Europe launches its CO2 Storage Market

Share:

ue

Comprehensive energy news coverage, updated nonstop

Annual subscription

8.25€/month*

*billed annually at 99€/year for the first year then 149,00€/year ​

Unlimited access • Archives included • Professional invoice

OTHER ACCESS OPTIONS

Monthly subscription

Unlimited access • Archives included

5.2€/month*
then 14.90€ per month thereafter

FREE ACCOUNT

3 articles offered per month

FREE

*Prices are excluding VAT, which may vary depending on your location or professional status

Since 2021: 35,000 articles • 150+ analyses per week

In Europe, while the 2010s were marked by a handful of anecdotal projects, the 2020s seem to bring a breath of fresh air.

Over the past 2 years, the deployment of CO2 capture, storage and reuse (CCUS) technologies has seen phenomenal growth.

Europe develops more than 76 projects

In Europe, 76 projects are active across 16 EuropeanUnion countries. As it stands, the old continent will be capable of storing over 50 million tonnes of CO2 (MtCO2) per year by 2030. A boom that began in the midst of the pandemic.

Numerous cooperative ventures are underway between governments and industry to make legislation more attractive in this field. Today, the Netherlands, the UK and Norway are the European leaders in this field.

European energy policy

Norway in the lead

Norway, in particular, is the driving force behind the Nothern lights project throughout Europe. A government initiative to create a complete supply chain for CO2 capture and storage.

Eventually, industrial companies will be able to sequester their carbon emissions in the Norwegian seabed via the deployed network. This project, in which TotalEnergies and Shell are participating, was approved by the Norwegian parliament on December 15, 2021, and will be operational in 2024.

For many experts, Nothern Lights is the beginning of a major step in decarbonization.

Enabling environment for CO2 storage

There are many reasons for this craze in Europe. For states, this is a further step towards neutrality. For manufacturers, it’s an innovation to decarbonize sectors where electrical technologies are currently unsuitable.

Leading steelmaker Arcelor Mittal, for example, is at the forefront of these issues. Its Dunkirk site plans to develop a capture capacity of 10MtCO2/year by 2035. And with a storage cost of €30 per tonne.

CCUS makes decarbonated hydrogen possible

The driving force behind storage development is the hydrogen sector. The development of hydrogen technologies is currently the most dynamic area of energy transition in Europe. The promise of a return equivalent to emission-free hydrocarbons motivates private and public investors.

However, large-scale production will inevitably go through a CO2-emitting transitional phase. Capturing these emissions is therefore essential if we are to remain consistent with Europe’s environmental constraints.

There is therefore a real synergy between hydrogen and CO2 capture to support the decarbonization of economies. In Europe’s current transition strategy, one is essential without the other.

Consequently, the current hydrogen boom will inevitably be accompanied by a boom in CCUS techniques. These make it possible to produce carbon-free hydrogen from natural gas by capturing and storing carbon emissions.

But many regulatory and financial barriers

But if Europe is called upon to get involved, it’s because of the many financial barriers. Indeed, setting up this value chain still requires considerable initial development.

Technologies are still far from optimal. Substantial infrastructure is required, and regulatory hurdles remain. At present, only governments and the European Innovation Fund provide support for industry. Which is still not enough.

What’s more, the nature of projects and funding in Europe is highly heterogeneous. The EU’s objective is therefore to harmonize and create a favorable environment to encourage investment.

Target 50 million tonnes of CO2 captured and stored per year

The first step announced this week by the Union is the creation of a certification and control system for absorption systems. At the same time, global targets of 50MtCO2 captured per year will be imposed in Europe from 2030.

Eventually, stored emissions could be integrated into carbon credit markets to finance capture projects. This system is particularly interesting for the agricultural sector and other industries that are difficult to decarbonize without CO2 capture.

While the first drafts of European regulations may seem modest, these measures are set to give a major boost to the sector in the years ahead.

Criticism and uncertainty

While this policy gives us hope that carbon capture and recycling systems will become commonplace, some critics see it as a form of hypocrisy. Some associations fear that this incentive to store carbon will undermine the policy of reducing emissions.

