Decision-making and coordination in bio-CCUS value chains: Finnish companies, municipalities, and the role of national and EU-level policy

Biogenic carbon capture, utilization, and storage (bio-CCUS) is technically feasible and strategically important for climate policy, yet deployment remains largely pre-commercial. While individual bio-CCUS technologies are increasingly well understood, the actor-level dynamics and governance conditions determining value chain formation are less studied. We address that gap through semi-structured interviews with representatives of 13 companies across bio-CCUS value chains and four forerunner municipalities in Finland, characterizing the decision-making environment facing both groups, complemented by an analysis of EU-level and national regulation. The findings reveal that investment in bio-CCUS is primarily constrained by system-level coordination failures: a chicken-and-egg dynamic persists between CO₂ producers waiting for stable demand and users waiting for reliable supply, while missing logistics infrastructure, spatial dependencies, and regulatory fragmentation across legal domains compound the challenge. Biogenic CO₂ is currently largely excluded from EU ETS compliance incentives, and strong policy support for RFNBOs contrasts with the near-absence of comparable incentives for other CCU applications. National policy instruments translate EU frameworks into concrete incentives, but their design may reinforce a focus on fuel-based pathways and limit participation of smaller actors. Municipalities can facilitate local value chain development through land-use zoning, and through linking actors, but cannot substitute for missing market-level incentives. We interpret these findings through the lens of coordination failure, organizing them around four interacting mechanisms – demand formation, complementary investment, infrastructure coordination, and multilevel intermediation – that jointly determine whether investment proceeds. Economic viability of bio-CCUS emerges as a systemic outcome that no single actor can bring about alone.