Assessing the prospects, costs, and risks of carbon capture and storage implementation in Germany

Abstract

Carbon Capture and Storage (CCS) is an important cornerstone of Germany's future Carbon Management Strategy (CMS). This case study evaluates the costs, risks, and deployment prospects of CCS in Germany, with a focus on industrial and energy sectors. Our comprehensive framework integrates capture, transport, and storage cost modeling with Monte Carlo risk simulations to assess economic viability under three CCS capacity deployment scenarios. Further, assuming three different cost developments, our findings reveal that cumulative CCS costs for the Med scenario range from €39.2–€81.5 billion by 2045, with profitability contingent on uncertain cost reductions and elevated EU ETS carbon prices. Monte Carlo analyses highlight up to 50 % risk premiums for costs due to project failures. These results underscore the significant cost associated with CCS. Our analysis calls for a careful, economical integration of CCS within broader decarbonization strategies with a focus on hard-to-abate sectors which cannot be decarbonized by scalable alternatives like green hydrogen or direct electrification.