The European Union (EU) has approved a €3 billion Swedish aid scheme to support carbon capture and storage (CCS) to reduce carbon dioxide (CO2) released during the combustion or processing of biomass. The initiative contributes to Sweden’s climate target and the EU’s strategic objectives to achieve the climate neutrality goal by 2050. 

Companies that specialize in biomass processing, renewable energy technologies, and environmental innovation stand to benefit from this initiative, which may create new deal flow opportunities for institutional impact investors. 

Let's explore this Swedish state aid scheme in detail. 

About the €3 billion Swedish state aid scheme for biogenic CO2 capture and storage

The €3 billion Swedish scheme is a set of rules and regulations that aims to make CCS a viable and effective tool for mitigating climate change in Sweden and the EU. The scheme's goal is to support the deployment of biogenic CCS projects in Sweden and promote sustainable industry growth. It is expected to increase investors' confidence in CCS technology, reduce future CCS costs, and facilitate the development of the CCS value chain in the EU. 

How will the €3 billion Swedish state aid scheme for biogenic CO2 capture and storage work?

The aid of the scheme will be awarded through a competitive bidding process; the first auction will take place in 2024. The auction will be open to companies that: 

• Carry out an activity in Sweden that emits biogenic CO2. 
  
  

• Implement projects with a capacity to store and capture at least 50,000 tonnes of biogenic CO2 annually. 
  
  

The successful bidders will receive grants under 15-year contracts, with the aid adjusted for any additional revenue or other public support. 

The European Commission's assessment of Sweden's CO2 capture scheme

The commission evaluated the scheme under EU state aid rules, specifically Article 107(3). (c) of Treaty on Functioning of the EU and the Guideline on State Aid for Climate, Environmental Protection and Energy (CEEAG). The commission found that: 

• The scheme is necessary and appropriate to incentivize investments in CCS projects, aiding national and EU climate targets. 
  
  

• The scheme has an incentive effect because the potential beneficiaries are less likely to invest in CCS projects without public support. 

The scheme will undergo ex-post evaluation to verify the effectiveness of the competitive bidding process. 

Next steps

The state aid will run until 31 December 2028 and is projected to reduce its greenhouse gas emissions by 85% by 2045 compared to 1990 levels. 

While you’re here…

Public investment schemes like this one have the potential to create favorable investment and lending opportunities for private equity and credit firms focused on impact. . 

Seizing upon this opportunity will require an expanded deal sourcing effort, exhaustive due diligence, and ESG performance assessments. These are areas where Auquan can help. 

Auquan automates and streamlines deal sourcing, due diligence, monitoring, sustainability, and compliance workflows so teams can move faster and more efficiently. Using advanced AI, Auquan generates material and sustainability insights on any entity worldwide — public or private — fine-tuned for your team’s investment and lending requirements.

Let’s explore how Auquan can help you and your team eliminate tedious and time-consuming manual data work and focus more on what you do best: making strategic decisions ahead of the market.