To reach climate neutrality by 2050, society will require CO₂ transport and storage services to be available at scale in a functioning internal European market. This will be crucial, as parts of European industry cannot be fully decarbonised through material and energy efficiency or electrification alone. For harder-to-abate industries, decarbonisation through Carbon Capture and Storage (CCS) depends on full value chains that allow emitters to capture, transport and store CO₂. Yet there are several challenges standing in the way of a well-functioning CO₂ market, and structural weaknesses that must be addressed in the market’s development.  The carbon price included in the EU-ETS is important, but not sufficient on its own to deliver timely deployment of the CCS value chain. This due to volatility, uncertainty and price levels that may not cover the costs and risks of building out transport and storage at scale.

Some of the necessary building blocks for a well-functioning market already exist at EU level, and several Member States are moving ahead with national regimes. However, if these measures continue to evolve without a harmonised and coherent framework, the EU risks a patchwork of unaligned national markets, higher transaction costs for cross-border projects, and slower, more expensive CCS deployment. This is the context in which the Commission has announced its intention to propose a new EU legislation on CO₂ markets and infrastructure. This report describes the current market and regulatory landscape, identifies the main barriers to a well-functioning CO₂ market, and sets out regulatory options the EU should consider for the upcoming CO₂ Markets & Infrastructure Regulation. This executive summary outlines each of the different chapters in the report and their main recommendations for the upcoming legislation.