Understanding CCS in the EU

Information correct as of September 2025

• Market overview - EU
• Development and support regime - EU
• Opportunities and Challenges - EU
• Market overview - The Netherlands
• Regulatory framework - The Netherlands
• Focus on the Aramis project - The Netherlands
• Development and support regime - The Netherlands
• Opportunities and challenges - The Netherlands
• Market overview - Germany
• Development and support regime - Germany
• Opportunities and challenges - Germany

Market overview - EU

Policy overview and targets

The EU aims to significantly reduce greenhouse gas emissions, targeting a 55 percent reduction by 2030 compared to 1990, and climate neutrality by 2050. However, not all CO₂ emissions can be avoided, particularly due to certain production processes and (current) lack of emissions-free technologies (so called hard-to-abate emissions). Also, in some cases, the costs of CO₂ emission reductions are not economically feasible. In such cases, one alternative could be to capture CO₂ and then geologically store (Carbon Capture and Storage - CCS) or reuse it (Carbon Capture and Utilisation - CCU):

• CCS refers to the capture and permanent storage of CO₂. In the first step, CO₂ is captured from industrial processes and then, in a second step, transported to a suitable location by pipeline or in tanks, where it is permanently stored.
• CCU refers to the capture and subsequent use of CO₂. This technology has a wide range of applications, as CO₂ is needed as a raw material in various industries, e.g. in greenhouses, as a solvent in the oil industry or for the production of chemical products in the beverage industry.

The European Union's policy on CCU and CCS is rooted in its broader climate goals, particularly the European Green Deal. In 2020, the EU launched the CCUS Implementation Plan, which was in November 2024. This plan outlines key actions to scale up CCU/CCS deployment across Europe, including the development of at least 15 commercial-scale CCS projects, 10 CCU projects for clean energy and a network of cross-border CO₂ transport infrastructure. It also encourages Member States to create national roadmaps and assess geological storage potential. Together, these efforts aim to establish a functioning internal market for CO₂ and accelerate the transition to a low-carbon economy. As a basis for the future legal framework for CCS and CCU, the EU published the Industrial Carbon Management Strategyin February 2024.¹ It aims for ambitious targets: 280 million tonnes of CO₂ is to be captured (storage and utilization) by 2040 and 450 million tonnes CO₂ by 2050. To achieve this goal, the Commission intends to:

• initiate preparatory work in view of a proposal for a possible future CO₂ transport regulatory package,
• work towards proposing an EU-wide CO₂ transport infrastructure planning mechanism,
• consider, in close engagement with industry, nominating European coordinators to support the early development of (cross-border) infrastructure projects,
• draw up a coherent framework to account for all industrial carbon management activities that accurately reflect the climate benefits across their value chains.

The Industrial Carbon Management Strategy provides for the initiation of preparatory work for a possible future CO₂ transport regulatory package. The implementation of such a scheme will require a joint effort by the EU and its Member States.

Regulatory Framework overview

The 1996 Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (London Protocol) prohibits State Parties from exporting waste or other materials to other countries for dumping at sea. This protocol currently limits the ability to export CO₂ to other countries that have geological storage capacity at sea. However, a 2009 amendment to the London Protocol allows Parties to agree to derogate from the export ban through bilateral or multilateral agreements. The European Commission (EC) argues that the European Union (EU) secondary legislation, as described below, constitutes such an agreement.

Storage and transport of CO₂ are regulated by the CCS Directive.² Under the CCS Directive, together with its guidance documents, each Member State is free to decide whether it wishes to allow CO₂ storage on their territory. However, if a Member State does decide to use CCS, it must comply with the legal framework for authorisation set out in the CCS Directive. This includes:

• conditions for storage permits (including that all relevant requirements under EU law are met and that the operator is financially sound and technically competent),
• imposing operation, closure and post closure obligations (such as Monitoring, Reporting and Inspections) and allowing third-party-access.

