UK and Europe Risk Losing CCS Investment without Stronger Policy Signals

Why It Matters

Policy certainty is essential to unlock the financing needed for CCS, a cornerstone technology for meeting net‑zero targets and maintaining Europe’s leadership in low‑carbon infrastructure.

Key Takeaways

• Europe leads CCS planning but faces policy uncertainty
• Capture cost averages $163.45 per tonne, exceeds carbon price
• 42% foresee 11‑15% rise; 31% expect 16‑20%
• Insurance critical, yet risk‑insurance collaboration remains limited
• Middle East, Asia emerging as competitive CCS markets

Pulse Analysis

The report underscores a widening gap between Europe’s ambitious CCS roadmaps and the policy frameworks needed to fund them. With capture, transport and storage costs hovering around $163 per tonne, projects are financially viable only with substantial government subsidies. This misalignment threatens to stall final investment decisions, pushing many developers to postpone commitments until 2028‑30. For investors, the uncertainty translates into higher risk premiums and a reluctance to allocate capital to projects that may become uneconomic as carbon prices remain modest.

Risk mitigation emerges as a pivotal factor in the CCS financing equation. Nearly two‑thirds of surveyed leaders rely heavily on insurance to hedge operational and regulatory risks, yet the integration between technical teams, insurers, and risk managers remains fragmented. Enhanced collaboration could streamline claim processes, lower premiums, and provide the confidence needed for private capital to enter the market. Policymakers can facilitate this by establishing standardized risk‑sharing mechanisms and encouraging transparent data sharing across the value chain.

Globally, the CCS landscape is reshaping, with the Middle East leveraging scale and lower costs, while Japan and South Korea benefit from robust government backing. Southeast Asia, Australia, and China are also accelerating project pipelines, positioning themselves as the next wave of investment destinations. To retain its competitive edge, Europe must deliver decisive policy signals, align subsidy structures with market realities, and foster a supportive insurance ecosystem. Failure to act could cede market share to these emerging hubs, undermining the continent’s climate objectives and its broader industrial strategy.