Carbon capture and storage (CCS) technology is key to ensuring the survival and competitiveness in Italy of industries including steel, cement, and chemicals, energy group Eni and gas grid operator Snam said on Friday.

Eni, in a joint venture with Italian utility Snam, set up last year the first CCS project in Italy offshore from the city of Ravenna. Phase 1 of the hub, launched in Q4 2022, would store in the Adriatic Sea around 16 million standard tons of carbon dioxide each year, nearly half of the net annual emissions from the country’s most carbon-intensive industries.

Phase 2, scheduled to start in 2027, aims to allow storage of 4 million tons of carbon dioxide per year. One million tons will come from plants owned by Eni and the remaining 3 million tons will be reserved for third-party industrial emitters.

The project could help to decarbonize gas-fueled power stations and make it possible to produce low-emission hydrogen, contributing to energy transition targets.

CCS technology removes from the atmosphere carbon dioxide (C02) produced by industrial processes or captures it at the point of emission and stores it underground.

The International Energy Agency (IEA) says this technology can play a vital role in achieving global climate goals.

However, critics say it risks prolonging the use of fossil fuels and question whether it is commercially viable.

The first CCS hub presents an opportunity to position Italy as a pivotal country for carbon storage in southern Europe, the two groups said, calling on the government to define a competitive framework capable of attracting investments.

“Several high-emission companies located around the French city of Marseille have expressed interest in our project,” Snam Chief Executive Stefano Venier said while presenting the study at the Cernobbio 2023 business conference.

Italy could convert into carbon storage sites several depleted reservoirs in the Mediterranean Sea, adding to the capacity provided by the Ravenna hub.

“Eni intends to leverage its experience and skills to reconvert part of the existing infrastructures and production districts into carbon dioxide storage hubs,” Eni Chief Operating Officer for Natural Resources Guido Brusco said in a statement.