Europe’s carbon capture and storage pipeline: Challenges ahead

European carbon capture projects reach investment decisions, but infrastructure gaps remain

Europe’s carbon capture and storage sector added ten new projects to its final investment decision tally in 2024 and early 2025. However, the gap between announced capacity and built infrastructure continues to widen. The Institute for Energy Economics and Financial Analysis recently warned that the European pipeline is losing momentum, reflecting concerns that many proposals remain stuck in planning stages while policy deadlines approach.

The Clean Air Task Force reports that the ten projects represent around 4 million tonnes of annual CO₂ capture capacity and approximately 14 million tonnes of storage capacity. These include Stockholm Exergi’s bioenergy facility in Sweden, Hafslund Oslo Celsio’s Klemetsrud waste-to-energy project in Norway, and multiple developments within the UK’s HyNet cluster. Denmark’s Project Greensand and Belgium’s Fluxys c-grid transport infrastructure also secured investment commitments.

Nevertheless, the scale of progress falls short of what Europe needs to meet its stated targets. The EU Industrial Carbon Management strategy calls for 50 million tonnes of CO₂ injection capacity annually by 2030, rising to 250 million tonnes by 2040 across the European Economic Area. Current operational and under-construction capacity sits well below these figures.

Five operational facilities serve a pipeline of 191 projects

The Global CCS Institute recorded 191 commercial-scale carbon capture projects across Europe by mid-2024. Of these, only five were operational, with ten under construction. The remainder exist in various planning and development stages, from feasibility studies through to permitting applications.

This distribution highlights a familiar pattern in industrial decarbonisation. Early-stage announcements proliferate, yet relatively few projects progress to construction. Financial close requires aligned policies, proven storage sites, transport networks, and credible revenue streams. Many European proposals lack one or more of these elements.

The Joint Research Centre emphasises that building the complete value chain for capture, transport, and storage remains essential. The EU’s Net-Zero Industry Act reinforces this goal, but legislation alone does not deliver pipelines, compressors, or injection wells. Physical infrastructure must follow policy commitments, and that process takes time.

Europe’s operational projects include earlier landmarks such as Northern Lights Phase 1, Ørsted’s Kalundborg CO₂ Hub, Yara Sluiskil, and Porthos. These facilities demonstrated that commercial-scale deployment was feasible in the North Sea region. Replicating that success elsewhere in Europe has proven more difficult.

North Sea dominance leaves other regions waiting for infrastructure

Norway, the Netherlands, Denmark, Belgium, and the UK account for most of Europe’s carbon capture momentum. Geography explains much of this concentration. The North Sea offers established offshore industries, suitable geological formations, and regulatory frameworks adapted from oil and gas operations.

Other European regions face longer development timelines. Projects in central and southern Europe often lack nearby storage sites or must rely on cross-border transport networks that do not yet exist. Consequently, facilities in landlocked or Mediterranean locations struggle to secure bankable storage agreements.

This infrastructure gap creates a commercial problem for manufacturers and energy producers. A cement plant in Poland or a waste incinerator in Italy cannot easily access storage capacity comparable to what facilities in Rotterdam or Teesside might obtain. Until transport networks extend beyond the North Sea basin, carbon capture deployment will remain geographically constrained.

The EU’s policy framework anticipates cross-border CO₂ networks, but building them requires coordination between multiple member states, regulators, and commercial operators. Such coordination has historically proven slow, particularly when infrastructure investments must precede guaranteed demand. Developers face a classic chicken-and-egg dilemma: storage operators need capture volumes to justify investment, while capture projects need confirmed storage access to reach financial close.

Financing models rely on blended public funding and carbon removal offtake

Recent investment decisions depended heavily on government support schemes and corporate carbon dioxide removal agreements. Stockholm Exergi’s bioenergy project, for example, benefits from Sweden’s policy framework for negative emissions. Similarly, HyNet cluster projects in northwest England rely on UK government contracts for difference and industrial decarbonisation funding.

These blended financing structures reduce project risk but also limit deployment speed. Governments can only support a finite number of projects in each funding round, meaning many proposals must wait for future allocations. Meanwhile, carbon removal offtake markets remain nascent, with limited liquidity and price transparency.

Consequently, projects without government backing face difficulty securing debt or equity. Banks and institutional investors remain cautious, particularly when revenue depends on long-term carbon prices or unproven technology performance. As a result, the pipeline of shovel-ready projects stays smaller than the pipeline of announced proposals.

This financing constraint affects the entire sector’s trajectory. Even if permitting and storage access improve, capital availability determines how many projects can proceed simultaneously. Europe’s 2030 target requires rapid scaling, yet current investment rates suggest a slower build-out.

Permitting delays and storage licensing slow progress across member states

Regulatory approval timelines vary significantly across European jurisdictions. Some countries have adapted existing oil and gas licensing frameworks for CO₂ storage, while others are still developing standalone regimes. This inconsistency creates uncertainty for developers planning multi-country projects.

Storage site licensing involves geological surveys, environmental assessments, public consultations, and safety approvals. The process typically takes several years, even in jurisdictions with established procedures. For offshore storage sites, maritime spatial planning adds another layer of complexity.

Capture facilities face their own permitting challenges. Industrial plants seeking to add carbon capture equipment must satisfy environmental, health, and safety regulations that were often written without CO₂ capture in mind. Consequently, regulators and operators navigate gaps and ambiguities in existing frameworks, slowing approval processes.

