One of the key elements of the Directive is a permit regime for CO₂ storage. The rules set out minimum requirements for selecting CO₂ storage sites to ensure there is no significant risk of reversal or damage to health or the environment. Operators are required to demonstrate financial security prior to injecting CO₂ to cover potential liabilities and must closely monitor the sites during the operational phase to ensure long-term integrity and containment of stored CO₂.

The Directive also introduces a liability mechanism in case of a reversal of CO₂ out of storage, where the operator must take corrective measures. It also integrates CO₂ storage into existing EU legislation. Environmental Liability Directive provides liability rules for environmental damage, and operators are included in the Emission Trading Scheme (ETS). If emissions are captured, transported, and stored in compliance with the CCS Directive, they are considered as not emitted under the ETS. In the case of reversal, ETS allowances must be surrendered. Liability for damage to health and property is left for regulation at member state level.

The entire lifetime of storage sites is another key element. The Directive prescribes the decommissioning requirements for sites at and after closure and provides for the transfer of liabilities from the storage operator to the member state 20 years after closure of sites.

While the CCS Directive was introduced to provide an enabling framework for carbon capture and storage (CCS), it governs any instance of geological storage of CO₂. This includes the storage portion of any carbon dioxide removal (CDR) activities which store pure gaseous/supercritical CO₂, e.g. bioenergy with carbon capture and storage (BECCS) and direct air capture with carbon storage (DACCS).

The CCS Directive governs the geological formations in which carbon can be stored. Member states are required to cooperate with the Commission to establish maps of existing, potential, and closed geological storage sites. The Directive also requires operators and competent authorities to establish 3D dynamic models of storage complexes, including protected natural areas. These data offer a critical resource for developing Europe’s carbon management plans, including CDR.

Transborder CO₂ movement

The Directive also includes provisions for the transport of CO₂ across borders and for storage reservoirs which span multiple countries. This is an important base on which to develop a modular CDR ecosystem where facilities employing CO₂ capture and storage sites might be located across Europe with CO₂ transported across national borders.

The recent revision (2022) of the Trans-European Networks for Energy (TEN-E) Regulation, which identifies priority corridors and priority thematic areas to develop and interconnect, updated the infrastructure categories eligible for support allowing CO₂ transport infrastructure to qualify as a Project of Common Interest (PCI). Fourteen such projects have already been submitted to the PCI selection.

Implementation

The implementation of the Directive varies across Europe. In addition to the restrictions allowing CO₂ storage only in geological formations which are permanently unsuitable for other purposes (see the EU’s Water Policy), member states retain the right to not allow geological storage in parts or all of their territory (for example, Germany currently limits the amount of CO₂ that can be geologically stored annually to 4 million tonnes and does not allow new demonstration projects to be approved, meaning there is no underground geological storage of CO₂ taking place). CDR operators dependent on geological storage will have to navigate this fragmented regulatory landscape.

The information on the practical application of the Directive is limited, despite it being in force for more than 10 years. The uptake of CCS in Europe has been slower than predicted and the rules have not had the chance to demonstrate their effectiveness. The lack of CCS projects has largely been due to the low carbon price and absence of policy support measures to enable the deployment of CCS. Still, the Directive requires a rigorous reviewing process prior to permitting, which makes for intensive work on both storage applicants’ and the national authorities’ side. In any event, the European Commission’s upcoming strategic vision for CCS and CCU might yet provide the necessary fuel to jumpstart the industry and stress test the CCS Directive.