Governing the development of CO₂ electrolysis: How do we give an emerging technology a chance to contribute to a carbon neutral Europe?

Sustainability transition to a climate neutral economy requires the rapid development, testing and scaling of emerging technologies currently in their infancy. Carbon dioxide electrolysis is one such promising emerging technology to produce fossil-free fuels and chemicals for a sustainable chemical industry. This paper investigates enablers and barriers shaping this technology within a European context by combining a technological innovation system (TIS) lens with political economy perspectives. Evidence from over forty semi-structured interviews, policy documents, and an expert consultation workshop reveals a fast-emerging TIS enabled by R&D, legitimisation and advocacy of carbon capture and utilisation as an emission reduction pathway, and complementary technological developments. However, factors such as availability of renewable electricity and carbon dioxide, and a policy bias towards mature technologies to meet urgent emission reduction targets are barriers to its future development. The TIS in this early formative phase, is in a state of flux and vulnerable to shifts in actor strategies, which can result in discontinuities in the learning process. We identify a need for technology-specific policies to support iterative upscaling through long-term projects, encourage niche market formation and strategically manage knowledge. In contrast to the current fit and conform narrative dominated by cost comparison with fossil fuels, we propose a need to empower carbon dioxide electrolysis with a stronger stretch and transform framing by imagining its role in a carbon neutral economy. Our methodology complements existing techno-economic assessments by bringing forth a rich narrative of underlying innovation processes and offers important policy insights for governing emerging technology development.