The capture process itself, on the other hand, falls within the scope of the Industrial Emissions Directive (IED), which does not include specific requirements for CCS/CCU capture facilities.³

Recently, the EU also agreed the terms of the Carbon Removals and Carbon Farming Regulation, which was published in the EU's Official Journal on December 6, 2024.⁴ This Regulation creates an EU-wide voluntary framework for the certification of carbon removals, carbon farming and carbon storage in products across Europe. The aim is to ensure that carbon removals and farming are transparent and trustworthy, preventing greenwashing and creating new business opportunities. Compliance with the quality criteria is to be checked by an independent and recognised certification body. An EU registry will be established within four years. The Regulation will likely play a key role in the further development of voluntary carbon markets.

Development and support regime - EU

There are various programmes and incentives at an EU level which provide support for CCS and CCU projects:

• Companies can benefit from the EU Innovation Fundby securing financial support for the development and deployment of innovative CCS and CCU technologies. The fund, financed through revenues from the EU Emissions Trading System (EU ETS), is one of the world's largest programs for low-carbon innovation, with around €10 billion being made available between 2020 and 2030.
• Companies can also benefit from the EU's Just Transition Fund(JTF) by accessing financial support for CCUS-related activities in regions most affected by the shift away from fossil fuels. The fund supports the transformation of carbon-intensive industries, including investments in clean technologies like CCUS, provided these projects align with the region's Territorial Just Transition Plan (TJTP).
• Pursuant to the EU ETS Directive, if CO₂ is successfully captured and stored, emission certificates under the EU ETS do not have to be surrendered.⁵ As the total number of certificates is reduced each year, their market price will presumably increase. Therefore, CCS could be an effective measure to avoid such cost increase. This privileged treatment is intended to incentivise investment in CCS. As regards CCU, the utilization technology is regulated in the Renewable Energy Directive which promotes, among others, fuels produced from captured CO₂.⁶
• Besides the CCS Directive and the Renewable Energy Directive, the Net-Zero Industry Act aims to enhance European manufacturing capacity for net-zero technologies and their key components, including CCS, addressing barriers to scaling up production in Europe.⁷
• The TEN-ERegulation facilitates investments in cross-border energy infrastructure. Its objective is to connect the energy infrastructure of member states by defining priority corridors and thematic areas, and funding collaborative projects.⁸

Opportunities and Challenges - EU

While CCS and CCU have the potential to significantly advance the EU's goal of achieving its climate targets, one of the most significant challenges continues to be the regulatory fragmentation between member states. Permitting procedures, liability rules, and CO₂ accounting standards vary, creating uncertainty and administrative burdens for project developers. Infrastructure gaps also pose a major barrier, as many regions lack mature CO₂ transport networks and certified geological storage sites.

Moreover, the high capital costs associated with CCU and CCS projects, combined with uncertain long-term revenue models, make it difficult to attract sufficient private investment. Public awareness and acceptance of CO₂ storage remains limited, and concerns about safety can delay or obstruct project implementation., Whilst the EU has made progress in establishing a regulatory framework, further harmonization is needed to ensure interoperability, reduce investment risk and build investor confidence.

Market overview - The Netherlands

CCS is expected to play a crucial role in achieving the Netherlands' ambition of net zero emissions by 2050 and is prioritised over CCU. According to a recent report by the Netherlands Environmental Assessment Agency (Planbureau voor de Leefomgeving) increasing CCS capacity is indispensable to achieving net zero.⁹ Additionally, CCS is essential for achieving negative emissions to offset residual emissions.

The Netherlands has significant CO₂ storage capacity offshore, with depleted gas fields providing a potential capacity of 1700 Mt CO2. Although no specific national targets have been set for CO₂ capture and storage, the country has initiated large-scale projects, such as Porthos and Aramis. The main sectors targeted for CCS are energy-intensive industries such as refineries, cement, chemical production and the steel industry. For these industries, CCS provides a short term solution to reduce their carbon emissions, as achieving carbon neutrality by transforming their industrial processes remains a significant challenge.¹⁰

Regulatory framework - The Netherlands

In the Netherlands, CCS is regulated by two complementary legal frameworks: the Mining Act (Mijnbouwwet) and the Environmental Act (Omgevingswet). The Mining Act focuses on certain activities regardless of their environmental impact, while the Environmental Act focuses on activities with substantial environmental impacts, requiring an environmental permit and an Environmental Impact Assessment (EIA) before they can proceed. The capture, use, transport and storage of CO₂ are therefore all governed by the Environmental Act.