What’s more, the integration of stored carbon into financial markets could lead to counterproductive speculative practices. This incentive to stockpile could slow down the transition of industries already lagging behind in their ecological transformation.

But for the EU, these provisions are primarily aimed at emancipating capture and storage technologies. This will reduce the financial barriers to research, infrastructure and operational management.

The price of nature-based carbon credits dropped to $13.30/mtCO2e in October as a 94% surge in September issuances far outpaced corporate demand.
Driven by the energy, heavy industry and power generation sectors, the global carbon capture and storage market could reach $6.6bn by 2034, supported by an annual growth rate of 5.8%.
Article 6 converts carbon credits into a compliance asset, driven by sovereign purchases, domestic markets, and sectoral schemes, with annual demand projected above 700 Mt and supply constrained by timelines, levies, and CA requirements.
The GOCO2 project enters public consultation with six industrial players united around a 375 km network aiming to capture, transport and export 2.2 million tonnes of CO2 per year starting in 2031.
TotalEnergies reduced its stake in the Bifrost CO2 storage project in Denmark, bringing in CarbonVault as an industrial partner and future client of the offshore site located in the North Sea.
The United Kingdom is launching the construction of two industrial carbon capture projects, backed by £9.4bn ($11.47bn) in public funding, with 500 skilled jobs created in the north of the country.
Frontier Infrastructure, in partnership with Gevo and Verity, rolls out an integrated solution combining rail transport, permanent sequestration, and digital CO₂ tracking, targeting over 200 ethanol production sites in North America.
geoLOGIC and Carbon Management Canada launch a free online technical certificate to support industrial sectors involved in carbon capture and storage technologies.
AtmosClear has chosen ExxonMobil to handle the transport and storage of 680,000 tonnes of CO₂ per year from its future biomass energy site at the Port of Baton Rouge, United States.
The Dutch start-up secures €6.8mn to industrialise a DAC electrolyser coupled with hydrogen, targeting sub-$100 per tonne capture and a €1.8mn European grant.
Japan Petroleum Exploration is preparing two offshore exploratory drillings near Hokkaidō to assess the feasibility of CO₂ storage as part of the Tomakomai CCS project.
The Singaporean government has signed a contract to purchase 2.17 million mtCO2e of carbon credits from REDD+, reforestation and grassland restoration projects, with deliveries scheduled between 2026 and 2030.
The Canadian government is funding three companies specialising in CO2 capture and utilisation, as part of a strategy to develop local technologies with high industrial value.
European carbon allowance prices reached a six-month high, driven by industrial compliance buying ahead of the deadline and rising natural gas costs.
Zefiro Methane Corp. completed the delivery of carbon credits to EDF Trading, validating a pre-sale agreement and marking its first revenues from the voluntary carbon market.
Hanwha Power Systems has signed a contract to supply mechanical vapour recompression compressors for a European combined-cycle power plant integrating carbon capture and storage.
A prudent limit of 1,460 GtCO2 for geologic storage reshapes the split between industrial abatement and net removals, with oil-scale injection needs and an onshore/offshore distribution that will define logistics, costs and liabilities.
Frontier Infrastructure Holdings drilled a 5,618-metre well in Wyoming, setting a national record and strengthening the Sweetwater Carbon Storage Hub’s potential for industrial carbon dioxide storage.
The Northern Lights project has injected its first volume of CO2 under the North Sea, marking an industrial milestone for carbon transport and storage in Europe.
Verra and S&P Global Commodity Insights join forces to build a next-generation registry aimed at strengthening carbon market integration and enhancing transaction transparency.

All the latest energy news, all the time

Annual subscription

8.25€/month*

*billed annually at 99€/year for the first year then 149,00€/year ​

Unlimited access - Archives included - Pro invoice

Monthly subscription

Unlimited access • Archives included

5.2€/month*
then 14.90€ per month thereafter

*Prices shown are exclusive of VAT, which may vary according to your location or professional status.

Since 2021: 30,000 articles - +150 analyses/week.