The European Commission has given the green light to the Flemish government’s support for a Kairos@C project to capture and store greenhouse gases. Kairos@C is an industrial climate project by the chemical giants BASF and Air Liquide in the Port of Antwerp.
The Commission considers the measure to be in line with European State aid rules. However, a final decision on the project has not yet been made.
Crucial and strategic
Both companies want to capture and liquefy CO2 from some installations, ship it, and permanently store it in an empty North Sea gas field, thereby reducing net greenhouse gas emissions by 20 million tons over 15 years.
It would also allow the companies to produce low-carbon hydrogen and ammonia. The project is considered crucial and strategic for the future of the port of Antwerp.
European leader
Prime Minister Matthias Diependaele: “With projects like Kairos@C, we are taking another important step toward making Flanders a European leader in CO₂ transport infrastructure and the development of a hydrogen network.”
The Flemish government is willing to co-finance the project. Each company would receive a direct investment subsidy of 30 million euros.
Financially challenging
However, the final investment decision has still not been made. Although the European Commission has now approved €260 million in state aid, that’s only one piece of the puzzle. The real problems lie elsewhere.
“For a project of this magnitude, we have to consider all the regulations and risks carefully,” a spokesperson responded.
According to BASF, the project is not profitable enough in the current economic climate. Even with hundreds of millions in subsidies, it remains financially challenging. In addition, contracts must be concluded with North Sea storage projects.
Additional support
Earlier, the European Commission decided to allocate more than 150 million euros to two Belgian projects aimed at capturing CO2 at the ports of Antwerp and Ghent.
Kairos@C previously received a European subsidy of more than 365 million euros, but project costs have increased significantly, which means the project could not start without additional support.
Economic uncertainty
In short, the EU has only approved the state aid. The real obstacle lies with the business case for BASF and Air Liquide, which is not yet sufficiently convincing due to high costs, economic uncertainty, and infrastructure risks.
Should BASF and Air Liquide ultimately decide to pull the plug on the project, it would mark a tipping point for Antwerp’s industry and even the Belgian economy.
