Capturing and reusing carbon: the key role of CCU in building Europe’s CO2 single market

The incoming new legislative package for CO2 markets and infrastructure in Europe is good news: it means that the European Union is ready for planning and investing in carbon capture to deliver on climate targets. But it will be successful under one condition: the package must address not only geological storage of CO2, but also carbon utilisation.

The European Union (EU) agreed in December 2025 on a clear trajectory for reducing greenhouse gas (GHG) emissions in the coming years: it is now bound by a net 90% GHG emission reduction target by 2040 compared to 1990 levels, with a contribution of up to 5% of “high-quality international carbon credits”. In other words,

The EU needs to accelerate its clean transition through a wide range of levers: deployment of renewable and low carbon energy, electrification, energy efficiency, decarbonisation, defossilisation, and carbon removals.

Industrial carbon management – a concept that brings together carbon capture and storage (CCS), carbon capture and utilisation (CCU), carbon removals (CDR) and CO2 transport – is a key pillar for reaching those climate objectives. And that’s where the new EU CO2 markets and infrastructure package comes in. 

Without CCU, no net zero target is reachable

In 2024, the European Commission released its Industrial Carbon Management (ICM) Strategy, which described ICM technologies as “a sound and important building block for a sustainable and competitive economy in Europe”. This EU strategy spells out that not every economic activity can be electrified – for example, sectors like cement, lime, steel, aviation or shipping, which together account for more than 15% of total GHG emissions in Europe and are the hardest to reduce. In those sectors, the strategy shows that carbon management pathways (CCS, CCU, CDR) are a must: to manage CO2, one needs to capture it; once captured, it can then be transported to be geologically stored or be utilised and turned into products in the form of synthetic fuels, e-chemicals or stored in mineralisation products. Transporting CO2 is a major part of those value chains, as it enables to bring CO2 towards geological sites or utilisation sites – when the latter are not located where the CO2 is generated. 

As CO2 Value Europe, we represent the utilisation part of carbon management: by using captured carbon as feedstock to manufacture products, CCU technologies help defossilising the economy, build industrial sovereignty by deploying novel processes, and reduce dependency on imported fossil fuels.

Defossilisation is essential where industrial processes and products cannot be replaced by carbon-free alternatives – whether it is by manufacturing drop-in synthetic fuels for planes or ships that cannot be electrified, or by providing alternative non-fossil carbon feedstocks for chemicals that are carbon-based by nature, meaning critical molecules essential to making pharmaceuticals, solvents and other building blocks needed for producing everyday goods. The ICM Strategy assesses that CCU will play a key part in decreasing emissions in Europe: it quantifies that in 2040 “[up] to a third of the captured CO2 could be used” – hence, about 93 out of 280 Mt CO2 –, and roughly 45% in 2050 (about 200 out of 450 Mt CO2). At least 26 CCU projects are expected to be operational in the EU27 and Norway by 2030 for an overall capacity of around 2 300 000 tonnes of CCU products per year. 

CCU can substitute fossil-based products with fossil-free equivalents and build a circular carbon economy, where the waste from one sector can become feedstock for another. And in a world where we continue to use carbon-based products, CCU is an absolute must to reduce our dependency on fossil resources to manufacture those products while reducing our GHG emissions.

In other words, reaching net zero emissions by 2050 requires deploying CCU at scale, along many other levers.

CO2 infrastructure deployment must consider both storage and utilisation

So far, the bulk of EU discussions on CO2 transport infrastructures have focused on storage. Of course, transport infrastructures are consubstantial to any CCS project, so it is understandable that it takes a certain focus. Some CCU projects can also be developed without transport, if the carbon is utilised where it has been produced. 

But it would be short-sighted to consider CO2 transport will only matter for CCS, or that CCS and CCU projects could not develop in synergy. As a matter of fact, several projects have both CCS and CCU outputs. More generally, CCS and CCU are like wind and solar power: they are both needed, they have their respective constraints and advantages for their deployment, and they can complement each other. And more importantly, CO2 transport can help both technologies thrive. 

This is confirmed by the EU ICM Strategy, which says that “CO2 transport infrastructure is the key enabler common to all [carbon management] pathways. Where the captured CO2 is not used directly on-site, it will need to be transported and either used in industrial processes (e.g. for construction products, synthetic fuels, plastics or other chemicals) or permanently stored in geological formations”.

Unfortunately, in current consultation and discussions, such inclusivity of all carbon management pathways is not always followed. We call on EU authorities to correct course and ensure that CCU, CCS and CDR are adequately and proportionately addressed in the future CO2 markets and infrastructure package. 

CCU projects will not only complement storage projects, but they can also help diversify destinations of CO2 and bring additional revenues to deploy those infrastructures. It is equally important to consider that projects can target both CCS and CCU destinations: for example, a waste-to-energy plant could direct its fossil-derived CO2 to CCS, while sending its biogenic CO2 to CCU. 

Additionally, it is essential that CCU projects have stable access to carbon feedstock. Such important quantities cannot be provided solely by neighbouring sources. This is why it is essential that the design of the Union’s CO2 transport infrastructures fairly considers the needs of both CCU and CCS.

CCU technologies are going to be central to the creation of a European CO2 single market: ensuring that wherever needed, CO2 is captured, transported, and stored or utilised.

And CCU, as a modular and flexible technological solution, is bound to contribute to creating a consistent and coherent CO2 single market, where CO2 is considered a commodity connected to the market of the downstream CCU products.

It is crucial that this infrastructure is built for CCU as well as CCS and that both are properly included in the development of the networks. This should be reflected in network planning, permitting, and other additional legislative obligations. And this is why we call for the creation of an open-access intermodal transport infrastructure where CO2 can enter and exit the network as needed along the way, and is accessible to small and medium emitters and off-takers, as well as larger ones.

Creating a fossil-free Europe

CCU is about making fossil-free products and fossil-free markets: e-methanol to run ships, e-kerosene to fly planes, e-methane to make industries function, e-chemicals to produce textiles, polymers and pharmaceuticals, or construction products to store CO2 permanently. Those novel products can be manufactured today, the technologies are ready, those markets can be deployed. CCU products bring value because they are high-quality and fossil-free. And they are commodities that can be sold and exchanged, and revenues from those markets can contribute to the deployment of transport infrastructures. 

What makes CCU a game-changer is that it’s about redefining business models and transforming EU industries. It’s about reusing captured carbon to replace fossil resources and move away from our current reliance on imported fossil feedstocks to meet our products’ needs. It’s about building a fossil-free Europe. Yes, it comes with a cost, it comes with bold policy choices in an uncertain world, and a rupture with a modern economy built on coal, oil and gas. In a world struggling with climate change, and on a continent with little fossil resources, defossilisation is both the rational and strategic way forward. 

It requires incentives, it requires access to infrastructures, and it requires a long-term vision of considering fossil fuels a relic of the past. Delivering on this vision means capturing CO2, transporting CO2, and utilising CO2.

A new EU CO2 market and infrastructure package must be the next step towards defossilisation. But it will only be able to deliver if it embraces CCU technologies. 

www.co2value.eu.