EU countries are being urged to think carefully before backing carbon capture and storage (CCS) for gas-fired power, as new analysis points to significant financial and technical risks. According to the Institute for Energy Economics and Financial Analysis (IEEFA), the UK’s heavy public support for a flagship CCS power project illustrates the scale of commitment required and the uncertainty surrounding returns.
The UK government has allocated £23 billion ($31 billion) in support for the Net Zero Teesside project, which aims to combine gas-fired generation with carbon capture technology.
Much of this cost is expected to be borne by electricity consumers. Despite the scale of investment, the facility is projected to contribute only a small fraction of the country’s long-term carbon capture targets, raising questions about cost-effectiveness.
Persistent barriers to scaling CCS in power
While the European Commission’s Industrial Carbon Management Strategy has prioritized CCS for hard-to-abate sectors, it does not explicitly rule out its use in power generation. This leaves room for Member States to explore CCS for gas plants – a move analysts caution could come with considerable downsides.
IEEFA highlights several structural challenges. Europe currently lacks operational examples of CCS integrated with gas-fired power, leaving the technology without a proven track record in this application. At the same time, high capital and operational costs mean projects are unlikely to proceed without sustained subsidies.
Performance concerns also remain. Existing carbon capture facilities have struggled to consistently meet expected capture rates, suggesting further technical refinement and additional expense may be required.
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Development timelines present another hurdle, with projects often taking more than a decade to move from planning to operation due to permitting complexities and infrastructure needs.
Infrastructure gaps add further uncertainty. A continent-wide CO2 transport network has yet to materialise, and questions remain around the long-term viability and safety of storage sites, particularly offshore.
Alternative decarbonization pathways are also under scrutiny. While hydrogen is sometimes proposed as a substitute fuel for gas plants, it currently comes with significantly higher generation costs and depends on technologies that are not yet mature at scale.
Against this backdrop, analysts argue that reducing reliance on gas-fired generation altogether is likely to offer a more reliable and cost-effective route to emissions reduction.
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