Wood Mackenzie warns-EU Carbon Storage Targets face major shortfall

Independent analysis reveals regulatory and economic barriers could leave the EU 40% below 2030 underground carbon storage targets.

The European Union’s ambitious carbon storage targets under the Net Zero Industry Act (NZIA) are unlikely to be met, according to new research from Wood Mackenzie. 

The study, commissioned by ExxonMobil, OMV Petrom, Shell, and TotalEnergies, but conducted independently, finds that Europe’s available CO2 injection capacity by 2030 will reach only 28.5 million tons per year, well below the NZIA’s 50 million ton goal.

Wood Mackenzie’s analysis highlights mounting delays, permitting challenges, and weak investment signals, all of which threaten to slow the scale-up of carbon capture and storage (CCS) across the continent. 

“The EU’s carbon storage ambitions are colliding with commercial and technical realities,” said Jon Story, Vice President of Energy Consulting and Head of CCS Consulting at Wood Mackenzie. 

“With project delays averaging over 1.5 years and EU carbon prices still well below CCS costs/tonne for capture projects, we’re seeing policy running ahead of market fundamentals and what the industry can deliver.”

Eight-Year Timelines, Slow Licensing, and Economic Friction

The report finds that European storage projects require roughly eight years to progress from exploration to operation, meaning that only projects licensed by 2023 have a chance of contributing to the 2030 target. 

As of now, just 15.6 million tons per year of capacity is far enough along to be operational by the deadline.

Regulatory hurdles compound the challenge. Despite strong policy signals, licensing has lagged: only two CO2 storage permits have been awarded in the Netherlands, the EU’s most advanced CCS jurisdiction, while Italy remains the only member state with a pilot storage facility. 

Flagship projects like Porthos and Aramis continue to face legal objections and procedural delays. Economically, ETS carbon prices, averaging $70 per ton in 2024, remain well below the levelized cost of capture, weakening project bankability. 

Many proposed facilities are also distant from storage sites, adding infrastructure costs that further erode feasibility.

Wood Mackenzie concludes that, given the extended development cycles and funding gaps, the NZIA’s 2030 carbon storage target will likely need reassessment in the European Commission’s scheduled 2028 review.

source: carbon herald