CCS – why, what for and how much?

CO₂ is captured from the air or during industrial processes. It is then transported in compressed form by ship, train or pipeline to suitable storage sites. Ultimately, this greenhouse gas is stored long-term in geological formations, either beneath the sea or on land — for example, in saline aquifers or depleted gas fields. Additionally, CO₂ can be used as a raw material in processes such as the production of synthetic fuels. The capture, transport and safe storage of carbon dioxide, as well as its utilisation — also known as carbon capture and storage (CCS) and carbon capture and utilisation (CCU) — are intended to support the transition to climate neutrality. Oeko-Institut is working to determine what role these technologies could play in achieving effective and affordable climate protection in Germany.

Should we even be doing this? Doesn’t it make more sense to prevent emissions rather than making them disappear somewhere underground? CCS is the subject of heated debate – because of the costs and the risk that the technology might hinder necessary climate protection efforts, but also because of potential environmental impacts (for more on this, see ‘Under the North Sea?’ on page 8). “In Germany, we will have no choice but to use CCS on the path to climate neutrality. After all, it is not possible to prevent all emissions. Oeko-Institut’s climate scenarios therefore also incorporate CCS,” says Christoph Heinemann, Senior Researcher in the Energy & Climate Division. “Using it for certain applications makes perfect sense, such as in the cement and lime industries and in waste management. However, this should be done without jeopardising emission reductions and should certainly not be used for applications where renewable energies or green hydrogen can be used.”

Capacities and market ramp-up

However, before CCS becomes commercially viable in Europe, not only are carbon storage capacities and a transport infrastructure required, but also appropriate financial and regulatory frameworks. In the study titled ‘Deploying carbon capture and storage (CCS) for climate neutrality’ by Oeko-Institut and Agora Industry, the experts examine the capacities of existing and planned European offshore carbon storage projects and the associated costs. “In addition, we have analysed the various transport options and developed recommendations for policymakers on how they can establish the appropriate framework conditions for a rapid and efficient market ramp-up,” adds Roman Mendelevitch, a Senior Researcher in the Energy & Climate Division.

CO₂ in the North Sea

Taken together, the planned CCS projects show that the North Sea region is set to become the centre of carbon storage in Europe – with Denmark, Norway and the Netherlands being particularly active in this area. “The geology beneath the North Sea has been well explored due to decades of oil and gas extraction; also, the Mediterranean region offers poorer geological conditions and there are potential risks of underground faults,” said Heinemann. The UK is a clear frontrunner: 40 percent of the storage capacity planned in Europe by 2030 stems from projects in that country. Overall, scientists currently expect existing CCS projects in the EU and Norway to achieve an annual storage capacity of just ten million tonnes of CO₂ by the early 2030s, however. “If the storage requirements of the entire EU are to be met by 2050, we would need to add two large-scale storage hubs each year, each with an injection capacity of five million tonnes per year,” says Heinemann. In addition, the experts have examined the necessary transport infrastructure – CO₂ can be transported by pipeline, train or ship. “Particularly when it comes to establishing a pipeline infrastructure, but also when selecting a suitable transport option for a specific site, very forward-looking planning is required, as there are significant differences in terms of flexibility and costs. It is therefore important to have clarity as early as possible regarding sites, the volumes to be transported and the timing of their production.”

A reliable framework

To accelerate the ramp-up, the German government must create a reliable regulatory framework. While it has established the legal basis for the commercial use of CCS across the country through the amended Carbon Dioxide Storage and Transport Act, which came into force at the end of 2025, there is still a lack of an industrial policy strategy for its targeted implementation. “An integrated approach is needed which ensures legal compliance as well as establishing market foundations and initiating market ramp-up.” The necessary legal regulations are either already in place or can be implemented very quickly; however, there is still a great deal to be done with a view to market foundations and ramp-up. “What is needed is a robust carbon price, as well as planning and financial measures to ramp up capture, transport and storage. In the medium term, for emission-intensive companies that are already covered by the European Union Emissions Trading System (EU ETS) and wish to use CCS as an emission-abatement technology, the carbon price alone is not sufficient to make the technology attractive. Subsidies make sense here.” Government guarantees for pipeline infrastructure could become necessary to cushion the risk of default by anchor customers in the transport network.

More expensive than expected

But just how big is the cost gap? “CCS is more expensive than many people think,” states Heinemann. “We expect costs of between 150 and 300 Euro per tonne – whereas the carbon price in the EU ETS currently stands at only around 85 Euro. For the market to take off, this cost gap must be closed.” Investments in CCS are thus not yet economically viable. “The construction of carbon storage sites beneath the seabed takes between six and 13 years, and the capacity can only be increased slowly.” Experience gathered in the hydrogen sector has also highlighted the challenges posed by entirely new value chains – their complexity, their uncertainties and their costs.

Should we even be doing this? Yes, says the expert from Oeko-Institut. And Europe is also taking further steps on the issue of CCS. The European Commission has announced a far-reaching CO₂ infrastructure package for autumn 2026. “This is intended to establish the legal framework for, among other things, cross-border networks,” says Heinemann. “With this in mind, it is time for the German government to present a long-term strategy here at home as well, and to back it up with appropriate measures.”

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Christoph Heinemann studied geography, economic policy and business administration. He has been working at Oeko-Institut in the Energy & Climate Division since 2011. His work focuses on, among other things, modelling the future energy system, the effects of storage and flexibility in the electricity system, and the use of hydrogen and its derivatives.