UK-EU ETS Linkage paves the way for cross-border CO2 transport and storage

• The CCSA welcomes statements to link the EU and UK ETS as part of the EU-UK Reset Summit and continued regulatory exchanges on new energy technologies such as hydrogen, carbon capture utilisation and storage (CCUS) and biomethane.
• The CCSA looks forward to working with the UK Government and EU Commission on rapidly taking steps to remove the regulatory barriers to a European CO₂ storage market.
• The UK holds a third of Europe’s CO₂ storage capacity, presenting a huge economic export opportunity. Cross-border cooperation on a Europe-wide CO₂ storage market can help EU emitters in Europe using offshore CO₂ storage benefit from 28% reduction in transport and storage costs and provide significant economic benefits to the UK.

[London, 19 May] – Today, UK and EU officials met in London for a Summit aimed at establishing a new chapter in relations. Negotiators struck a deal on energy which included an agreement on working towards linkage of EU and UK Emissions Trading Schemes (ETS) and mutual technical and regulatory exchanges on new technologies including CCUS and hydrogen.

The Carbon Capture and Storage Association (CCSA) strongly welcomes these developments. Establishing a link between UK and EU ETS provides greater certainty for industry to decarbonise on both sides of the Channel at a lower cost. It removes barriers to trade and encourages investments in low-carbon technologies such as CCUS, a sector which both the UK and EU support.

A linked carbon market would ensure a level playing field in terms of carbon pricing, reducing the risk of competitive distortions and carbon leakage as well as lowering the overall cost of reaching net zero.

Cross-border cooperation aimed at creating a Europe-wide CO₂ storage market has the potential to bring down CO₂ transport storage costs by 28% for emitters located in the EU, as well as significantly bringing down emissions, as shown by this report. There are significant returns to be made from exporting the UK’s CO₂ storage potential, projected to be a £30bn global export market for the UK by 2050.

While these positive developments in energy cooperation between the EU and the UK are very much welcomed, the CCSA calls for the delivery of a comprehensive and robust Carbon Border Adjustment Mechanism (CBAM) to cover all sectors and industries including those currently out of scope. This includes refining, glass, and ceramics.

Urgent steps are also needed towards removing the regulatory barriers to a European-wide CO₂ storage market. By doing so, this will contribute to the reduction of emissions, achieve better value-for-money from CCUS projects and provide concrete support to the further deployment of CCUS technologies across the UK’s industrial heartlands.

Olivia Powis, CEO, said:

“The outcomes of the EU-UK Summit mark a pivotal moment for Europe’s climate ambition. A linked EU-UK Emissions Trading System alongside a comprehensive Carbon Border Adjustment Mechanism would not only enhance the efficiency of carbon pricing but also provide a clear, stable signal to industry, crucial for unlocking long-term investments in CCUS technologies. For sectors that are hard to decarbonise, CCUS will play a critical role in meeting net zero goals. A unified carbon market can reduce fragmentation, lower compliance costs, and help ensure that carbon abatement happens where it’s most cost-effective.”

“In the context of the EU’s Carbon Border Adjustment Mechanism, close alignment between the UK and EU on carbon pricing is vital to safeguard competitiveness and minimise trade friction. This is not just about environmental alignment, but also about economic and industrial strategy. A linked system, alongside urgently addressing the regulatory barriers to a European CO₂ market, will give the UK and EU a shared platform to lead on international carbon market development, demonstrating climate leadership on the global stage at a time when ambition and cooperation are more important than ever.”

Notes to Editors

• Interview requests: To interview Olivia Powis, CEO of the CCSA, please contact price@ccsassociation.org
• For a briefing call on CCUS, please contact Sara Price on 07825235313 / price@ccsassociation.org
• Press Pack: An FAQ, infographics and an animation accompany the press release for use. Various press items can be found under “CCSA Press Pack” on the CCSA website HERE
• Read the CCSA’s report into ‘Accelerating a Europe-wide CO₂ storage market’ HERE

About the CCSA

CCUS, or Carbon Capture, Utilisation and Storage, is a key low carbon solution – vital to meeting Europe’s net zero target at least cost. CCUS enables industrial decarbonisation as well as the production of clean power, clean products (such as cement and chemicals) and clean hydrogen – which can also be used to decarbonise industry. In addition, CCUS also enables greenhouse gas removal from the atmosphere through Direct Air Capture with Storage (DACS) or Bioenergy with CCS (BECCS).

The CCSA is the trade association accelerating the commercial deployment of CCUS, with offices in Brussels and London. We work with members, governments and other organisations to ensure CCUS is developed and deployed at the pace and scale necessary to meet net zero goals and deliver sustainable growth across regions and nations.

The CCSA currently has over 120 member companies who are active in exploring and developing different applications of carbon capture and removals, CO₂ transportation by pipeline and ship, utilisation, geological storage, and other permanent storage solutions, end-users in the power, industry, waste management, fuels, and hydrogen production sectors, plus supply chain, engineering, construction and management, legal and financial consulting sectors.

[End]