Carbon capture, utilization, and storage in Europe - Part 1: A critical tool for decarbonization

Net-zero ambitions rely on a variety of solutions, one of which is carbon capture, utilization, and storage (CCUS). CCUS is a set of technologies designed to prevent carbon dioxide (CO2) – a major greenhouse gas[1] – from entering the atmosphere, where it contributes to climate change. The process involves capturing CO2 from point sources or directly from ambient air, transporting it, and either storing it underground or reusing it in various industries. When CO2 is captured from ambient air,[2] the process is referred to as direct air carbon capture and storage (DACCS), a technology still in the early stages of development. When combined with bioenergy with carbon capture and storage (BECCS), CCUS has the potential to deliver negative emissions if the amount of CO2 stored exceeds the total emissions from biomass cultivation, transport, and processing. When applied to industrial point sources, such as cement plants or power stations, it is typically referred to as industrial CCUS.

Industrial sector emissions arise from fuel combustion for power generation and from non-combustion processes like chemical reactions, and they account for around 37% of total emissions in Europe. These sectors are often classified as hard to abate due to limited alternatives for decarbonization. While energy-efficiency improvements and the adoption of low-carbon energy carriers like electricity produced from wind or solar energy or from hydrogen can reduce emissions, they do not fully address process-related emissions. In this context, CCUS has emerged as a critical technology for achieving deep emissions reductions. Although it is not a silver bullet, CCUS is increasingly viewed as a necessary component of the decarbonization strategy for these industries. Understanding how the technology works and tracking its development across Europe is essential for assessing its role in the broader climate transition.

[1] Greenhouse gases are gases in the atmosphere that absorb and re-emit infrared radiation, effectively trapping heat near Earth's surface – a process known as the greenhouse effect. Key greenhouse gases include carbon dioxide, methane, water vapor, nitrous oxides, and fluorinated gases.

[2] Ambient air is atmospheric air in its natural state.

CCUS consists of three main steps, depending on the destination of the captured carbon dioxide (see figure 1). First, the CO2 needs to be captured – either from point sources such as industrial, power-generation, or bioenergy facilities or through direct air capture. Next, the captured CO2 is transported – typically in a gaseous or supercritical state[3] – by pipelines, ships, trucks, or trains. Finally, the CO2 could be reused in applications such as building materials, food and beverage production, enhanced oil recovery (EOR), or synthetic fuels. However, such applications are currently underutilized, except for some uses like carbonated drinks, as capacity is underdeveloped, and the captured CO2 is mainly stored permanently in underground geological formations.

[3] Supercritical is a state of matter that has the properties of a gas but the density of a liquid. A gas can be transformed into a supercritical fluid by applying pressure and temperature.

CO2 sources are diverse and a challenge for capture technologies

Point sources include industrial facilities where emissions originate from fuel combustion and/or from production processes – for instance, in the cement, iron, and steel industries. Process emissions involve chemical, physical, or biological transformation of materials, such as:

In some industrial processes, such as aluminum production, process-related emissions occur alongside combustion emissions. In general, CO2 sources can be categorized by industry type (see figure 2) and by the concentration of CO2 in their emissions – both of which influence the choice and cost of carbon capture.

CO2 concentrations vary widely across emission sources. Flue gases from natural gas power plants contain 3% to 4% CO2, while coal-fired plants and natural gas combined cycle (NGCC) systems reach up to 14%. Cement and steel production emit higher levels, up to 27% CO2 post-combustion. In contrast, fermentation processes can yield nearly pure CO2, and certain chemical processes (e.g., ammonia or hydrogen production) produce high-pressure, high-concentration CO2 streams, making them more suitable for capture. Low CO2 concentrations (e.g., 4% to 15%) require more energy and larger equipment to separate CO2 from nitrogen and other gases, resulting in higher capital and operational costs.

However, technological advancements are expanding the applicability of CCUS to more complex sources, including those with low CO2 concentrations or mixed gas streams, such as cement and waste-to-energy plants.

Carbon-capture technologies: Readiness levels and limiting factors shape utilization

Carbon-capture and CO2-separation technologies can be broadly categorized into three main approaches: pre-combustion, post-combustion, and oxy-fuel combustion (see figure 3).

Post-combustion systems are used in over half of operating CCUS plants, while pre-combustion accounts for around 41%, and oxy-fuel methods make up the remainder. As shown in figure 3, each category encompasses a range of CO2-separation techniques tailored to different gas compositions and industrial settings. The choice of method depends on factors such as CO2 concentration, pressure, and the presence of other gases as detailed in table 1.

When evaluating emerging technologies, technology readiness level (TRL) is a key metric for assessing maturity and long-term reliability. Even though carbon-capture projects have been operating for decades in the oil and gas industry through EOR, applications in other industries are still developing. As a result, TRL plays an increasingly important role in project evaluation, especially in financing and risk assessment.

