation report from the end of 2022. Unclear areas of law relating to the application of the Act will be remedied. Specifically, the draft sets up a uniform approval system for CO2 pipelines.
  • The Federal Government will ratify the amendment to the London Protocol to make CO2 exports possible for the purpose of offshore storage, and will make the necessary amendments to the High Seas Dumping Act.
  • Legislation will be passed to permit the investigation of offshore storage sites in Germany’s exclusive economic zone (EEZ) and on its continental shelf. If a site is demonstrably suitable, taking safety standards and ecological criteria into account and excluding over-exploitation of the sea, corresponding storage facilities can be developed for industrial use. Injection of CO2 in marine protected areas will not be permitted.
  • Also, the permanent storage of CO2 in the geological underground on German (onshore) territory will still not be permitted.

Source – BMWK