Transport infrastructure faces similar hurdles. Proposed CO₂ pipelines require route approvals, land access agreements, and environmental impact assessments. Offshore pipelines need additional marine consents. Each jurisdiction applies different standards and timelines, complicating projects that cross borders or territorial waters.

These regulatory obstacles do not necessarily reflect policy hostility toward carbon capture. Rather, they reveal the practical difficulties of deploying new industrial systems within existing administrative frameworks. Until permitting becomes more predictable, project timelines will remain uncertain and financing will stay constrained.

What UK businesses managing emissions should understand

• Europe added ten carbon capture projects to final investment decision status in 2024 and early 2025, representing 4 million tonnes of annual capture capacity and 14 million tonnes of storage capacity.
• The EU aims for 50 million tonnes of CO₂ injection capacity by 2030 and 250 million tonnes by 2040, but current operational and under-construction capacity falls well short of these targets.
• As of mid-2024, Europe had 191 commercial-scale carbon capture projects across all development stages, with only five operational and ten under construction.
• North Sea countries dominate European carbon capture activity, leaving central and southern European facilities without nearby storage access or transport infrastructure.
• Most recent projects reaching investment decisions relied on government support schemes and corporate carbon removal offtake agreements rather than pure commercial financing.
• Storage site licensing, capture facility permitting, and transport infrastructure approvals remain slow and inconsistent across European jurisdictions, creating delays and uncertainty for developers.

Commercial considerations for manufacturers and energy-intensive operators

UK businesses in cement, chemicals, steel, waste-to-energy, and other hard-to-abate sectors should track carbon capture infrastructure development closely. Access to storage and transport capacity will increasingly influence site-level decarbonisation options, particularly for facilities that cannot easily electrify or switch fuels.

Companies considering carbon capture for their own operations face a multi-year development process. Initial feasibility studies must confirm technical suitability, followed by detailed engineering, permitting applications, and financing arrangements. Securing a storage allocation agreement typically represents a critical path item, and availability varies significantly by location.

For businesses without immediate carbon capture plans, the sector’s development still matters. Industrial clusters built around shared CO₂ infrastructure may offer competitive advantages to participating sites. Conversely, facilities distant from planned networks could face higher abatement costs or limited options when regulations tighten.

Public sector suppliers should pay particular attention. UK government procurement policy already requires carbon reduction plans from many contractors. As infrastructure becomes available, those policies may evolve to favour suppliers with concrete decarbonisation actions rather than just commitments. Similarly, EU suppliers may encounter tightening requirements under the Corporate Sustainability Reporting Directive and related frameworks.

Supply chain positioning also deserves consideration. Manufacturers selling into sectors with high climate scrutiny may find that customers increasingly ask about production emissions. Having credible reduction pathways in place, including potential carbon capture options where appropriate, can become a commercial advantage.

We support businesses evaluating their decarbonisation pathways through carbon reporting and compliance services that help identify practical options aligned with regulatory requirements and commercial objectives. For organisations navigating Scope 1 and Scope 2 emissions reduction, understanding the available technology landscape matters as much as meeting immediate reporting obligations.

Policy alignment and carbon markets create additional complexity

Europe’s carbon capture development occurs against a backdrop of evolving climate policy. The EU Emissions Trading System continues to tighten, raising compliance costs for unabated emissions. Meanwhile, the Carbon Border Adjustment Mechanism introduces new considerations for traded goods, potentially affecting manufacturers in carbon-intensive sectors.

UK policy operates on a parallel but distinct trajectory. The government’s approach to industrial decarbonisation includes cluster sequencing, contract for difference mechanisms, and support for hydrogen production with carbon capture. These schemes create opportunities for some facilities while leaving others to pursue unsubsidised routes.

Carbon removal markets add another dimension. Bioenergy with carbon capture generates negative emissions that can potentially be sold to organisations seeking to offset residual emissions. However, these markets remain fragmented, with varying standards and limited price transparency. Projects relying on carbon removal revenue face uncertainty about long-term offtake agreements.

This policy complexity makes commercial planning difficult. Businesses must evaluate decarbonisation options against uncertain future costs, evolving regulations, and incomplete infrastructure. Those that wait for perfect clarity may find themselves behind competitors who moved earlier. Those that commit prematurely may lock in suboptimal solutions.

The most prudent approach typically involves maintaining flexibility. Understanding which technologies might become available, what policy changes appear likely, and which commercial structures could work allows businesses to position themselves for various scenarios. Rigid long-term commitments made without considering alternative pathways often prove problematic when circumstances shift.

Where to find authoritative information on European carbon capture policy

The Department for Energy Security and Net Zero publishes UK policy updates on industrial decarbonisation, carbon capture clusters, and related infrastructure programmes. Their guidance documents explain support schemes and eligibility criteria for businesses considering carbon capture investments.

The European Commission’s climate action pages detail the EU’s Industrial Carbon Management strategy, including targets for 2030 and 2040. These resources explain how carbon capture fits within broader Net-Zero Industry Act provisions and emission reduction frameworks.

For project-level data and global context, the Global CCS Institute maintains comprehensive databases of announced, under-construction, and operational facilities worldwide. Their reports track project progression and identify trends in technology deployment, financing models, and regional development patterns.

Businesses requiring support with carbon reduction planning and compliance obligations can access practical guidance through our net-zero programme, which helps organisations navigate reporting requirements while identifying commercially viable decarbonisation pathways.