Carbon capture, utilisation and storage (CCUS): what is the EU’s plan?

Carbon capture captures the imagination. Industries which may find it hard to decarbonise, even in the long term, have for years held up the technology as a silver bullet to neutralise their emissions, while critics have lambasted it as an attempt to distract attention from other efforts to reduce emissions. The EU fully turned its attention to carbon capture, utilisation and storage (CCUS) to achieve its climate goals.

In this blog post, we take a look at carbon capture in a European context: what is the current legislative landscape? And what does it mean for businesses?

But let’s first take one step back: what is carbon capture, exactly?

What is carbon capture, utilisation and storage (CCUS)?

Carbon capture is a catch-all term for technologies that, simply put, take carbon dioxide out of the atmosphere and store them. The CO₂ can then either be used (carbon capture utilisation, CCU) or stored (carbon capture storage, CCS), both enabled by transportation. The process is most often used at large sources of CO₂ emissions: think of large industrial facilities using fossil fuels or biomass, or power generators.

CCUS technologies are especially important for hard-to-abate sectors; industries which face more difficulty in decarbonising but which will also continue to be necessary in the energy transition. Think of cement, steel, or chemicals.

 

How does carbon capturing work?

Currently, most carbon capture projects use a liquid to chemically separate the CO₂ from the other gases before they are released from the smokestacks of a factory, yielding almost pure carbon. The captured CO₂ gas is then pressurised and becomes liquid-like, making it transport-ready. Captured CO₂ is transported most efficiently through a pipeline, but transport can also be done with ships, trucks or even railways. Eventually, it can be either used as feedstock for products or permanently stored.

 

Are there different ways of carbon capturing?

Yes.

Another, newer, way to capture carbon is through a technology known as Direct Air Capture (DAC). As the name indicates, DAC removes carbon dioxide from the air directly, as opposed to directly from industrial sources. The technology does so through a series of chemical reactions which extract CO₂ from the air while returning the rest to the environment. This mirrors the way natural carbon sinks, such as the way trees and plants function. Since DAC does not have to be directly linked to CO₂ emissions from an industrial plant, the technology can remove CO₂ from the atmosphere, generating negative emissions.

Besides, there is Bioenergy with carbon capture and storage (BioCCS/BECCS). This technology involves capturing and using or storing CO₂ from processes where biomass is used as a fuel to generate energy. Since plants are already natural carbon sinks, BioCCS/BECCS should ensure that the entire process reduces the total amount of CO₂ emissions, again generating negative emissions.

DAC and BioCCS/BECCS are considered Carbon Dioxide Removal (CDR) technologies as part of CCUS technologies because they remove CO₂ that is already in the atmosphere. This differs from traditional Carbon Capture, Utilisation and Storage (CCUS), which captures CO₂ from industrial processes before it is released into the atmosphere.

 

How does carbon storing work?

Once the carbon has been captured, it can be either stored (CCS) or used (CCU). Carbon storage already occurs naturally in carbon sinks: think of forests, peatlands or oceans. The CO₂ captured through carbon capture technology is usually injected into geological formations, for example in saline formations, unused natural gas reserves or coal mines. In Europe, the North Sea seabed is a formation well-suited for carbon storage. Once stored, CO₂ should remain there for an extremely long time: it is estimated that, with well-regulated storage, over 98% of injected CO₂ remains under the surface after 10,000 years. Key projects under development in Europe include Porthos and Aramis off the Dutch shore and Bifrost in the Danish North Sea.

While, geologically, Europe has more than enough storage space, investing in transport and storage resources is capital-intensive. As a result, CCUS projects are now mainly concentrated around the North Sea, which could eventually lead to capacity constraints in Southern and Eastern Europe and to a need for high-volume CO₂ transport infrastructure.

 

How is captured carbon used?

Some examples of carbon capture usage include:

• As fuels (e-fuels) – CCU fuels can be manufactured by using captured carbon mixed with hydrogen. Since the process uses CO₂already used but not emitted in manufacturing and then releases around the same amount when the fuel is burned, e-fuels can reduce emissions from (for example) transport.
• In materials, for example by storing captured carbon in bricks or tiles used in construction.
• In chemical products, by using captured carbon in the production process of plastics or pharmaceuticals for example.

 

Why is carbon capture, utilisation and storage controversial?

Carbon capture is not without controversy. Critics argue that carbon capture, utilisation and storage grants industries a licence to continue polluting while claiming to address emissions. Moreover, there are also significant costs involved in the rollout of CCUS projects. Costs which often render other clean energy options (such as wind and solar) more financially attractive. Besides, there are also concerns that certain technologies, especially BioCCS/BECUSS, can have a negative impact on biodiversity and forest conservation. However, advocates underline that CCUS is simply necessary to become climate-neutral, as hard-to-abate industries will still be there after 2050. What is clear, meanwhile, is that the EU foresees an important role for CCUS in reducing emissions. Let’s dive into the key policies.

Regulating carbon capture, utilisation and storage (CCUS): the current European context

A strategy for carbon capture, utilisation and storage (CCUS)

In recent years, the Industrial Carbon Management Strategy, a non-legislative European Commission Communication, has brought CCUS technologies into sharper focus on the EU policy agenda. The strategy with actions to boost CCUS was presented together with a roadmap towards a 2040 climate target, which underlines the importance the EU foresees for carbon capture in helping to reach that target (the Commission advocates for a 90% emissions reduction target).

