Carbon dioxide without borders: Connecting the UK and EU can create a more resilient and lower-cost CO2 storage network 

As Europe steps up efforts to deploy carbon capture and storage (CCS) and carbon dioxide removal (CDR) to meet its climate targets, there is increasing consensus that captured CO₂ will need to travel freely around the region. Not every industrial site will have access to suitable geology for CO₂ storage within its own country; some countries may have more storage capacity than emissions to store, and maximising the choice of storage sites available to each emitter can help drive down costs and reduce the impact of any one site being unavailable.  

But efforts to promote connectivity between CO₂ sources and sinks in the region currently face an inconvenient political reality: the UK’s exit from the European Union (EU) has meant that its huge potential storage capacity can no longer be used by CO₂ emissions from EU-based sources. Removing this barrier would be a major step towards accelerating decarbonisation in both jurisdictions. 

Europe’s looming storage imbalance 

Most EU Member States have promising geological potential for developing their own CO₂ storage, which would help lower the cost of decarbonisation for their heavy industries. The EU’s Net Zero Industry Act includes a groundbreaking obligation on oil and gas producers to contribute to 50 Mt per year of CO₂ injection capacity by 2030 in the EU alone, which should help improve access to storage. However, this resource is likely to remain highly localised around the North Sea in the near term – as shown in Clean Air Task Force’s storage tracker — thanks to the region’s well-studied geology, supportive policy environment, and existing offshore industries. Non-EU members the UK and Norway account for the vast majority (67%) of total capacity by 2030, with smaller contributions from Denmark and the Netherlands (21% combined). Only six of the 33 projects tracked are outside the North Sea, representing 11% of the projected capacity in 2030.  

The ETS issue and its impact on EU plans 

The benefit of carbon capture and storage for a decarbonising emitter derives from the fact that each tonne of CO₂ stored does not have to be paid for under the EU Emissions Trading System (ETS).¹ In other words, storing CO₂ permanently in suitable geology is treated the same as not emitting it. This is enshrined in law by the EU Directive on the ETS, which formally recognises storage sites that have been permitted under the 2009 ‘CO₂ Storage Directive.’ Although the UK’s own storage legislation was implemented under this 2009 directive, UK storage is no longer considered permitted within the scope of the EU legislation. 

As a result of this invisible barrier across the North Sea, EU plans for rapidly scaling CCS are largely ignoring the UK’s storage potential. Norway has similar storage resources and, although not an EU member, its participation in the European Economic Area (EEA) subjects it to the ETS and frees it from the same barriers as the UK. Without significant industrial CO₂ emissions of its own, developers of storage sites in Norway are actively looking to emitters in EU Member States to send them their CO₂. Fast catching up with Norway, Denmark also appears to have storage capacity beyond its own needs and is well placed to import CO₂ from emissions-intensive economies in North-West Europe and the Baltic. With these options at its disposal, does the EU even need access to the British side of the North Sea?  

The case for including the UK in Europe’s CO₂ storage network 

CATF asserts that it does. The UK’s announced storage projects represent nearly 40% of the total estimated capacity currently under development in Europe and it has issued 27 active exploration licences, compared to 11 in Norway and six in Denmark. Many of these licences are not yet associated with publicly announced or marketed ‘projects’; indeed, this large-scale approach to storage licensing reflects the strategy of the UK’s offshore regulator, the North Sea Transition Authority, which has highlighted the inevitable need to explore many more potential sites than will ultimately be suitable for storage. Just as for oil and gas exploitation, not every exploration licence will translate into a viable storage site. 

The UK’s other advantage is proximity. The existing gas pipeline ‘Interconnector’ linking Bacton in the UK to Zeebrugge, Belgium is 235 km long. A CO₂ pipeline along this same route has been proposed and would allow direct access to nearby storage sites in the UK’s Southern North Sea. Such a link would be scarcely longer than the planned 200-km ‘Aramis’ pipeline connecting Rotterdam with offshore storage in the Netherlands, which targets operation by 2028. In contrast, Equinor’s ‘CO₂ Highway Europe’ and EU2NSEA project propose a 1000-km pipeline to link storage sites on the Norwegian Continental Shelf with France, Belgium, Germany, and the Netherlands. Even Denmark is relatively distant from the industrial hubs of North-West Europe and will likely rely on extensive onshore pipeline networks to import significant volumes of CO₂. Storage sites off the UK’s west coast are also highly accessible to emitters in Ireland, where efforts to develop domestic storage appear to have stalled. 

