UK and Europe Risk Losing CCS Investment without Stronger Policy Signals
•January 30, 2026
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Companies Mentioned
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.
UK and Europe risk losing CCS investment without stronger policy signals
The UK and Europe risk missing out on major carbon capture and storage investment without stronger and more credible government backing, according to a new report from Marsh Risk.
The analysis, CCS at Scale: Aligning Risk and Reality in Carbon Capture and Storage, draws on views from 504 senior UK-based CCS decision-makers across the global value chain.
Europe currently leads globally for planned CCS investment, with 62% of industry leaders targeting the region. However, rising costs, regulatory gaps and policy uncertainty are threatening deployment and long-term competitiveness.
The average forecast cost to capture, transport and store CO2 is $163.45 per tonne, well above current carbon prices.
As a result, many projects are expected to remain reliant on national subsidies to be commercially viable.
Cost pressures are expected to intensify, with 42% of leaders forecasting cost increases of 11-15% and 31% anticipating rises of 16-20%. This is placing growing strain on project economics and investment decisions.
Final Investment Decisions are also being staggered, with 26% expected between 2025-27 and 35% between 2028-30.
While this may limit short-term risk, the report warns of a potential bottleneck later this decade.
Insurance is viewed as a critical enabler, with nearly two-thirds of respondents relying heavily on insurance to manage CCS risks. Despite this, engagement between risk, insurance and technical teams remains limited.
The report highlights growing competition from emerging CCS markets. The Middle East is benefiting from scale and cost advantages, while Japan and South Korea have strong government backing.
Projects are also advancing across Southeast Asia, Australia and China, positioning these regions as the next wave of global CCS investment.
The post UK and Europe risk losing CCS investment without stronger policy signals appeared first on Energy Live News.
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