EU’s carbon capture target faces 40% shortfall despite launch of massive north sea industrial hubs
Rotterdam, Netherlands/Brussels, Belgium/
EUROPEAN CLIMATE TECHNOLOGY:
Flagship Porthos and Antwerp Projects Advance as the Commission Battles a €10 Billion Funding Gap and Regulatory Delays Threatening the Mandatory 50 Million Tonne Goal
The European Union’s ambitious attempt to reconcile its heavy industry with its climate goals is facing a critical challenge.
While the construction of massive cross-border Carbon Capture and Storage (CCS) hubs in the North Sea is proceeding, independent analysis warns that the bloc is on course for a significant failure to meet its binding climate targets.
The EU’s Carbon Capture Target Faces 40% Shortfall Despite Launch of Massive North Sea Industrial Hubs, creating a profound dilemma for policymakers in Brussels who must urgently unlock financing and streamline regulations to keep the net-zero industrial strategy on track.
The foundation of Europe’s industrial decarbonisation strategy rests on the Net-Zero Industry Act (NZIA), which established a legally binding target:
the EU must achieve an annual CO2 injection capacity of a minimum of 50 million tonnes (Mt) per year by 2030.
This technology is deemed essential for the “hard-to-abate” sectors—cement, steel, chemicals, and refining—that cannot easily transition to green hydrogen or electrification alone.
The North Sea Hub Strategy: Ambition on the Ground
The major flagships of this effort are now visible on the ground, centered around the industrial clusters of the Benelux region.
The Porthos project in the Port of Rotterdam, Netherlands, which is already under construction, stands as the most advanced example.
This massive public-private partnership involves connecting the port’s major industrial emitters (including Shell and ExxonMobil) via a dedicated pipeline to depleted offshore gas fields under the North Sea, aiming to store up to 10 Mt of CO₂ annually.
Simultaneously, the Port of Antwerp-Bruges in Belgium is finalizing the local network infrastructure, which will connect its own vast petrochemical cluster to Rotterdam’s storage sites by 2027.
These hubs are designed to create a pan-European CO₂ pipeline backbone, eventually extending storage capacity to land-locked heavy industrial regions like Germany’s Rhine-Ruhr area.
This strategy of centralized capture and shared storage leverages Europe’s ample geological capacity and is the key to unlocking the economies of scale needed to bring down the cost of CCS technology.
The Funding and Policy Crisis
Despite the clear technical vision, the project pipeline is running dangerously slow. A stark analysis released in October 2025 by Wood Mackenzie warned that the EU is currently on track to deliver only 15.6 Mt/year of commercially secure storage capacity by 2030—a staggering 40% shortfall against the mandatory NZIA goal.
The primary obstacle is economic. While the EU has allocated significant funds (over €2 billion from its Innovation Fund and Connecting Europe Facility), there is an estimated €10 billion funding gap remaining for announced projects across the continent.
This gap is compounded by the fact that the EU’s Emissions Trading System (ETS) carbon price, which provides the main revenue stream for decarbonisation projects, remains too low (averaging around €70/tonne) to make many capture projects commercially bankable without additional direct state aid or guaranteed price mechanisms like Carbon Contracts for Difference (CCfDs).
Regulatory hurdles are also contributing to the delay, with complex permitting and licensing procedures slowing the crucial Final Investment Decisions (FIDs) for both storage and pipeline infrastructure.
If the Brussels-based Commission fails to bridge this €10 billion gap and rapidly streamline the licensing process, the mandatory 2030 target will be missed.
The failure of this ambitious technological push risks having two catastrophic consequences: first, undermining the credibility of the entire Green Deal agenda; and second, exposing hard-to-abate industries to severe competitive pressure that could accelerate carbon leakage—the movement of European industrial production to regions with lower environmental standards.
The coming months will determine whether the EU’s climate strategy can overcome these financial and regulatory realities to fulfill its technological promise.
Headline Points
Mandatory Target: The EU’s Net-Zero Industry Act (NZIA) mandates an annual CO₂ injection capacity of 50 million tonnes (Mt) by the year 2030.
Flagship Hubs: Construction is advancing on massive cross-border hubs, including the Porthos project in Rotterdam and connecting pipelines from Antwerp-Bruges, aimed at storing CO₂ in the North Sea.
40% Shortfall: Independent analysis warns that current commercially secure capacity is only 15.6 Mt/year, leading to a likely 40% shortfall against the binding 2030 goal.
€10 Billion Gap: The main barrier is an estimated €10 billion funding gap for announced projects, with the current ETS carbon price being insufficient to make many capture projects commercially viable.
Industrial Risk: Failure to meet this target risks undermining the EU’s industrial climate strategy and increasing the risk of carbon leakage from hard-to-abate sectors like steel and cement.
