CO2 Market and Infrastructure Framework

CO₂ Market and Infrastructure Framework

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Proposed i

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Adopted i

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Table of contents

In a Nutshell

What is the CO₂ market and infrastructure framework?

The CO₂ Market and Infrastructure Framework (sometimes referred to as the CO₂transport package) is a forthcoming legislative initiative aimed at creating a well-functioning and cost-effective market-driven value chain for carbon dioxide (CO₂) in the EU. The framework was announced as a core action within the Industrial Carbon Management Strategy (ICMS) to develop open-access CO₂ transport and storage infrastructure, and a single market for CO₂ in Europe.

It aims to bridge the gap between the immaturity of the industrial carbon management value chain and the need for the EU to capture 280 million tonnes of CO₂ per year by 2040 and up to 450 million tonnes per year by 2050, as outlined in the ICMS and the impact assessment on the 2040 climate target. The initiative seeks to address existing barriers to cross-border CO₂ transport and market access, such as legal uncertainty and investment risks, by creating a harmonised approach to replace fragmented national policy initiatives.

The initiative’s core function is to fill regulatory gaps by complementing existing legislation, including the Directive on geological storage of CO₂, the Net-Zero Industry Act on scaling net-zero technologies, and the Regulation on Trans-European Networks for cross-border CO₂ infrastructure.

How will the CO₂ market and infrastructure framework work in practice?

The initiative is expected to set rules across the entire value chain, focusing on market access, infrastructure development, and regulatory oversight. The measures set out in the framework aim to:

Enable cross border flow and interoperability by establishing CO₂ standards to prevent market fragmentation, removing regulatory barriers to cross-border transport, and ensuring that the same rules apply to infrastructure in non-EU countries.
Create a cost-effective value chain by setting rules for financing infrastructure, establishing a permanent enabling framework for permitting CO₂ assets, and creating an independent regulatory oversight for CO₂ transport and storage services.
Improve investor confidence and certainty by establishing an EU-wide infrastructure planning mechanism and explore a dedicated platform to address coordination issues and strengthen the bargaining power of smaller CO₂

How does carbon removal fit into the CO₂ market and infrastructure framework?

Several CDR methods rely on CO₂ transport & storage infrastructure, without which they cannot operate and scale. The initiative mandates that the vast majority of the infrastructure that is to be built up to 2040 must be capable of supporting permanent storage, and by 2050 about half of the captured CO₂ is expected to be stored permanently.

Since the captured CO₂ is primarily destined for permanent storage, the infrastructure itself is a prerequisite for scaling up CDR. Permanent CO₂ storage is a sustained, long-term requirement of the CO₂ market and infrastructure framework, even as CO₂ utilisation activities are projected to increase post-2040 and into 2050.

What’s on the Horizon

July–September 2025: Call for evidence feedback period for the CO₂ market and infrastructure framework
6 October 2025–9 January 2026: Public consultation period
Q3 2026: Planned adoption of the legislation by the Commission

Carbon Gap’s view

The framework currently departs from the necessity of the EU to use carbon capture utilisation and storage (CCUS) to meet climate objectives. However, to unlock the wider value of CO₂ market and reach the full cost potential of the cross-border network, the Regulation must be inclusive of carbon removal needs. If planned solely around point-source CCS, the framework risks being underutilised from the beginning.

Therefore, as stated in our feedback to the call for evidence for an impact assessment, Carbon Gap recommend that the upcoming proposal:

Develop network rules with CDR projects in mind: The Regulation must enshrine open and non-discriminatory third-party access to CO₂ transport and storage for fossil, biogenic, and atmospheric CO₂ to create a network fit for both industrial decarbonisation and negative emissions.
Plan for one integrated carbon management system – not three silos: The Regulation must treat the CO₂ network as a holistic, integrated carbon management system, including CCS, CCU and CDR as part of a single strategic net-zero family.
Coordinate at the EU level to resolve cross-border bottlenecks: To enable cross-border infrastructure deployment the Regulation should establish harmonised EU-wide rules for liability, MRV, CO₂ quality standards, and third-party access, aligning with the Net-Zero Industry Act.
Prioritise existing and joint infrastructure projects: Building out multi-user CO₂ transport and storage hubs is crucial for smaller projects and early CDR initiatives to access infrastructure, enabling economics of scale and access for diverse users.
Make investments in CO₂ infrastructure attractive: Strategic EU funding instruments – including the NZIA, the Connecting Europe Facility, and the Innovation Fund – must be actively leveraged to prioritise infrastructure for BECCS and DACCS, not just point-source CCS. Factoring in different users from the outset also helps de-risk the entire network.

Timeline

6 October 2024

July–September 2025

6 October 2025

9 January 2026

Q3 2026

6 October 2024

The Commission adoption of the ICMS

July–September 2025

Call for evidence feedback period

6 October 2025

Public consultation opens

9 January 2026

Public consultation closes

Q3 2026

Planned Commission adoption of the legislation

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Last updated: 30 Oct 2025

Proposed

Unofficial title

CO2 Market and Infrastructure Framework

Legal name

CO₂ market and infrastructure in the EU

Entity of origin

European Union

Year

2025

Policy type

Laws and Regulation

Key stakeholders

European Commission

DG ENER C2

Links to other relevant policies

Net-Zero Industry Act - Aims to provide a stable and simplified regulatory environment to support the scale-up of net zero technologies. The CO₂market and infrastructure framework will help to operationalise the NZIA’s binding CO₂ storage target of 50 Mt by 2030 by creating the market and infrastructure required to meet this volume.
EU CCS Directive- Establishes a regulatory framework for the safe and responsible development and operation of geological CO₂ storage in the EU. The CO₂ market and infrastructure initiative will complement the CCS Directive's technical and safety requirements for storage sites by creating the market rules for third-party access and harmonised CO₂ quality standards for the transport network.
EU ETS - Is a market-based approach for setting a price for carbon dioxide (CO₂) emissions. The CO₂market and infrastructure framework aims to translate the EU ETS carbon price signal into bankable infrastructure projects by reducing investor risk and providing clear market predictability.
TEN-E Regulation - Sets out guidelines for cross-border energy infrastructure within the EU. CO₂ market and infrastructure framework will facilitate the TEN-E Regulation’s existing support for cross-border CO₂ infrastructure projects by removing non-technical regulatory barriers and introducing an EU-wide planning mechanism to connect emitters with storage capacity.

CO₂ Market and Infrastructure Framework

In a Nutshell

What is the CO2 market and infrastructure framework?

How will the CO2 market and infrastructure framework work in practice?

How does carbon removal fit into the CO2 market and infrastructure framework?

What’s on the Horizon

Carbon Gap’s view

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Carbon Removal Policy in Spain

Project Financing

Timeline

European Commission

Success!

What is the CO₂ market and infrastructure framework?

How will the CO₂ market and infrastructure framework work in practice?

How does carbon removal fit into the CO₂ market and infrastructure framework?