Transport is the stage in CCUS that connects the point of CO2 capture to the site where it will be permanently stored or utilized. For efficient transport, CO2 is typically converted into a supercritical fluid. In this form, it has a higher energy density and lower viscosity, which significantly reduces its volume and makes it easier to pump.

At commercial scale, CO2 is most commonly transported through pipelines, but ships, tanker trucks, and rail are also used depending on the distance and infrastructure (see figure 4). The entire transport process is governed by strict regulations to ensure safety and environmental protection.

Pipelines are currently the main method for transporting the large volumes of CO2 involved in CCUS and are expected to remain the dominant option. Their scalability makes them particularly suitable for high-throughput, long-term operations, and they are often the most cost-effective solution depending on the specific use case. Ships offer great flexibility, especially for regions with limited or distant storage capacities. For smaller quantities, it might be economically viable to transport CO2 over long distances. Trucks and rails are typically more suitable for transporting small volumes over medium distances.

The US has the largest CO2 pipeline network in the world, measuring around 8,369km and capable of transporting approximately 66 million metric tons per year. The first of these pipelines was built in the 1970s with the remainder constructed between the 1980s and 1990s.

In Europe, the pipeline network is currently underdeveloped. However, existing gas pipelines, which amount to 200,000km across the region, could be repurposed to transport CO2. According to a modeling study by the Joint Research Center, Europe has the potential to realize 6,700km to 7,300km of CO2 transport network by 2030. This would be sufficient to meet the 50m mt CO2 capture and storage per year that the Net-Zero Industry Act (NZIA) mandates.

However, CO2 storage capacity is unevenly distributed in Europe and concentrated around the North Sea. Due to the high costs and long timelines for pipeline development, several CCUS projects – especially inland or from smaller sources – opt to transfer CO2 through rail, barge, or truck transport.

Utilizing captured CO2 involves various methods that either use CO2 in its original form or after converting it into other products.

In 2019, approximately 230m mt CO2 (0.62% of total emissions[4]) were utilized annually, according to the International Energy Agency (IEA). The majority of this was through direct-use applications, particularly in the fertilizer industry (around 130m mt) and in EOR (about 80m mt).

Emerging technologies are expanding the ways CO2 might be used, such as in the production of synthetic fuels (renewable fuels of non-biological origin, or RFNBOs), chemicals, and construction materials like aggregates. The production of CO2-based fuels and chemicals is energy-intensive and requires large amounts of hydrogen. The carbon in CO2 enables the conversion of hydrogen into fuels that are easier to handle and use, such as aviation fuel. CO2 can also replace fossil fuels as a raw material in the production of chemicals and polymers. Less energy-intensive pathways include reacting CO2 with minerals to form carbonates used in building materials (see figure 5).

[4] Based on annual CO2 emissions from fossil fuels and industry, where land-use change is excluded.

It is important to emphasize that using the captured CO2 does not automatically result in lower emissions. The environmental impact of CO2 utilization depends on several factors, such as the origin of the CO2 (e.g., fossil, biomass, direct air), the type of product or service it replaces, the carbon footprint of the energy used in the conversion process, and the length of time CO2 remains stored in the product. In principle, it supports and strengthens decarbonization strategies. However, its net carbon-removal potential must be assessed through rigorous, case-by-case evaluation.

Carbon storage, also known as sequestration, involves injecting CO2 deep underground into geological formations that can securely hold it for hundreds of years. These formations must meet three key conditions: They need to be high-pressure, porous, and sealed by an impermeable layer to prevent the CO2 from escaping.

Once injected, the CO2 enters porous rock formations – such as sandstone – that contain countless microscopic spaces, much like a sponge. These pores can securely hold the CO2. Above these porous layers lies a thick, impermeable rock layer – often shale or claystone – that acts as a natural seal. This caprock prevents the CO2 from migrating upward, ensuring it remains trapped underground.

Suitable storage sites include depleted oil and gas fields, saline aquifers, unmineable coal seams, and basalt formations (see figure 6). These formations are always located underground, typically at depths of 2km to 3km below the surface. Some are located onshore, while others are offshore.

Regulations designed to guarantee both safety and effectiveness in the long term govern the storage process, with the site measured, monitored, and verified to ensure the CO2 remains securely stored throughout the entire storage process. According to the Intergovernmental Panel on Climate Change (IPCC), a well-designed and properly managed storage site can retain over 99% of the injected CO2 for more than 1,000 years, indicating that leakage is not considered an inherent risk.