The storage of CO₂, as well as the exploration of suitable underground deposits, requires a permit from the Ministry of Climate Policy and Green Growth (Ministerie van Klimaat en Groene Groei) under the Mining Act. When deciding whether to grant a permit, the Minister will take into account, inter alia, the applicant's technical and financial capacity, the safety of inhabitants of the surrounding area and national security. The permit may include conditions that the CO₂ storage site must meet regarding the manner, depth and area in which CO₂ will be stored, as well as other obligations necessary to protect the interests of the inhabitants and infrastructure of the surrounding area, national security, management of natural resources and opportunities for the storage of other materials. The Mining Act distinguishes between the temporary and permanent storage of CO₂, with the latter subject to additional requirements.¹¹

Permit holders for temporary CO₂ storage are required to take all reasonable measures to prevent any adverse effects on humans, the environment, safety or the public interest in planned natural resource management. They must also submit a storage plan to the Minister for approval, detailing the expected storage capacity, duration, manner of storage, annual costs, anticipated ground movements and risks for the inhabitants, infrastructure and buildings in the surrounding area. Permanent CO₂ storage permits not only include these requirements but also impose additional obligations that must be met. The Minister is required to submit all permit applications to the EC for its non-binding advice. Once granted, the permit will specify, inter alia, the timeframe and location for CO₂ injection, the maximum permissible amount of CO₂ to be stored, the monitoring and risk management measures to be implemented, the corrective measures required in case of leakage and the amount of financial security that the potential storage operator must provide to fulfil its permit obligations. Any modifications to the storage complex made after the permit has been granted must be reported to the Minister. The Minister may revoke the permit in cases of recurring leaks or other irregularities, non-compliance with permit conditions - particularly those concerning financial security - or where scientific findings or advancements necessitate such action. Following the issuance of a permit for permanent CO₂ storage, the permit holder is obliged to monitor and document the amounts and types of CO₂ injected and stored, as well as any leaks, and to submit an annual report to the Minister. Additionally, the permit holder must establish reasonable, transparent and non-discriminatory criteria for granting access to its storage sites. The permit will outline the detailed requirements. Once these have been met, the permit holder must prepare a closure plan for approval by the Minister. Following approval, the permit holder is required to seal off the CO₂ storage deposit and remove any injection sites or other equipment left on the surface.¹²

The operation of pipelines transporting hazardous substances is considered an environmentally harmful activity and is therefore subject to the permit system under the Environmental Act. The transportation of CO₂ is explicitly classified as a hazardous substance when the pipelines meet certain specifications regarding dimensions and pressure. Additionally, the transport of CO₂ is governed by the Mining Act, which requires operators of CO₂ transport networks to provide access to their network on reasonable, transparent and non-discriminatory terms. The competent supervisory authorities for CCS in the Netherlands are the Authority for Consumers and Markets (ACM), the State Supervision for the Mines (SODM) and the Minister. The SODM is responsible for overseeing the safety of CO2 transport and storage, insofar as it involves transport by pipelines that are part of mining operations and for ensuring non-discriminatory access for third parties as required by the Carbon Storage Directive.¹³

Focus on the Aramis project - The Netherlands

Major steps need to be taken to meet the 2030 CO₂ reduction targets outlined in the Dutch Climate Agreement and the EU's Green Deal. As an integral part of the energy transition, the Aramis CCS-project aims to support industries that face challenges in reducing their CO₂ emissions, such as steel, chemicals, cement, refineries and waste incinerators.

