In the race to cut carbon emissions, conventional industries in the chemical, steel and cement fields face the toughest challenge because they rely on fossil fuel and generate high levels of emissions.
In Italy, the “hard to abate” industries are responsible for 64% of industrial greenhouse gas and 20% of emissions. These companies’ processes require high temperatures and high pressure. Simply offering electricity as a solution is not enough. More innovation is required to help these companies reduce emissions.
In one of the most polluted areas in Europe – the Po Valley in northern Italy – a steel company is working on a solution. Marcegaglia Ravenna, located in the Ravenna-Ferrara industrial hub, specialises in flat carbon steel products for the automotive industry, home appliances and building sectors.
The company has designed a carbon capture project to reduce emissions at one of the main steel plants in Italy and Southern Europe. This project, called AdriatiCO2, applied for funding from the European Commission’s Innovation Fund in 2022, but it was turned down.
The Innovation Fund is one of the world’s largest grant programmes for low-carbon technologies. The fund, implemented with assistance from the European Climate, Infrastructure and Environment Executive Agency, has a goal to offer €40 billion in grants over ten years.
It focuses on highly innovative projects that can cut large amounts of emissions. To get support, projects must be significantly advanced, with a clear business case and sound financial and legal structures. Those that are not ready for a grant can still receive project development assistance (Innovation Fund - Project Development Assistance) from EIB Advisory.
Though AdriatiCO2 has not received a grant from the Innovation Fund, it was identified as having high potential and received project development assistance. EIB Advisory experts helped Marcegaglia Ravenna develop their ideas further and apply again for the Innovation Fund in 2023. If approved, the grant will help build a carbon capture plant.
EIB Advisory provided a range of technical and financial services for the AdriatiCO2 project. “We conducted a thorough review of the benchmarks in the market, as well as the financing plan and business model to address financial risks,” says Juliet Dow-Madu, the head of unit for Innovation Fund operations at the European Investment Bank.
Zoran Stanic, the head of unit for Innovation Fund projects at the European Investment Bank, says the advice included a review of the technical documentation as well as the capital and operational expenditure assumptions. “This advice helped the project more generally, and in the discussions with the technology providers, it helped better define the final project scope,” he says.
Francesco Bragagni, energy manager at Marcegaglia Ravenna, says that EIB Advisory’s support will help make AdriatiCO2 a pioneer in capture technologies in Italy and Southern Europe. “Reducing the emissions released into the atmosphere will help us meet our goal for a negative carbon footprint across the entire facility.”
