Carbon credits from CCUS in Europe: Insights from three CO2 routes

Carbon management projects, including Carbon Capture, Transport and Storage (CCTS), are characterized by complex multi-actor and cross-border value chains with high Capex and Opex. Realising and scaling industrial carbon management value chains require reliable and resilient revenue streams that continuously finance the decarbonisation activity and demonstrate security 
of investment. Hence, dedicated policy instruments and financial incentives, e.g. revenues from credit sales on carbon markets, are crucial for the success of such projects. This paper investigates how different carbon management value chains may generate carbon credits in the EU, where the EU ETS and the CCS Directive pose overarching policies to be considered when aiming at carbon credit generation. Focusing on a set of three fictional, but realistic European CCTS routes, we assess their feasibility to generate carbon credits. We identify key challenges specific to each aspect of the value chain, including gaps and/or overlaps in governance, crossborder accounting, liability and permanence. Finally, we discuss challenges related to leakages and reversals at different stages of the value chains, as well as challenges for monitoring, reporting and verification (MRV).