The Aramis project, originally a collaboration between TotalEnergies, Shell, Energie Beheer Nederland (EBN) and Gasunie, is designed to deliver essential CO₂transport infrastructure and storage facilities. Shell and TotalEnergies have since withdrawn from the construction of the infrastructure and have transferred this responsibility to the public partners EBN and Gasunie but they remain involved as storage provider of CO₂. This shift is intended to create a model with a public grid/network manager, similar to the gas and electricity market. The project is currently in the design phase.¹⁴ A Final Investment Decision (FID) is expected in 2026. If this decision is not taken, Aramis will not become operational before late 2030 or early 2031, meaning it will not contribute to the 2030 CO₂ reduction targets. According to the Minister, the absence of an FID could also trigger a domino effect, delaying investment decisions by other stakeholders in the value chain, including emitters.¹⁵

The Dutch government has allocated EUR 412 million to mitigate the so-called volume risk (vollooprisico) of Aramis and the associated CO₂ next terminal, and EUR 639.2 million for a capital injection into EBN. These funds are intended to enable a positive FID by 2026, allowing Aramis to become operational by 2030. An additional EUR 45 million has been made available for further CCS research.¹⁶

The Aramis project contemplates an open-access CO₂ pipeline with a capacity of 22 million tonnes per year and aims to be operational by the end of this decade.¹⁷ The captured CO₂ will be transported via pipelines or ships to the collection hub on the Maasvlakte, which consists of the CO₂next terminal and a compressor station. The Aramis project aims to use compression services from the Porthos project. The CO₂next terminal will receive liquid CO₂ via vessels, temporarily store and pressurise it before sending it out for transport via sea pipeline. The compressor station receives CO₂ supplied by land pipeline and pressurises it for transport via sea pipeline. From the collection hub, the CO₂ will be transported via an offshore pipeline to the offshore distribution platform or earlier branches on the North Sea. The pipeline will be designed to allow for additional industrial customers and storage fields to be added incrementally in the future. Via the distribution platform and spurlines, the CO₂ is further transported to the injection platforms of the storage parties. The CO₂ will arrive at the platforms where it is injected by storage companies TotalEnergies, Shell, Eni Energy Netherlands and other storage parties via wells, into depleted gas fields to be permanently stored three to four kilometres under the seabed.¹⁸

The Aramis project collaborates with initiatives such as CO₂next (a joint venture between Gasunie, Vopak, Shell and TotalEnergies, which aims to develop an open-access storage terminal for liquid CO₂ in the port of Rotterdam) and Porthos (a CO₂ transport and storage project in the same port area, which is a partnership between EBN, Gasunie and the Port of Rotterdam Authority).¹⁹ Recognised as a Project of Common Interest (PCI), ^the EC therefore acknowledges that Aramis is a high-priority initiative for achieving an interconnected energy system infrastructure in the EU. The Aramis project will be ideally placed to transport CO₂ from nearby countries such as Belgium, Germany and France. The EC has granted a subsidy of EUR 124 million to the Aramis CCS project under the Connecting Europe Facility (CEF) programme. In the Netherlands, Aramis has also been designated as a project of national importance under the multi-year energy and climate infrastructure programme (Meerjarenprogramma Infrastructuur Energie en Klimaat, MIEK). ²⁰

The business case for Aramis is highly dependent on the supply of CO₂ from waste incineration plants (AVIs). To ensure a viable start, the project requires approximately 5 million tonnes of CO₂ in its first year. The government currently expects AVIs to supply between 1.5 and 2 million tonnes of CO₂ by 2030. Without investments by AVIs in CCS, a positive FID in 2026 is unlikely. The tightening of the CO₂ levy is expected to make CO₂ capture more financially attractive for AVIs.²¹

Development and support regime - The Netherlands

Making Dutch industry more sustainable is an urgent task. Achieving the set targets requires significant investment in the coming years. However, these investments will only materialize in an environment that is (financially) attractive and encourages companies to invest in the Netherlands. This investment climate is formed by a combination of stimulating and normative factors, including costs, pricing, subsidies, loans and market conditions. One such subsidy for clean technologies and fuels is the Stimulation of Sustainable Energy Production and Climate Transition Incentive Scheme (SDE++) (Stimulering Duurzame Energieproductie en Klimaattransitie). This scheme provides financial support to companies and non-profit organizations that produce renewable energy or achieve large-scale CO₂ reductions.²² Initially, the Dutch government intended to subsidize only domestic CO₂ storage under the SDE++. A key rationale for this restriction was to support the business case for two Dutch CO2 transport and storage projects: Aramis and CO₂next. Allowing Dutch industrial emitters to store their CO₂ in other European countries would increase the risk of underutilization of these domestic projects - referred to as the volume risk. However, this geographical restriction was found to be incompatible with EU state aid rules. As a result, companies are now eligible to receive SDE++ subsidies for CO₂ storage abroad. According to the Minister, the EC had threatened to block an extension of the SDE++ scheme if the restriction remained in place.²³

