Europe’s plan to square climate ambition with industrial competitiveness is running into a familiar obstacle: projects are not getting financed fast enough. A new analysis from Carbon Capture and Storage Association (CCSA), developed with Deloitte, warns that slow progress on carbon capture, utilization and storage could leave the EU exposed on two fronts: missing climate targets while losing heavy industry to faster-moving jurisdictions.
The European Commission estimates the bloc will need to capture hundreds of millions of tons of CO2 each year by mid-century to stay on track with its long-term climate goals.
Today, however, Europe’s operational storage capacity remains marginal, while the build-out of transport networks and injection sites is lagging behind policy ambition, the report shows.
With the Net Zero Industry Act setting near-term targets for CO2 storage capacity by 2030, the window for first-of-a-kind projects to reach final investment decision is narrowing quickly.
Bankability is now the choke point
Developers are not short of project concepts; Europe is awash with capture proposals tied to steel, cement, chemicals and waste-to-energy facilities. The bottleneck is commercial structure.
Fragmented national rules, unclear allocation of long-term storage liability, and slow-moving permitting for shared pipelines and terminals have combined to freeze capital at the sidelines.
The report argues that CCUS must be treated as a single system spanning capture, transport and storage; weakness in any link undermines the whole investment case.
Signals from more advanced markets underline the competitive risk. In the UK, developers have openly warned they will redirect CCUS capital abroad if policy uncertainty persists. The same dynamic could play out inside the EU, particularly as the bloc has now locked in its 2040 emissions target under the European Union’s climate law, compressing timelines for delivery.
Relevant: CCSA: Policy Uncertainty Threatens UK’s Largest-Ever Carbon Capture Buildout
To break the deadlock, the authors lay out a phased set of “no-regret” actions aimed at de-risking early projects while building toward a self-sustaining market.
The endgame is dense industrial hubs linked by cross-border CO2 corridors, with demand-side incentives eventually replacing subsidies as the main driver of investment.
Without rapid coordination between Brussels and member states on funding, regulation and shared infrastructure, the report cautions that Europe’s CCUS strategy risks becoming a case study in ambition outpacing execution.
Read more: Marsh Report Flags Policy Gaps That Could Undermine European CCS Funding