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The goal of this paper is to analyse the societal preparedness for CCUS in selected European countries. Societal prepardness is understood as a combined analysis of political and societal perspectives. The countries of analysis include the Netherlands and UK as two frontrunners. Furthermore, Poland, a country currently highly dependent on coal, Germany, Spain and France as highly industrialised countries are included. Overall these six countries are among the highest emitters in Europe. The analysis assembles ongoing activities, the overarching political framework and climate goals; specific regulation and goals for CCUS and existing fundings instruments; the state of knowledge about the public acceptance in these countries. None of the countries seems to be on a straightforward path towards CCUS and especially questions around social acceptance are open in most countries. Most advanced in is probably the UK which combines a favourable regulatory framework with relevant past and recent experiences including high expertise from the oil and gas industry with comparatively favourable perception. The Netherlands have also far developed. In France and Spain some relevant experience are available and regulation has progressed to a certain level, however, the role of CCUS for decarbonisation is not clearly defined in the two countries. Germany and Poland are least developed towards realising CCUS and both miss important enabling regulatory frameworks as well as funding schemes. At the same time, CCUS is vaguley part of political strategies. With regard to social acceptance both countries face challenges.

The emission footprint of blue hydrogen production varies in literature, resulting in opposing recommendations on its eligibility in a carbon-neutral energy system. Next to fugitive methane emissions and global warming potential, the assumptions regarding carbon capture (CC) can significantly influence results. This analysis reviews these assumptions of several recently published blue hydrogen studies and compares them to experiences with CC in practice. It is found that the impact of various CC modelling parameters on emission footprints requires using real-world data in emission accounting. It is necessary to establish a concise emission accounting methodology for CC to increase transparency for stakeholders on blue hydrogen emissions.

The aim of this paper is to share our approach for a societal engagement and participation process that is implemented as part of two sequential research projects on CCUS. The two projects are both funded under the European Union’s (EU) Horizon 2020 research program. The first one, STRATEGY CCUS (2019-2022), develops strategic development plans for eight regions in South-East Europe; the second, Pilot STRATEGY (2021-2026), partly builds on the first project; Pilot STRATEGY aims at enabling three of the eight regions to start developing their storage resources concretely and to support two further regions in continuing to explore CCUS as an option. Both projects were designed in a way that they integrate geological, technical and economic research with social sciences, with a focus on the regional level. The paper provides an overview on the concept, objectives and the methodologies for the engagement process. It further includes reflections identifying room for improvement and provides recommendations for other projects. Overall, we find that the situation is characterized by low levels of awareness regarding CCUS, but some openness to discuss it. Specific expectations vary and the societal view is not always in line with the current scientific knowledge and the technological development. Important recommendations include building strong interdisciplinary teams that also implement processes for self-reflection.

Currently, the European Commission intends to increase the EU’s 2030 climate target. Instead of a 40 percent target, greenhouse gas emissions would be reduced by 50 to 55 percent compared to 1990 levels; the European Parliament is even considering a 65-percent reduction. The European Emissions Trading System (EU ETS) sectors should make an appropriate contribution to this reduction. However, decisive for limiting global warming to 1.5 degrees Celsius, as in accordance with the Paris Agreement, is compliance with a consistent emissions budget, the total amount of cumulative greenhouse gas emissions. For the EU ETS, compliance with an emissions budget requires adjusting the emission cap. This Weekly Report derives the minimum requirement for emission reductions in the EU ETS sectors in line with a globally cost-effective emissions budget. The results show the cap must be urgently adjusted to ensure the minimum European contribution to limiting global warming to 1.5 degrees Celsius. Otherwise, beginning in 2030, drastic measures will be necessary to reduce emissions. At the same time, national coal phase-out plans and a more ambitious European energy policy make it possible to approximate the cost-effective pathway by adjusting the cap, without additional reduction requirements for the EU ETS sectors., DIW Weekly Report

Aktuell wird eine Anhebung des europäischen Klimaschutzziels für das Jahr 2030 diskutiert. Anstatt um 40 Prozent sollen die Treibhausgas-Emissionen bis 2030 laut Vorschlag der EU-Kommission um 50 bis 55 Prozent im Vergleich zu 1990 sinken. Im Europäischen Parlament wird sogar eine Minderung um 65 Prozent diskutiert. Dazu sollen auch die vom europäischen Emissionshandel (EU-ETS) erfassten Sektoren angemessen beitragen. Entscheidend für die Begrenzung der Erderwärmung auf 1,5 Grad Celsius – im Einklang mit dem Pariser Klimaabkommen – ist jedoch die Einhaltung eines damit konsistenten Emissionsbudgets, also der Gesamtmenge kumulierter Treibhausgasemissionen. Im EU-ETS wird die Einhaltung eines Emissionsbudgets über Anpassungen der Emissionsobergrenze – des Caps – vorgenommen. Dieser Wochenbericht leitet aus einem global kosteneffizienten Emissionsbudget die Mindestanforderung für Emissionssenkungen in den EU-ETS-Sektoren her. Es wird gezeigt, dass eine zeitnahe Anpassung des Caps dringend erforderlich ist, um den europäischen Mindestbeitrag zur Begrenzung der Erderwärmung auf 1,5 Grad zu sichern. Ansonsten wäre eine drastische Senkung der Emissionen nach 2030 erforderlich. Gleichzeitig bieten die gestiegenen Ambitionen in der europäischen Energiepolitik sowie nationale Kohleausstiegspläne das Potenzial, durch eine entsprechende Cap-Anpassung dem kosteneffizienten Pfad ohne zusätzliche Minderungslasten für die EU-ETS-Sektoren nahezukommen., DIW Wochenbericht