The primary goal of the SDE++ is to achieve cost-effective CO₂ reduction by using available funds to maximize CO₂ abatement. According to the Dutch Climate Agreement, subsidies for CCS should not come at the expense of the development of sustainable energy technologies. This means that CCS will only be subsidized if there are no cost-effective alternatives. An independent assessment is conducted annually to determine whether alternative measures with comparable cost-effectiveness exist. This process ensures that subsidizing CCS through the SDE++ remains justified. For now, CCS remains one of the most cost-effective methods for reducing CO₂ under the SDE++. Furthermore, it has been stipulated that no new SDE++ subsidies will be granted for fossil CCS projects after 2035.²⁴ This policy aims to promote cost-efficient CO₂ reductions in the short term while encouraging industrial parties to transition to alternative technologies in the long run.²⁵

Opportunities and challenges - The Netherlands

A key challenge for CCS is that in many places it still cannot function without subsidies. While the costs of capture, transport and storage may be limited in some cases, investments often depend on developments in the EU ETS price. For most CCS projects, an unprofitable outcome currently remains likely, meaning that necessary investments are unlikely to proceed without financial support, such as the SDE++. This reliance on subsidies presents a barrier to the large-scale implementation of CCS, particularly as the current EU ETS price is lower than the cost of avoiding one ton of CO₂.²⁶

It is expected that, in the long term, a well-functioning CCS market will exist, but currently such a market does not exist yet. CO₂ emitters in the Netherlands have limited options in the short term to significantly reduce their emissions and are therefore dependent on CCS, with Aramis being the only realistic option for transporting and storing captured CO₂. The Aramis project has an intended capacity of 22 Mt CO₂ per year, which is roughly equal to the total emissions reduction expected from the Dutch industry by 2030. This makes it inefficient to build a competing pipeline alongside Aramis for storages sites in the Netherlands.²⁷

A crucial phase in the process of establishing permanent geological storage of CO₂ is the closure of the storage sites once injection is complete. The Mining Act outlines the requirements for closure and the post-closure plan. Accordingly, the permit holder or operator must close the well in accordance with a closure plan, which has been approved by the competent authority. As a general rule, the permit holder or operator remains responsible for monitoring the well after closure and must take all necessary corrective measures if any leaks occur. This responsibility continues until the permit is revoked and the competent authority assumes responsibility for the permit area. The transfer of responsibility to the authorities can occur after a period of at least twenty years, provided that certain conditions are met. These include: the evidence supporting that the CO₂ is permanently stored, the storage site is permanently closed and the injection facilities have been decommissioned and the permit holder has provided sufficient financial contributions to cover the anticipated monitoring costs for at least thirty years. Once responsibility is transferred to the Dutch state, the (former) operator is, in principle, released from liability for any costs incurred thereafter, unless fault can be attributed to the operator. Although no CO₂ storage permits have been issued yet, it is too early to evaluate how this regime will operate in practice. However, industry stakeholders have already identified several challenges. One key challenge is the absence of clear criteria for determining when CO₂ is considered permanently stored, especially given the twenty-year period before a permit holder can transfer responsibility to the authorities. Another challenge is the considerable financial uncertainty surrounding the anticipated costs for monitoring and any potential correctives measures. In the event of any leakage, the permit holder or operator must purchase as many EU ETS allowances as necessary to cover the volume of leaked CO₂. However, it is currently impossible to accurately assess the long-term costs of these allowances, which creates significant uncertainty that may need to be addressed to support the development of CO₂ storage.²⁸

Market overview - Germany

Policy overview and targets

The German regulatory landscape for CCUS is evolving quickly. While current legislation only allows for research, testing and demonstration of technologies for the permanent storage of carbon dioxide, the German government that took office after elections in February 2025 is currently working on a much more enabling approach. The coalition agreement (Koalitionsvertrag) of the newly elected German government explicitly acknowledges the importance of CCS and CCU as essential tools for achieving the country's climate neutrality target by 2045. It emphasizes that CCS and CCU are indispensable for decarbonizing energy-intensive industries such as cement, steel, lime, and glass, where process-related emissions are difficult or impossible to avoid. The coalition agreement outlines the intention to quickly implement a legislative package to enable the industrial-scale deployment of these technologies. Overall, the coalition agreement opens the door for cross-sector investment in CCS and CCU and laying the groundwork for a more comprehensive legal and regulatory framework to follow.