The strategy repeats the Net-Zero Industry Act (NZIA) target of 50 million tonnes per year of CO₂ storage capacity in 2030, but also comes with further indicative targets: by 2040, the Commission argues that capturing around 280 million tonnes of CO₂ is necessary to reach a 90% emissions reduction. For the first time, the Commission has given an indication of the amount of CO₂ that would need to be removed for the EU to reach its climate targets. By 2050, when the EU aims to be carbon-neutral, the EU should be able to store approximately 450 million tonnes of CO₂, capturing the remaining carbon from hard-to-abate industries. 

The Industrial Carbon Management strategy outlines a framework with actions in four policy areas:

• Deployment of CO₂transport infrastructure: the Commission intends to prepare a regulatory transport framework with EU-wide CO₂ transport infrastructure planning mechanisms, nominate European coordinators for the early development of infrastructure and establish emission accounting rules under the EU ETS and minimum standards for CO₂.
• Carbon capture and storage: the Commission plans to set up guidance for project permitting processes and establish an atlas of potential storage sites. The Commission will also develop an aggregation platform for matching CO₂suppliers with transport and storage operators and CO₂ off-takers.
• Carbon removals value chains: The Commission will assess how to provide incentives for carbon removals in existing EU legislation, develop support mechanisms for carbon removals and boost research funding on CCUS under Horizon Europe and the Innovation Fund.
• Carbon capture and utilisation: The Commission aims to promote sustainable carbon cycles in the industrial sector. In addition, the Commission will establish specific CCU roadmaps and establish a framework for tracking industrial carbon management activities.

 

CCS directive

Market regulation of carbon capture, utilisation and storage is a recent phenomenon and has so far only been targeted at CCS, but this is changing in view of the EU’s climate objectives. Transport and storage of CO₂ is regulated on an EU level through Directive 2009/31/EC (CCS Directive), which also establishes a permitting regime and defines the relationship between CCS and the EU’s Emissions Trading System (EU ETS) in terms of finance: captured and stored CO₂ is considered ‘not emitted’ and can thus help producers save money on the EU’s carbon market, potentially (at least partly) offsetting the costs of deploying and developing the technology. Under the Directive, Member States are able to select their own areas where they permit CCS and have the right to fully opt out of allowing it on their territory.

 

Certifying carbon removal projects

In late 2022, the European Commission presented a legislative proposal for Carbon Removals Certification Framework (CRCF), a key initiative following up on the Communication on Sustainable Carbon Cycles presented the year before. The Regulation concerns a voluntary certification framework which should help shore up the investment climate for carbon removal projects by ensuring that claims of carbon being removed from the air are legitimate.

The legislation contains an open definition of what carbon removals are (in line with the definition from the UN Intergovernmental Panel on Climate Change), however, no reference to negative emissions is being made. As long as CCS and CCU projects are in line with the definition, they can be certified as carbon removal projects, which should make them more attractive to investors. For example, a CCU product needs to store CO₂ for at least 35 years to “durably store” CO₂ from the atmosphere.

Based on the Framework, the European Commission developed methodologies for the certification of a range of carbon removal methods and to recognise certification schemes, of which some have been adopted in the first half of 2026.

 

CCU fuels

The revision of the Renewable Energy Directive (RED III) contains a 5,5% aggregate target for the share of advanced biofuels (including recycled carbon fuels) and renewable fuels of non-biological origin (RFNBOs) for the transport sector by 2030. Further targets for the use of RFNBOs in the transport sector are set in FuelEU Maritime (for shipping) and ReFuelEU Aviation (for aviation). Thus, if CCU fuels fulfil the technical sustainability criteria to be considered an RFNBO or a recycled carbon fuel, they can contribute to these targets; the Fit for 55 targets should help demand for clean CCU fuels. 

 

Supporting industry while decarbonising

The Net-Zero Industry Act (NZIA) lists carbon capture and storage technologies as “net-zero technologies” that are therefore able to benefit from actions including faster permitting procedures. Additionally, as mentioned, it sets a binding target for CO₂ storage. Oil and gas producers will be required to make contributions to this target by investing in or developing CO₂ storage projects and will be penalised if they fail to do so.

Carbon capture projects can benefit from EU financial aid through the Innovation Fund and the Horizon Europe platform. Additionally, in response to the Russian invasion of Ukraine and the ensuing energy crisis, the EU adopted a Temporary Crisis and Transition Framework and an amendment to the General Block Exemption Regulation to ease and simplify state aid procedures for clean energy projects. Both initiatives make it easier for Member States to financially support carbon capture, utilisation and storage projects.

What’s coming up for carbon capture in 2026?

With the Clean Industrial Deal, industrial carbon management is framed as a necessity to safeguard the EU’s industrial competitiveness, ensuring that hard-to-abate sectors can cut emissions while staying investable and able to compete globally.

The question is no longer if CO₂ should be captured, but rather: how to scale up quickly enough? Here is what to expect on carbon capture in the coming period:

• The European Emissions Trading System (EU ETS) Reform, published on 17 July, aims to stabilise the carbon market and proposes integrating EU carbon removals into the system.
• The upcoming legislative proposal (Q3 2026) specifically aimed at developing CO₂ transport infrastructure and a well-functioning CO₂ transport market. The goal is to create a clear EU framework for how CO₂ networks are planned, permitted, accessed and governed, and (crucially) to send the market and investment signals needed to link emitters with storage sites across borders.
• A broader update of Energy Union and Climate Action governance (planned Q4 2026).

What do carbon capture initiatives mean for your business?

The Clean Industrial Deal and national developments make it clear that the technology has momentum. Still, the investment climate is not fully there yet. The actions planned for 2026 should help address issues in project rollout.

Want to know more about what the EU legislative framework on carbon capture might mean for your organisation? Fill out the form below and our team will get in touch with you.