The European Commission’s future legislative proposal on CO₂ markets and infrastructure, expected in the third quarter of 2026, is shaping up as one of the most important policy files for Europe’s industrial decarbonization agenda. But if Brussels wants to accelerate carbon capture and storage deployment, the priority should not be to impose a fully-fledged market model too early. It should be to remove the practical barriers that still keep projects from moving at scale.
That is, in essence, the message delivered by IOGP Europe in its latest recommendations on workable solutions for the upcoming CO₂ markets and infrastructure legislative proposal. The organization argues that Europe needs a framework built less around premature market architecture and more around legal certainty, faster permitting, investable transport and storage chains, and credible cross-border operability.
For energy-intensive industries, infrastructure developers and investors, this is not a technical nuance. It is the difference between a policy that enables final investment decisions and one that risks delaying them.
A strategic proposal for Europe’s decarbonization agenda
The upcoming Commission initiative is expected to play a central role in enabling industrial carbon management across the European Union. Its purpose is not merely administrative. It is about creating the conditions for captured CO₂ to move safely and predictably from industrial sites to transport networks and then to geological storage facilities, often across borders and under different national regimes.
IOGP Europe’s view is that such a framework is necessary, but it should be introduced in stages. The association advocates a principles-based and phased approach, with core rules on transparency, non-discrimination, proportional oversight and cross-border legal clarity established now, while more detailed economic and technical regulation should come later, when the market has more operating experience and a clearer commercial structure.
This is an important distinction. In a sector still defined by heterogeneous geology, uneven infrastructure readiness and highly differentiated national contexts, overengineering the market too early could do more harm than good.
The real bottlenecks are not where some policymakers think they are
One of the strongest messages in the IOGP Europe paper is that the current slowdown in CCS deployment does not stem primarily from a lack of economic regulation. The main obstacles lie elsewhere, in the enabling conditions around the projects.
The organization points to several persistent barriers: slow and complex permitting procedures, insufficient legal clarity for cross-border CO₂ transport, restrictions or outright bans on storage development in some Member States, limited public support for first movers, and uncertainty over the future CO₂ volumes needed to sustain long-term contracts.
This diagnosis matters because it shifts the debate. If the problem is not an absence of tariff regimes or access models, then the answer is not to rush into a rigid EU-wide regulatory design. The answer is to make the value chain bankable and executable.
Transport first, market design later
IOGP Europe argues that the future EU framework should focus first on the transport gaps in the CO₂ value chain. For storage, the sector already has the CCS Directive as a reference point. The missing piece is a workable regime for transport and for the interfaces between capture, transport and storage.
That means rules capable of supporting different transport modes, including pipelines and shipping, while ensuring that CO₂ can move across borders under clear and predictable conditions. The goal is not to replicate the regulatory model of mature sectors such as natural gas. CCS is not yet a homogeneous network industry. It is an emerging infrastructure system that needs room to develop according to regional realities.
This is especially relevant given the variety of European conditions. Offshore regions, such as those linked to the North Sea, may evolve with more competition between different transport and storage solutions. Other regions may depend on a smaller number of projects and therefore require a different balance between regulation and commercial flexibility. A one-size-fits-all regime would ignore these differences.
Storage access should remain contract-led in the ramp-up phase
Another key recommendation is that storage access should remain market-based and contract-led, at least during the initial development phase. IOGP Europe warns that imposing prescriptive EU-wide third-party access rules too early could undermine the economics of storage projects.
The logic is straightforward. Storage sites are highly site-specific, capital-intensive and exposed to long development timelines, geological complexity and liability requirements. Investors need confidence that they can secure long-term contracts and recover costs. A rigid access regime introduced before the market matures could weaken that confidence and delay capacity build-out.
In other words, Europe needs more storage capacity first. Detailed harmonization can follow later, once there is a stronger base of operational projects and clearer evidence on where market failures actually exist.
Proportionate tariff regulation, not a predefined EU template
The same prudence applies to tariff regulation. IOGP Europe explicitly advises against predetermined EU-wide tariff and access regimes for transport infrastructure. Instead, it supports leaving tariff design to Member States and intervening with sector-specific regulation only where clear evidence emerges of persistent bottlenecks or market power concerns.
This approach reflects the physical and commercial diversity of CCS. Onshore and offshore systems will not look the same. Nor will industrial clusters in Western Europe face the same realities as emerging CCS corridors in Central and Eastern Europe. Forcing a single tariff logic onto all of them would risk constraining precisely the projects Europe is trying to accelerate.
Permitting remains the decisive test of seriousness
If there is one area where the paper is particularly practical, it is permitting. IOGP Europe makes clear that Europe will not build a CCS value chain on ambition alone. It needs faster, more coherent and better coordinated approval processes.
That means clear timelines, adequate administrative capacity and stronger alignment between Member States when projects cross borders. It also means avoiding a familiar European problem: policy goals advancing faster than implementation capacity.
For project developers, permitting delays are not a minor inconvenience. They directly affect financing risk, contractual timing and the ability to synchronize capture, transport and storage investments. In a chain as interdependent as CCS, one delay can destabilize the whole project structure.
Standards matter, and timing matters too
On technical standards, IOGP Europe again argues for a gradual approach. Interoperability is important, but the sector is still in an early stage. Detailed EU-wide standards should therefore be introduced progressively, as real operating experience accumulates and as cross-border systems become more developed.
This is a pragmatic position. Early projects should not be forced to wait for a perfect harmonized framework if they are otherwise ready to move. The paper also stresses the need for grandfathering and transitional provisions, so that projects already in advanced development are not undermined by late regulatory shifts.
For investors, this point is crucial. Regulatory stability is not just about the final rulebook. It is also about confidence that rules will not change midstream in ways that penalize early movers.
De-risking will matter as much as regulation
Perhaps the most commercially important part of the recommendations is the emphasis on de-risking instruments. IOGP Europe argues that regulation alone will not unlock the first wave of CCS investment. Europe also needs financial and policy tools capable of supporting shared infrastructure and reducing uncertainty across the value chain.
The paper points to instruments such as carbon contracts for difference, ETS-linked guarantees, funding support for common infrastructure and mechanisms that help address underutilization risk in the early phase of deployment. It also mentions the potential role of voluntary CO₂ platforms that could help connect emitters, transport providers and storage operators.
This is a realistic reading of market conditions. CCS is not being delayed because investors lack interest in principle. It is being delayed because first-of-a-kind chains remain difficult to finance when volumes, timing and counterparties are still uncertain.
Carbon pricing remains the broader backdrop
The debate over CCS infrastructure is unfolding against a wider recalibration in Europe’s carbon market. As a Carbon Expert article notes, EU ETS allowance prices have recently stabilized around EUR 69–71/tCO₂ after testing lower levels near EUR 66–68/tCO₂. Compared with the EUR 75–85/tCO₂ range seen frequently in the first quarter of 2026, this points to a market in adjustment rather than one in structural retreat.
The same Carbon Expert article argues that this should be read as a phase of recalibration within a broader structurally positive carbon pricing trend. In that interpretation, EU ETS remains a central economic signal for decarbonization investments, while policy discussions increasingly focus on how climate instruments affect competitiveness, industrial resilience and long-term capital allocation.
That broader context strengthens, rather than weakens, the case for workable CCS legislation. If carbon remains a structural cost and a structural investment signal, then the infrastructure needed to manage industrial emissions becomes part of Europe’s competitiveness equation, not just its climate narrative.