Wood Mackenzie analysis reveals EU's carbon storage injection capacity targets face significant shortfall

This independent study reveals widespread project delays and regulatory challenges are undermining Europe's carbon capture and storage (CCS) ambitions.

The widening gap

Wood Mackenzie's assessment shows that the EU’s CO₂ injection capacity available by 2030, as assessed in October 2025, is projected to be around 28.5 million tpy – a shortfall of 21.5 million tpy against the NZIA target of 50 million tpy. The estimate falls further if projects without licences are discounted – regulatory issues being one of the key barriers to progress.

The analysis, commissioned by ExxonMobil, OMV Petrom, Shell, and TotalEnergies but conducted independently by Wood Mackenzie, examined announced projects across the EU using the company’s Lens Carbon database. Currently, no large scale storage project operates in the EU: the small scale projects operate today, and those that have taken final investment decisions already will deliver 2.9 million tpy by 2030.

“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/t for capture projects, we are seeing policy running ahead of market fundamentals and what the industry can deliver. The eight-year average development timeline from license award to operations means the window for meeting 2030 targets has essentially closed.”

Eight-year development timeline creates bottleneck

European storage projects require approximately eight years from exploration/appraisal to operations, meaning projects needed exploration or appraisal licences by 2023 to meet the 2030 timeline. Only 15.6 million tpy of storage capacity was sufficiently advanced by 2023 to enable 2030 operations. This extended development period, combined with regulatory hurdles and legal challenges, means that accelerating projects to meet the 2030 deadline is not a realistic option.

Licensing lags behind ambition

The study reveals licensing has not kept pace with project development needs. Only Italy operates a pilot carbon storage project, while the Netherlands (one of Europe's most advanced jurisdictions for CCS) has awarded just two CO₂ storage licences. Several projects, including Porthos and Aramis in the Netherlands, have experienced delays due to legal objections.

Economic challenges compound delays

EU Emissions Trading System (ETS) prices, averaging US$70/t in 2024, remain below levelised CCS costs for all EU capture projects modelled by Wood Mackenzie. This economic reality, combined with bankability issues and price fluctuations, limits investment appetite. Many capture projects struggle economically due to insufficient incentives, creating a high risk of stranded assets.

The analysis shows many announced capture projects are in locations quite remote from proposed stores, necessitating expensive transport infrastructure that adds further cost and complexity to the value chain.

Projects encounter delays of over 1.5 years

Wood Mackenzie's research found most European CCS projects typically face delays averaging over 1.5 years, driven by technical, legal, and commercial barriers. Even advanced projects like Liverpool Bay CCS in the UK and Porthos in the Netherlands have encountered significant setbacks despite government support.

Policy implications

The findings highlight the challenge of aligning policy ambition with technical and commercial reality. While the EU has established a supportive policy environment relative to other regions, limitations in individual incentive streams mean developers typically require multiple funding sources to advance projects.

The study suggests the NZIA's 2030 target may need reassessment when the European Commission reviews progress in 2028, as originally planned under the legislation.

Read the article online at: https://www.tanksterminals.com/storage-tanks/24102025/wood-mackenzie-analysis-reveals-eus-carbon-storage-injection-capacity-targets-face-significant-shortfall/