The European Commission has given its approval to a €3 billion Swedish state aid scheme aimed at supporting the roll-out of biogenic carbon dioxide capture and storage (CCS), in a move that will help the country and the EU meet their climate targets.
The scheme, which will run until 2028, will support projects that remove biogenic CO2 emissions through permanent CCS. This will enable CCS as a viable and effective tool to mitigate climate change, increase investor confidence in CCS-technology, reduce costs for its future applications and facilitate the development of a CCS value chain in the EU.
The aid will be awarded through a competitive bidding process, with the first auction expected in 2024. Companies that carry out an activity in Sweden, emitting biogenic CO2, and implementing projects with a capacity to capture and store at least 50,000 tonnes of biogenic CO2 per year will be eligible to participate.
Beneficiaries will receive a grant per tonne of biogenic CO2 that is permanently stored, with the aid received being adjusted to take into account other possible revenues and public support.
The Commission assessed the scheme under EU State aid rules and found that it is necessary and appropriate to incentivise investments in biogenic CCS projects, has an “incentive effect”, and will have a limited impact on competition and trade within the EU.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This €3 billion scheme will enable Sweden to capture and to permanently store a significant amount of carbon dioxide generated by biomass combustion or processing. It will help Sweden and the EU to achieve their ambitious target of climate neutrality by 2050, while ensuring that competition distortions are kept to the minimum.”