Europe, including the UK, has significant geological potential to store CO2, with the North Sea region – especially Denmark and Norway – standing out due to its mature infrastructure and favorable geology. Most European countries have the theoretical capacity to store over a century’s worth of industrial emissions. However, this potential is unevenly distributed, with many southern, central, and eastern countries facing development challenges.

Although the North Sea continues to dominate as the preferred location for CO2 storage sites in Europe, storage opportunities are being explored in Bulgaria, Croatia, southwest France, Greece, Italy, and Romania.

In total, 191 CCS facilities (capture, storage, transport, or integrated ones) were in various stages of development across Europe in the summer of 2024. By the second quarter of 2025, this number had increased to 205, according to Bloomberg New Energy Finance.

[5] The UK government – as outlined in the carbon capture and storage program – has been supporting the delivery of four CCUS clusters capturing 20m to 30m mt CO2 per year by 2030.

After more than a decade of limited progress, CCUS reached a turning point in the European Union in 2024. Once a marginal topic, CCUS is now firmly embedded in the EU’s climate strategy, with a growing body of legislation, funding, and strategic direction aimed at scaling up deployment. This section examines how 2024 policies have shifted the course of CCUS (see figure 8).

The EU laid the groundwork for CCUS with Directive 2009/31/EC, which established rules for the safe geological storage of CO2. In July 2024, the European Commission updated the directive’s guidance documents to reflect technological advances and support member states in identifying suitable storage sites.

The EU Emissions Trading System (EU ETS) enhances the role of CCUS by exempting captured and permanently stored CO2 from emissions allowances. Similarly, the carbon border adjustment mechanism (CBAM) will apply this exemption for CCUS, reinforcing its role in industrial decarbonization.

With the Paris Agreement entering into force, the EU developed the Green Deal, which comprises a range of measures to achieve climate neutrality. The formal adoption of the Green Deal target – at least a 55% net reduction in GHG emissions by 2030 – was enacted through the European Climate Law in 2021. These policies laid a strong foundation for the deployment of CCUS.

Since then, the most significant legislative development came with the adoption of the NZIA in 2024, which:

Published in early 2024, the EU’s Industrial Carbon Management strategy (ICMS) calls CCUS “indispensable for climate policy.” It outlines actions for CO2 capture, transport, storage, and removals, targets 450m mt CO2 per year by 2050, and stresses the need for EU-wide storage assessments and transport infrastructure.

In February 2024, the commission proposed a 90% reduction in greenhouse gas emissions by 2040, explicitly identifying CCUS as a key enabler for decarbonizing hard-to-abate sectors. This was further reinforced in July 2025, when the commission proposed an amendment to the European Climate Law, formally setting the 2040 climate target at a 90% reduction in net GHG emissions compared to 1990 levels. The proposal highlights CCS, CCU, and CCUS as essential technologies to decarbonize hard-to-abate sectors, support carbon removals, and meet the target of 90% net GHG reduction, integrating them into the EU ETS and broader industrial and energy strategies.

While much of the focus has been on EU-level action, member states have also advanced their national approaches. Throughout 2024, countries submitted updated national energy and climate plans (NECPs), with varying levels of attention to CCUS. Although many plans still lack detail, some member states – such as Denmark and the Netherlands – have shown leadership by actively supporting CCUS deployment. Encouraging signals have also come from France and Germany, which are developing or revisiting their national CCUS strategies.

Beyond the EU, a growing number of European countries – including Iceland, Norway, Switzerland, and the United Kingdom – have adopted CCUS strategies, refined regulatory frameworks, or entered into bilateral agreements to support cross-border cooperation and accelerate deployment. This broader regional momentum reflects a shared recognition of CCUS as a critical tool for achieving climate neutrality.

As the EU accelerates its CCUS ambitions, the regulatory landscape remains in a formative stage. While recent strategies such as the ICMS and the NZIA have acknowledged the central role of CCUS deployment, a dedicated EU-wide regulatory framework is still under development. The current patchwork of national regulations, limited standardization, and fragmented funding mechanisms may not yet provide the clarity or scale required for long-term infrastructure planning. The absence of harmonized rules for third-party access, tariff structures, and cross-border coordination – particularly with the UK – continue to shape the conversation.

Yet, momentum is building. CCUS is no longer a peripheral concept in Europe’s climate strategy – it is becoming one of the most relevant pillars for achieving net-zero emissions. With technologies maturing, infrastructure expanding, and policy frameworks taking shape, Europe is laying the groundwork for a robust and investment-ready CCUS ecosystem. Realizing its full potential will require coordinated regulation, cross-border collaboration, and sustained investment. As the region moves from ambition to implementation, CCUS offers a critical pathway to decarbonize hard-to-abate sectors and secure long-term climate resilience.

In our next paper, we will take a closer look at the CCUS market, including capacity trends, costs and key sectors.