Defossilizing Industry Scaling-up CCU 2025

Some innovators are taking steps to avoid this, for example by prioritizing CO2 sources that do not require the surrender of allowances. Nevertheless, the EU ETS could be an enabler of CCU if it provided a commercial incentive for products with a wider range of storage durations. Content mandates, similar to the mechanisms introduced for SAF, could also help support investment in e-chemicals pathways. Stakeholders have put forward proposals to classify utilization products according to their carbon storage duration or potential to displace fossil carbon, such as the Global CO2 Initiative’s Track 1 and Track 2 definitions (see Box 1). While product classifications would need to be accompanied by robust LCA, differentiated carbon pricing could incentivize utilization products that, despite falling short of permanent sequestration, could still deliver emissions reductions. For example, nuanced classifications that recognize the different emissions mitigation potential of different end products could complement considerations linked to feedstock source. This should be based on internationally recognized and standardized LCAs for CCU.54,55,56,57 The EU ETS could be an enabler of CCU if it provided a commercial incentive for products with a wider range of storage durations. Track 1 and Track 2 utilization product definitions could help to target policy incentives BOX 1: The Global CO2 Initiative has developed definitions of Track 1 and Track 2 CCU products which are differentiated by storage duration. The classification is intended to provide clarity for policy-makers and financiers when assessing support for CCU developments. Track 1 CCU products: these are defined as removing CO2 for at least 100 years, if not permanently. In practice, Track 1 products are broadly equivalent to storing CO2 underground (CCS), for example: CO2-treated construction materials (e.g. aggregates, pre-cast concrete). Track 1 products currently receive the most support globally, given the ease of integration into existing subsidy and carbon pricing regimes. Track 2 CCU products: these release CO2 back into the atmosphere within fewer than 100 years, through use or decomposition (e.g. fuels and chemicals with storage duration measured in months to decades). While the climate benefits of such products are limited compared to long-term sequestration, Track 2 products can displace virgin fossil carbon in circulation or be carbon neutral, depending on the emissions source. Source: Global CO2 Initiative.58 Moreover, in the near- to mid-term, it will generally be cheaper to capture concentrated CO2 rather than dilute atmospheric sources. Until 2040, CO2 volumes from industrial point sources are expected to be significantly more abundant than combined atmospheric and biogenic sources (see Figure 8). Point source capture could theoretically enable capture at lower cost and help unlock investment at scale, assuming long-term price signals are applied. However, beyond capture cost, the final cost of CO2 as a feedstock will depend on the balance of policy costs, incentives and its value to the provider. Defossilizing Industry: Considerations for Scaling-up Carbon Capture and Utilization Pathways 17