Turning CCS ambition into reality: Europe must now build the framework

Despite growing political ambition, Europe risks falling short on CCS delivery. The reason is simple: targets alone do not build projects. Only a credible regulatory and investment framework does.

 Carbon Capture and Storage (CCS) is no longer a theoretical option in Europe’s decarbonisation debate. It is a recognised necessity if we want to keep industry in Europe. The technology is mature, the geological potential is well understood, and European industry has the knowledge to develop it and stands ready to invest – particularly for those sectors that have no viable alternatives to deep emissions reduction. Yet market development is slow due to the lack of a solid business case.

 When ambition runs ahead of reality

With the Net-Zero Industry Act (NZIA), the European Union took the decisive step of introducing a binding obligation for 44 oil and gas producers to collectively deliver 50 million tonnes of annual CO₂ injection storage capacity by 2030.  This leaves less than 5 years to design, obtain permits, finance and commission large-scale storage projects – an unprecedented challenge in any industrial sector, a piece of the puzzle left to be solved by only one segment of the entire CCS value chain, until a CSS project takes typically between two to follow the years to develop. 

 The numbers tell a sobering story

Today, only around 0.025 million tonnes of NZIA-eligible CO₂ storage is in operation in the EU. If we count projects that have taken Final Investment Decision (FIDs), EU storage capacity would reach only around 3 million tonnes. Looking across Europe as a whole, that figure rises to roughly 20 million tonnes by 2030 – still far short of the EU-level 50 million tonnes target.

This gap is not the result of a lack of commitment or technical readiness: it simply reflects a mismatch between political ambition and the actual administrative, business, and operational preconditions needed to turn it into reality.

 Targets do not make projects – business cases do!

For CCS to scale, every part of the value chain needs to come together. Today, it does not.
Emitters still lack sufficient incentives to invest in  CO₂ capture. Cross-border transport rules remain incomplete. And without long-term demand certainty, storage developers cannot take final investment decisions. On top of this, permitting timelines still often exceed the years available before 2030.

 In short, the sequence is wrong. Europe has put the storage obligation in place before ensuring that capture, transport, and market conditions are aligned.

Our  industry’s objective, however, remains unchanged: to deliver safe, competitive and large-scale CO₂ storage for Europe. Doing this, in respect of the highest standards, requires  a renewed policy focus on the fundamentals that make the CCS value chain investable.

 Strengthening the business case for carbon capture

No storage project can reasonably exist without CO₂ to store. Today’s EU Emissions Trading System price alone is insufficient to unlock widespread investments into capture , particularly in hard-to-abate industrial sectors.

 This is why dynamic, complementary policy instruments are essential. These include de-risking mechanisms such as Carbon Contracts for Difference, guarantee funds, and targeted support through ‘Important Projects of Common European Interest (IPCEI)’ or the Connecting Europe Facility (CCFDs).

First movers also need predictable rules, including clarity on grandfathering at the moment of final investment decision. Demand-side incentives will naturally encourage long-term contracting between emitters and storage providers.

 Without these elements, there is no value chain – only stranded ambition.

 Building Europe’s CO₂ transport backbone

Even with a stronger business case for capture, CO₂ must be able to move efficiently from emission points to storage sites. Today, this remains one of the most significant bottlenecks.

Fragmented national rules, limited pipeline and shipping capacity, poor integration between transport modes, and slow permitting processes all stand in the way. In many cases, emitters are simply unable to access suitable storage, even where it exists.

 The forthcoming EU legislation on CO₂ markets and infrastructure, the first legislative initiative from the Industrial Carbon Management Strategy, represents a critical opportunity. It should focus on planning cross-border transport corridors linking industrial clusters to storage hubs, streamlining permitting to avoid multi-year delays, and mobilising instruments such as IPCEIs, the CEF and guarantee schemes for first-of-a-kind infrastructure.

 Crucially, the framework must allow for a mix of transport modes – pipelines, ships, and interim solutions – so the system can scale progressively in an efficient way. This is the physical backbone of CCS: steel in the ground and routes on the map.

 Making CO₂ storage a competitive European service

Once capture and transport are in place, the focus shifts to market design. Who can access storage, under what conditions, and across which borders?

A functioning European CO₂ market should enable competition between storage sites, ensuring efficiency and innovation. It must guarantee cross-border access to the best available storage resources, including those in the North Sea and neighbouring EEA and UK regions.

Fragmentation must be avoided.

 At the same time, regulation should remain proportionate. The analysis by the University of Groningen shows that CO₂ storage markets already display competitive characteristics. What is needed is not heavy-handed regulation, but common principles on liability, monitoring and access – while allowing storage to remain a competitive service rather than a regulated utility.

 A moment to get it right

The debate surrounding the NZIA storage obligation has been intense, but the direction of travel is clear. CCS must scale, and Europe needs a framework capable of delivering it. The path forward is well defined: 

• Incentivize capture to underpin storage investment; 
• Lift remaining national bans on CO₂ storage; 
• Accelerate permitting; enable cross-border transport corridors; 
• And keep regulation flexible as the market matures.

 The technology is ready. Europe now has a narrow window to align ambition with delivery. If it succeeds, CCS can underpin climate progress, industrial competitiveness, and a credible pathway to net zero.