State aid for BECCS
Sweden has a good starting point for implementing BECCS thanks to its large point source pollution of biogenic carbon dioxide and several industries are already investing in the development of this technology. However, as BECCS is not economically feasible at present, state aid is needed to continue development.
The Swedish Energy Agency is proposing a support system for BECCS in the shape of reversed auctioning. Reversed auctioning means that, for example, a pulp and paper industry or a combined heat and power plant can submit a bid on how much carbon dioxide they can capture and store, and at what cost. Winning bid will be the best solution at the lowest cost. According to the agency’s investigative report, the costs are estimated at SEK 1,100–2,000 per tonne of carbon dioxide. The state aid will cover costs for capture, transport and storage during a binding period of 15 years.
Reversed auctioning is cost effective
In the report, the Swedish Energy Agency has deemed reversed auctioning as the most cost-effective support system. It is also considered to be compatible with EU state aid rules. In addition, Sweden can benefit from the collected experience of other countries concerning the reversed auctioning process.
Level of ambition for the support system
The level of ambition for the support system is based on the targets stipulated in the Swedish Government Official Report 2020:4 – The road to a carbon neutral future. The goal, according to the governmental report, is to capture and store two million tonnes of biogenic carbon dioxide per year by 2030. However, the feasible potential for BECCS in Sweden amounts to at least 10 million tonnes of biogenic carbon dioxide per year in a 2045 perspective. In addition, the technical potential is considered twice as great.