Fear of lowering firms' competitiveness and carbon leakage is the reason for large amounts of allowances in the European Union's Emissions Trading System (EU ETS) still being allocated for free. At the same time, unadjusted free allocation of allowances in times of economic recession is partly responsible for the large surplus of allowances that has cumulated in the EU ETS and that is lowering prices in the market. For Phase IV, the introduction of dynamic allocation has been proposed to react to significant changes in production, to prevent the accumulation of further surplus on the one hand and to protect installations from severe under allocation on the other. A reserve of about 400 million allowances is planned for that purpose. This paper analyses the demand for certificates from this reserve under different assumptions on production development as well as different design options for Phase IV. The analysis builds on freely available allocation data from Phase III along with projections of production trends from different time periods in the past. In most of the scenarios, the 400 million allowances are sufficient to fulfil demand for allowances from dynamic allocation until at least the second half of Phase IV (often even for the whole of Phase IV). Even though certain aspects analysed are now not fully compatible with the agreed-upon Phase IV revision, the analysis indicates that the amount of allowances foreseen for dynamic allocation is sufficient for Phase IV. In particular the threshold value of 10% that was introduced in the legislation will ensure that the demand of allowances is likely well below the demand found in the different scenarios in this analysis that neglects this threshold value.

Die deutsche Energiepolitik im Bereich der rationellen Energieverwendung ist eingebettet in die Energiewende und wurde in diesem Jahr vor allem durch die Verabschiedung des nationalen Aktionsplans Energieeffizienz bestimmt. Mit der Veröffentlichung dieses nationalen Aktionsplans liegt eine Positionierung der Bundesregierung zur zweiten Säule der Energiewende vor. Ein zentrales Werkzeug zur Verbesserung der rationellen Verwendung von Energie in der Bundesrepublik stellt die geplante und geförderte Einrichtung von Energieeffizienz-Netzwerken dar. Auf europäischer Ebene wurden die energie- und klimapolitische Ziele für das Jahr 2030 verabschiedet. Als eigenständiges Ziel für Energieeffizienz ist dabei eine Verbesserung des Primärenergieverbrauchs um 27 % gegenüber einer Referenzentwicklung vorgesehen. Die politischen Aktivitäten und die Anerkennung der Bedeutung rationeller Energieverwendung für ein zukünftiges Energiesystem nehmen damit insgesamt zu, bleiben aber in der Umsetzung und Maßnahmenwahl weiterhin hinter den erneuerbaren Energien zurück.

This paper explores how the technological development of key, low-carbon power technologies (photovoltaic, wind and carbon capture and storage) influences the stability of global climate cooperation under different assumptions about climate-related damages. The methodology combines cooperative game theory with a global computable general equilibrium model. Global cooperation is found to be stable only under mean or pessimistic assumptions about the development of key low-carbon power technologies and when damages are high. If the technological development is optimistic or climate damages are lower, the gains from global cooperation are not sufficient to compensate for mitigation costs, because a non-global coalition of willing countries can then achieve emission reductions close to the global optimum.

There are many choices within the design of an emissions trading system. In this paper we focus on one specific aspect – the point of regulation for the energy sector. This choice affects transaction costs; comprehensiveness, and hence the amount of emissions covered and the extent to which the potential cost-effectiveness gains are realised; and credibility of the system. We discuss how an “upstream” energy sector emissions trading system works and present arguments for going upstream (in particular, simplicity of administration) while also discussing arguments for other points of regulation in light of the Chinese circumstances. We present experiences with the New Zealand system, the only system that is entirely upstream for energy, showing ways to address issues that may arise with an upstream system. Ultimately the success of emissions trading depends on markets that operate in a relatively free and competitive way. Simply copying others’ systems to the context of a largely controlled economy such as the Chinese one is likely to be ineffective; each system must be uniquely tailored to local circumstances, possibly in China more than ever before. JEL codes

This paper explores the contribution that no-lose target schemes for non-Annex I (NAI) countries can make to achieving the 2 °C target. The analyses rely on marginal abatement cost curves obtained from a global partial equilibrium model for the year 2020 and specifically account for 18 NAI countries' incentives to participate in no-lose target schemes. Findings suggest that implementing uniform no-lose targets as part of the burden-sharing discussed in the IPCC report (Metz et al., 2007) will not lead to global emission levels compatible with the 2 °C target, because uniform no-lose targets are only beneficial to a few NAI countries. Employing more lenient uniform no-lose targets or individualizing no-lose targets for large emitters could increase participation by NAI countries and decrease global emissions, global compliance costs, rents by NAI countries, and compliance costs for Annex I (AI) countries, but the resulting global emission levels would also not be consistent with the 2 °C target. Achieving the 2 °C target requires more stringent emission targets for AI countries and more lenient no-lose targets for NAI countries. In this case, no-lose targets account for 20% to 47% of global emission reductions, while due to emissions trading around 2/3 of global emission reductions are realized in NAI countries. An effective solution may entail no-lose targets for five to seven large NAI countries, only.

No-lose targets set emission reduction targets and define incentives for meeting the target, in contrast to binding reduction targets that use penalties to ensure compliance. In this thesis, two theoretical frameworks are introduced to analyse the potential of no-lose targets to contribute to global emission reduction efforts. In order to complement the highly stylized theoretical frameworks, a quantitative analysis applying marginal abatement cost curves is conducted.

The European emissions trading scheme (EU-ETS) for CO2 is the largest existing emissions trading scheme in the world. The main reason for the implementation of this scheme is to reach the European Kyoto targets at minimal cost and to establish a price for emissions. The right to emit CO2 therefore becomes a scarce production input. In this paper we want to analyze the determinants of the price for allowances in the EU-ETS and study whether it reacts to fundamental influence factors such as energy prices. The results show, that as long as the market viewed the allowances as a scarce input factor, the price reacts to changes in energy prices and weather variations.