CCS: How to successfully build an infrastructure for carbon capture and storage
Carbon capture and storage is significantly more expensive than previously projected yet remains necessary to achieve climate neutrality. Its successful ramp-up will require a comprehensive set of policy and finance measures.
Escalating geopolitical tensions and the deepening fossil energy crisis highlight the urgent need to accelerate the transition towards clean energy. Yet to achieve climate neutrality, carbon capture and storage will still be needed for a limited number of processes, particularly in industry and waste management. It will also play a role in removing carbon from the atmosphere to generate “negative emissions”.
However, the costs for existing and planned carbon dioxide (CO₂) storage projects are significantly higher than previously expected, a recent analysis by the think tank Agora Industry in partnership with Oeko-Institut shows. The costs for capturing, transporting and storing carbon currently range between 150 and 300 euros per tonne. With the European Emissions Trading System (ETS) carbon price currently hovering around 75 euros per tonne, a significant cost gap renders investments in the CCS value chain economically unviable.
Alongside the financial challenge, extended project development timelines present a significant barrier: the lead times for new offshore CO₂ storage facilities lie between 6 and 13 years, meaning available capacities will increase only slowly and remain limited in the near future. Early projects demonstrate that CCS can provide a climate-neutral solution for sectors with limited alternatives for emissions reduction. In order that the development of CCS in Europe becomes successful, targeted policy action are required. Policymakers should prioritise closing the cost gap relative to the CO₂ price, accelerating the development of CO₂ infrastructure and strategically steering limited storage capacity to key sectors, like cement and lime production.
The study feeds into the debate at a crucial time as the European Commission prepares a policy package – expected towards the end of 2026 – to further the buildout of CO₂ infrastructure in Europe.
A broad set of policy measures are needed to ramp up CCS
According to the researchers, deploying CCS at scale requires a comprehensive and coordinated policy mix underpinned by a targeted industrial strategy. Along with a robust CO₂ price, strong planning and financial frameworks, a broad set of measures to initiate CO₂ value chains and secure the infrastructure build-out are needed. Especially during the initial ramp-up phase, targeted funding instruments for emitters and state-backed guarantees for infrastructure development will be essential to help companies bridge the financial gap and de-risk early investments.
Strategic use of limited carbon storage capacities
The two organisations evaluated offshore CO₂ storage projects across the European Economic Area and the United Kingdom. The data indicates that existing projects in the EU and Norway are expected to provide an annual storage capacity of just 10 million tonnes of CO₂ by the early 2030s. This represents only a fifth of the EU’s target of 50 million tonnes by 2030. Meeting the EU’s storage demand by 2050 would require two large-scale storage projects of five million tonnes annual injection capacity each to become operational every year until then.
Given the slow development of operational storage capacities, policymakers face a dual imperative. First, the ramp-up must be accelerated by creating clear regulatory conditions and supporting frameworks for investments along the entire CCS value chain. Second, these scarce storage capacities should be prioritised for those emitting sectors with limited alternative reduction pathways, such as cement, lime and waste management industries. These priorities will be critical to address, particularly in the context of the upcoming EU CO₂ infrastructure package, the authors conclude.
The 72-page slide deck Deploying carbon capture and storage (CCS) for climate neutrality – The infrastructural and regulatory framework for CO2 transport and storage analyses the capacities and costs of existing and planned European CO₂ storage projects, as well as various transport options. The publication, which also provides policy recommendations for a swift and efficient market ramp-up, was first published in German in February 2026 and is now also available in English.
