In the race to reach net-zero emissions by the middle of this century, carbon capture, utilization, and storage (CCUS) stands out as a technology with transformative potential.
For the EU, which aims to reduce emissions while maintaining the competitiveness of European industry, carbon capture technology is critical. It prevents CO₂ emissions from industrial and power generation processes from entering the atmosphere by storing them permanently in underground reserves. This technology is particularly vital for mitigating emissions from hard-to-abate sectors like transportation and heavy manufacturing.
One major challenge is the imbalance among EU member states in CO₂ capture and storage capacity. Some countries lack sufficient geological storage sites, making cross-border storage solutions essential.
To address this, the European Commission has established a framework allowing member states with limited storage capacity to store captured CO₂ in other EU and European Economic Area (EEA) countries.
But post-Brexit, the UK – and its vast CO2 storage potential in the North Sea – is excluded.
While it is technically possible to transport CO2 for storage across the border from the EU/EEA to the UK, policy barriers make it unfeasible. Crucially, the EU’s Emissions Trading System (ETS) does not recognize CO₂ stored outside its jurisdiction. As a result, companies storing CO₂ in the UK would still need to surrender ETS allowances, effectively paying twice.
A recent report by the Carbon Capture and Storage Association, together with the Xodus Group, sets out the scale of the opportunity. The report finds that UK stores are among the most cost-effective and well-located in Europe, and that emitters in EU member states with access to the North Sea would benefit from significant cost savings if the transport and storage of CO2 across the border was supported and enabled.
The report also underscores the importance of cross-border collaboration for attracting investment in new carbon capture and storage (CCS) clusters. Access to CO₂ from the EU to the UK, and vice versa, could make it financially viable to develop storage projects across Europe , driving down costs, spurring innovation and supporting the competitiveness of European industrial players.
To advance the development of a Europe-wide CO₂ storage market, the report makes three key recommendations:
- To establish a bilateral agreement between the EU and UK under the Trade and Cooperation Agreement (TCA) to enable mutual recognition of each other’s CCS regulatory regime
- To amend EU and UK legislation to accommodate CO storage outside the EU and EEA
- To explore the other legislative changes required to facilitate cross-border CO transport and storage
To discuss the report and explore the topic further, The Parliament magazine organised an event in the European Parliament, in association with CCSA.
Opening the event, host MEP Radan Kanev said European industry was facing immense challenges. Welcoming the report, he said fellow policy-makers needed to take a pragmatic approach to support industry efforts to reduce costs and remain competitive, while decarbonising. “We expect the European industry to decarbonize but also to stay competitive. It is a very difficult task because decarbonization is often painful and expensive,” he said.
“We expect the European industry to decarbonize but also to stay competitive. It is a very difficult task because decarbonization is often painful and expensive”
MEP Radan Kanev
Stefano Miriello, Head of EU External Affairs for CCSA, said a Europe-wide CO2 storage market – including the UK – would potentially reduce storage costs for the EU emitters by 28%, and would “enable more affordable decarbonization across member states”. He also expressed concern over the delays of implementation cross-border CO2 storage, resulting in higher costs and lost opportunities to sustain fair pricing.
Augustijn van Haasteren, who serves as CCUS Team Leader at DG ENER’s Unit for Decarbonisation and Sustainability of Energy Sources, echoed these remarks. He said that while the vital role of CCUS is increasingly recognized in policy-making circles, actionable measures to support its development across Europe are yet to feed through. He called for a reform of the EU Emissions Trading System (ETS) Directive, as well as measures to ensure that emitters can connect with storage networks effectively. While there is theoretical CO2 storage capacity, “it is more difficult to achieve,” he noted.
Carol Paquier, CCS Policy Officer at the French Ministry for Energy, said a bilateral agreement between the EU and the UK would be a game-changer for the industry. “This would show that member states are willing to cooperate,” she noted. Legislative changes are also needed to make licensing and approvals faster and less burdensome for the industry, she said, adding that a clear regulatory framework across Europe for the transport and storage of CO2 would give confidence to CO2 capture project developers to progress deployment, which in turn would enable investment in infrastructure networks required to service the markets.
Olivia Powis, the CEO of CCSA, emphasized the importance of shifting to a competitive, open market. She explained that this goal could be achieved by developing multiple storage options to mitigate the risks associated with relying on a limited number of facilities. “By opening up this market, we will bring further competition between storage operators to help drive the supply chain,” she explained.
Alongside this development of a cross-border CO2 transport and storage market, policy-makers can do more to support innovation in CCS technologies, according to Codie Rossi, the Europe Policy Manager for Carbon Capture Clean Air Task Force (CATF). “There are a few new technologies still being developed especially in industries such as cement that are utilizing CCS. Oxyfuel combustion, in particular, seems to be emerging as a promising technology for the sector and we want to make sure that we’re not overly restricting the development of new technologies,” he noted.
While efforts to accelerate industrial decarbonization and advance carbon capture, utilization, and storage technologies are gaining momentum, Rossi said significant barriers to investment must be overcome. “One thing that the commission has to address is de-risking projects, because they are facing cross-chain risks, and it’s very tough to get that business case.”
Powis called on the European Commission to “significantly increase the Innovation Fund budget to enable all the projects necessary to meet our targets”, in order to help drive the industry forward.
The report also recommends the development of a robust EU regulatory framework for CCS. Paquier stressed the importance of country-specific approaches. “For example, some countries depend on gas or oil fields for storage, while others, like France, have multiple storage methods such as CO₂ mineralization.” Agreeing with this, Rossi added that future projects “could involve multiple EU countries with the Commission coordinating”.
As EU policy-makers begin to scope out what a ‘Clean Industrial Deal’ means in practice, the inclusion of CCUS will be pivotal. By creating an integrated approach to CO₂ management, from capture to storage, the EU can position itself as a global leader in achieving net-zero goals.
Read the full report on building a Europe-wide CO2 storage market