Europe’s carbon capture ambitions are shifting from individual technology projects toward integrated industrial systems built around shared transport, storage infrastructure and long-term contracts. While technical questions about capturing, compressing and permanently storing carbon dioxide remain important, the biggest obstacle to widespread deployment is increasingly commercial. Projects must determine who will pay the additional costs and who will assume risks involving volumes, infrastructure performance and long-term liability.
The European Union’s ambitions illustrate the scale of the challenge. Its Industrial Carbon Management Strategy targets at least 50 million tonnes of annual CO2 storage capacity by 2030, while modelling suggests around 280 million tonnes could need to be captured annually by 2040 and 450 million tonnes by 2050. Achieving these levels will require far more than individual demonstration projects. Europe needs standardized infrastructure, measurement systems, liability rules, transportation networks and customers willing to make long-term commitments.
Norway’s Northern Lights project demonstrates how the commercial structure of carbon capture could evolve. Rather than requiring every industrial emitter to construct its own transportation and storage system, Northern Lights allows companies to liquefy captured CO2, transport it by ship and purchase permanent storage as a service. Its first phase provides 1.5 million tonnes of annual capacity and received its first CO2 from Heidelberg Materials’ Brevik cement plant in 2025. Expansion plans aim to increase capacity to at least 5 million tonnes annually from 2028. Although relatively small compared with Europe’s future requirements, Northern Lights demonstrates how shared infrastructure and standardized contracts can make projects easier to finance.
The United Kingdom is developing another model through industrial clusters connecting emitters with regulated transportation and storage networks. Different contracts are being designed for industries such as cement, power generation and waste-to-energy because their economics differ significantly. Government support can help close the gap between producing low-carbon products and conventional alternatives while reducing some infrastructure risks. However, these arrangements must avoid unnecessarily protecting companies from commercial risks or creating excessive long-term subsidies.
Carbon pricing through the EU Emissions Trading System also improves the economics of carbon capture, because permanently stored CO2 can reduce the need to purchase emissions allowances. Yet volatile carbon prices alone may not provide sufficient certainty for projects requiring decades of investment. Contracts must address what happens when pipelines or storage facilities are delayed, industrial facilities deliver less CO2 than expected, or infrastructure remains underused.
Industrial clusters could ultimately transform capture from an expensive environmental retrofit into shared regional infrastructure. Cement plants, chemical facilities, refineries, waste facilities and carbon-removal projects could use common transportation and storage networks, spreading costs among multiple customers.
However, capture should not automatically be applied to every industrial source. Electrification, renewable energy, efficiency improvements and material substitution may offer cheaper solutions in many sectors. Carbon capture is most compelling for difficult-to-eliminate residual emissions, particularly in industries such as cement and lime.
Europe has already demonstrated that capturing and permanently storing CO2 is technically possible. Its next challenge is commercial: creating contracts, infrastructure and markets that allow capture, transportation and storage to function as a single investable industrial service.