The CO2SMOS Consortium Urges EU Policymakers to Address Key Gaps in Regulatory and Funding Frameworks to Enable Widespread Adoption of Sustainable CO₂-Based Chemicals

As the EU advances its efforts to reduce fossil fuel dependency and foster a circular carbon economy, the CO2SMOS project, a Horizon 2020 initiative funded by the European Union, has undertaken an in-depth analysis of recent EU legislation shaping a policy framework for fossil-free chemicals. Building on these insights, the project recommends a targeted set of policy actions aimed at enabling the large-scale adoption of Carbon Capture and Utilisation (CCU) technologies and increasing the uptake of CO₂-based products across Europe. The recommendations outline essential regulatory adjustments and funding enhancements to support the EU’s climate goals and transition toward a sustainable carbon economy, particularly in the chemicals sector.

Closing Regulatory Gaps to Promote CCU Technologies

Despite recent significant progress, the EU’s existing regulatory framework still poses significant barriers to scaling up CCU technologies. Key challenges include inconsistencies in carbon accounting, the absence of biogenic carbon certification, and limited market-pull mechanisms to incentivise the use of sustainable carbon sources. To address these issues, the CO2SMOS consortium proposes the following recommendations:
• Reward Carbon Reuse: Reform carbon accounting practices to prioritise the use of captured carbon over fossil fuels, encouraging industries to choose sustainable alternatives.
• Develop Certification Schemes: Establish an EU-wide certification system for biogenic carbon to ensure consistency and credibility across markets.
• Set Binding Renewable Carbon Targets: Introduce mandates for non-fossil carbon incorporation across key industries, including packaging, plastics, and textiles.
• Simplify Regulatory Approvals for Innovative Projects: Streamline state aid and regulatory approvals to accelerate the commercialisation of CCU technologies.
• Create Demand for Sustainable Chemicals: Set specific targets for alternative carbon feedstocks and products derived thereof, similar to existing renewable energy targets.

“Implementing these reforms is essential if we are to create a supportive ecosystem for CCU technologies,” said Tudy Bernier, Policy Director at CO2 Value Europe, leading the policy activities for the CO2SMOS project. “The EU needs a regulatory framework that not only promotes innovation but also rewards sustainability at scale. These recommendations will help create a fair and balanced system where carbon reuse is prioritised, and sustainable practices to manufacture the materials of the future are incentivised.”

Expanding Funding to Bridge the Gap Between Innovation and Industrial Scale-Up

In addition to regulatory reforms, the consortium highlights a pressing need for enhanced funding mechanisms to support CCU development across Technology Readiness Levels (TRLs). Existing funding programs, including Horizon Europe, the Innovation Fund, and Important Projects of Common European Interest (IPCEI), are critical but must be expanded to fully meet the needs of scaling up CCU technologies.

• Increase Horizon Europe CCU Funding: Strengthen funding and streamline support mechanisms across all TRL stages.
• Expand the Innovation Fund: Increase the budget for CCU-focused projects with an emphasis on achieving key milestones by 2030.
• Promote a Dedicated CCU/CCS IPCEI: Advocate for a specific Important Project of Common European Interest (IPCEI) to support large-scale carbon capture and large-scale CCU initiatives.

A Coordinated Path Forward for the Low-Carbon Transition in Europe

While the EU has made unprecedented progress in setting climate goals and establishing initial frameworks for the transition towards a low-carbon economy, significant action is needed to translate these ambitions into practical provisions. Achieving a circular carbon economy in sectors such as chemicals, which today remain almost exclusively dependent on fossil-based feedstocks, will require a combination of regulatory reform, market-driven incentives, and substantial financial investment. By implementing the recommended policy changes, the EU can create a comprehensive ecosystem that encourages sustainable innovation, replaces carbon from fossil resources and generates both environmental and economic benefits.

About the CO2SMOS Project

The CO2SMOS project is a Horizon 2020 initiative focused on developing breakthrough, cost-competitive technologies to transform carbon emissions from bioprocesses, such as fermentation, into sustainable bioproducts. These bioproducts include durable polymers, renewable biochemicals, and biodegradable materials, which can be used in packaging, coatings, textiles, and biomedical applications. The project’s innovative approach enables the production of green end-products, contributing to the long-term sustainability of bio-based industries (BBIs) by reducing the carbon footprint and replacing fossil-based chemicals with renewable alternatives like green hydrogen, biomass, and captured CO₂. For more information on the CO2SMOS project please visit https://co2smos.eu/.