IOGP Europe recommendations on workable solutions for the upcoming CO2 markets and infrastructure legislative proposal

Executive summary

The European Commission’s upcoming legislative proposal on CO₂ markets and infrastructure will be a key enabler for scaling industrial carbon management and delivering the EU’s climate objectives, expected by Q3 2026. It represents an important step towards enabling safe, reliable, and cross-border CO₂ flows from capture sites to transport networks and geological storage facilities. The framework should provide cross-border legal and investment certainty while avoiding premature market design choices for a value chain that remains nascent and heterogeneous across Member States.

The EU approach should be principles-based and phased. Core principles such as transparency, non-discrimination, proportional oversight, and predictable cross-border operability should be set now, while more detailed EU-wide economic and technical rules should be introduced only as operational evidence and market maturity justify them. In the near term, requirements should remain targeted and proportionate to support first movers towards Final Investment Decision (FID), preserve private investment incentives, and protect projects already in advanced development through appropriate transitional arrangements.

The main bottlenecks for large scale CCS development today do not lie around a lack of economic regulation, but rather on the enabling conditions that prevent projects at initial stages from progressing at the necessary pace. These factors include slow and complex permitting, insufficient legal clarity and coordination for cross-border transport, restrictions on storage development in some Member States (including bans), limited early-stage public support to catalyze first-mover investments, and uncertainty over future COâ‚‚ volumes needed to underpin long-term contracting.

To support the timely development of the CCS value chain, regulatory efforts should, therefore, prioritize the removal of these barriers through targeted enabling measures that focus on accelerating permitting, enhance cross-border operability, and strengthen investor confidence.

This paper is structured around key building blocks of an effective EU framework. It also addresses a number of enabling elements that fall outside the scope of the public consultation (to which IOGP Europe provided input to) but remain critical to CCS deployment and therefore represent a practical limitation to scale-up. On this basis, it sets out recommendations to inform and support the development of the forthcoming legislative proposal.

Summary of the key recommendations:

1. Adopt a principles-based, phased EU framework focused on transport gaps. Provide cross-border legal and investment certainty without locking CCS into a premature market model; build on the CCS Directive for storage aspects and prioritize workable CO₂ transport rules and capture–transport–storage interfaces.
2. Scale storage through bankable, contract-led access. In the ramp-up phase, storage access should remain market-based and tailored to geology and liabilities under the CCS Directive; prescriptive EU-wide third-party access risks delaying investment and capacity build-out.
3. Keep tariff regulation proportionate and evidence-based. Avoid EU-wide predetermined tariff- and access regimes and leave the tariff design to Member States; apply sector-specific tariff regulation only where evidence shows persistent bottlenecks or market power risks, reflecting regional and onshore/offshore realities.
4. Accelerate deployment by streamlining permitting, de-risking the value chain and gradually introducing standards. Establish a coherent permitting framework with clear timelines and sufficient capacity; deploy derisking and funding instruments to unlock shared infrastructure; gradually introduce technical standards and ensure grandfathering so that early projects can proceed while interoperability improves over time.

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