Regulatory Framework overview

Under the current legal framework, capture of CO₂, its transport and storage and its utilisation are governed by as follows:

(a) Capture

Under German law, plants that capture carbon dioxide require permission in accordance with the requirements of the Federal Immission Control Act (Bundes-Immissionsschutzgesetz - BImSchG). Pursuant to Section 13 of the BImSchG, the BImSchG-permit includes other permits, such as building permits, with some exceptions. Notably, if a plant is considered to be an experimental facility (Versuchsanlage), the permitting process may be simplified if certain requirements are met. However, in these cases, approval is only granted for three years, with the option of a one-year extension.

(b) Transport and storage

Meanwhile, the Carbon Dioxide Storage Act (Kohlendioxid-Speicherungsgesetz - KSpG) regulates the transportation and storage of carbon dioxide. With the KSpG, the German legislator has implemented the requirements of the EU CCS Directive. However, in its current form, the KSpG is limited to research, testing and demonstration of technologies for the permanent storage of carbon dioxide in underground rock strata. There are several reasons why the KSpG in its current form does not allow for large-scale storage of CO₂. Most importantly, the deadline for applications expired in 2016. In addition, the permissible storage volumes are limited to 1.3 million tons of CO₂ per storage site per year and four million tons per year in total. Under the KSpG in its current version, for the permission of pipelines for CCS, a complex and time-consuming planning approval procedure (Planfeststellungsverfahren) is required. In accordance with its concept, the KSpG requires a regular evaluation and is designed to be further developed.

(c) Utilisation

There is currently no specific legal framework for the use of captured CO₂ Emissions in Germany. Depending on the context, captured CO₂ Emissions may fall under the legal regime of waste, waste gas or products. For example, if captured CO₂ Emissions are to be used for the production of Renewable Fuels of Non-Biological Origin (RFNBO), it falls under the RED III Directive, which has yet to be fully transposed into national law.

Development and support regime - Germany

Projects in Germany can be subsidised by the multiple EU programmes. Under German law, projects can be supported in the following ways:

• In line with the key points of the Carbon Management Strategy (see above), funding is available for CCS and CCU investment and innovation projects under the Federal Funding Policy for Industry and Climate Action(Bundesförderung Industrie und Klimaschutz - BIK). Funding is limited to CO₂ emissions that are difficult to avoid. In the first funding round, investment projects in the lime, cement and thermal waste treatment sectors were eligible for funding; innovation projects in the basic chemicals, glass and ceramics sectors were also eligible. Investment projects were eligible for funding of up to 30 million euros; industrial research projects can receive up to 35 million euros. As far as we know, further funding rounds are currently being planned.
• While not yet fully implemented, Germany is exploring Carbon Contracts for Difference(CCfDs) as a mechanism to guarantee a stable carbon price for low-carbon technologies, including CCS. This would help de-risk investments by covering the gap between actual costs and carbon market revenues.

Opportunities and challenges - Germany

While CCS and CCU offers promising opportunities with respect to Germany's ambitious net zero targets, one of the most pressing issues is the current regulatory framework, as described above. This effectively halted domestic CCS development. Another major challenge is the lack of domestic CO₂ storage infrastructure. Apart from a small research site in Brandenburg, Germany currently has no operational CO₂ storage facilities. The permitting process for new storage sites is expected to take 7-10 years, far longer than the 18-month target set by the EU's Net-Zero Industry Act. This delay could significantly hinder the timely deployment of CCS technologies. Public perception and political sensitivity also remain obstacles. CCS has long been controversial in Germany due to environmental and safety concerns, particularly regarding onshore storage. Although political attitudes are shifting, public acceptance will be crucial for broader deployment.

Footnotes