Ambitious plans to develop a cross-border CO₂ transport network within the EEA are welcome, as is the EU’s recognition of plans like EU2NSEA as ‘Projects of Common or Mutual Interest’ – making them eligible for infrastructure funding. However, highly capital-intensive infrastructure will take longer to plan and build and will ultimately depend on a significant critical mass of emission sources committing to invest in CO₂ capture and use the pipelines. In the near term, many capture projects in the EU are instead expecting to ship CO₂ to Norway or Denmark, through frontrunner projects like Northern Lights, which is a flexible but more costly option than pipeline transport. Even industries with access to initial pipeline routes, such as Aramis, are expecting high tariffs from oil and gas companies with a captive market. 

Opening up access to UK storage via both ship and pipeline can increase competition and help drive down costs, while also greatly reducing the climate risk of individual stores failing to develop on time or being temporarily offline for any reason. Several of the UK’s planned sites are clustered close to the Dutch licences connected to the Aramis pipeline; the most cost-efficient solution for this region could well be to develop an interconnected network of stores accessible to emitters on both sides of the North Sea.  

Unlike Norway, the UK has plenty of its own emissions to store, but also has much to gain from a pan-European CO₂ network. For many of the country’s 27 exploration licences there is currently no clear case to invest in developing an operational site, as they are not associated with the UK’s funding scheme targeting priority industrial clusters. Giving these sites another route to market can only make more domestic storage options available to UK emitters, which could also choose to export to the EEA. 

Overcoming the barrier 

Political interest in opening the UK’s storage resource to the EU is slowly growing. On the UK side, the government’s long-term Vision for CCUS released last year highlighted the opportunity, while the EU’s Industrial Carbon Management Strategy laid out requirements for ‘a potential future recognition of CO₂ storage sites in third countries without a linked ETS.’ Interest from Member States appears more pronounced, with 2023 seeing formal statements of cooperation on energy and climate between the UK and France and the UK and Germany, including explicit mentions of CCS and cross-border transport. As the UK’s new Labour government openly seeks to build greater ties with the EU, there is a valuable opportunity to tackle this problem. 

However, there is little clarity on what exactly needs to change to resolve the barrier created by the ETS divergence. Recoupling the two trading systems currently seems politically challenging and could take years. The EU ETS – which is next open for revision in 2026 – could potentially be amended to acknowledge storage sites permitted in other suitable jurisdictions. Another proposed approach is to use the EU’s ‘Principle of Equivalence’, which recognises regulations of an equivalent standard in third countries (primarily for financial services), to address the problem. A useful first step for any solution is a formal declaration of cooperation on the issue between the EU and UK. But it is unlikely to be as simple as mutual recognition of each country’s storage protocols. For example, in the event of a leak of imported CO₂ there would need to be legal clarity on which ETS pricing system applies to the emission.  

Many countries in the EEA have recently signed Memoranda of Understanding on cross-border transport of CO₂, primarily aimed at addressing another regulatory barrier posed by the London Protocol – an international maritime treaty that prohibits the export of waste for offshore disposal. An amendment to the Protocol enables the cross-border transport and storage of CO₂ provided the countries involved have reached a bilateral agreement on the matter.² While this step would also be required for any UK-EU interaction, it should be more easily resolved through agreements with Member States. 

The need for urgent action and prospects beyond the North Sea 

Policymakers on both sides of the English Channel recognise the climate and cost benefit of offering their industries access to more decarbonisation options, but regulatory convergence is often presented as a distant goal – post-2030 – and without a clear political strategy for getting there. Illustrating this long-term view, the EU’s Joint Research Centre’s 2024 study ‘Shaping the future CO₂ transport network for Europe’ assumes the UK can only participate in the network from 2035; by which time, alternative infrastructure will be locked in. In reality, overcoming this political and regulatory hurdle could prove pivotal in enabling both the EU and the UK to meet their 2030 targets.  

Looking beyond the North Sea, some developers of CCS projects in Southern Europe have pointed to the need for similar political solutions to allow them to connect with promising storage resources in countries such as Algeria, Egypt, and Israel. Without the UK’s benefit of a ‘shared origin’ storage regulation, this could present an even more challenging barrier. But ultimately the cross-border flow of CO₂ for the purpose of climate change mitigation may need to become as straight-forward as it currently is for fossil fuels. Scaling up CO₂ storage and transport networks at the pace required is already a colossal task, and will be made still harder by unnecessary constraints on the options at Europe’s disposal. 

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¹ The price of CO2 under the ETS was at €67 per tonne in July 2024.

² In 2022, a paper from the European Commission set out that bilateral agreements for the purpose of the London Protocol are effectively satisfied within the EEA by existing EU legislation. However, Member States have continued to develop bilateral agreements for cross-border transport of CO₂.