Funding Carbon Capture and Storage in Central and Eastern Europe

The document argues that for Central and Eastern Europe (CEE) to maintain industrial competitiveness and meet climate targets, it must rapidly deploy carbon capture and storage (CCS). A critical barrier is the current reliance on exporting CO2 to the North Sea, which increases costs; the report finds that developing domestic storage could reduce deployment costs by 23% to 48%. To bridge the funding gap between high deployment costs and the EU ETS price, the brief recommends a 'Coordinator' role for governments to align value chains, leverage EU funds like the Innovation Fund and Connecting Europe Facility, and implement de-risking tools such as carbon contracts for difference (CCfDs). Case studies of the Porthos (Netherlands) and Northern Lights (Norway) projects illustrate how layered public-private financing, including state-owned enterprise (SOE) participation and capital grants, can lead to final investment decisions.

• Developing domestic CO2 storage in the CEE region would significantly lower costs compared to exporting CO2 to the North Sea, with average deployment costs potentially decreasing by 23% to 48% depending on the country.
• There is a significant geographical disparity in CO2 storage capacity; currently, planned storage projects in the CEE region represent only 1.5% of total planned European capacity, despite the region accounting for nearly 19% of Europe's industrial emissions.
• Carbon contracts for difference (CCfDs) are recommended to bridge the funding gap between deployment costs and the EU ETS price, providing price stability and de-risking investments against market volatility.
• The report proposes a new 'Coordinator' role for CEE governments to strategically align emitters into clusters, optimize access to fragmented EU funding, and build administrative capacity for permitting.
• High upfront capital expenditure (CapEx) remains the primary hurdle for CCS; the report suggests using a layered financing model combining EU grants, state loans, and equity, as seen in the Porthos project where the state provided a €175.6 million guarantee to cover pre-investment risk.
• The Northern Lights project in Norway demonstrates the effectiveness of state-led risk sharing, with the Norwegian government covering up to 80% of transport and storage CapEx and 75% of capture facility CapEx.
• Green bonds are identified as an emerging tool to lower interest costs for large-scale CCS, with examples including Heidelberg Materials issuing €700 million and €500 million bonds in 2024 to expand carbon capture technologies.

APA

Clean Air Task Force (n.d.). Funding Carbon Capture and Storage in Central and Eastern Europe. https://cdn.catf.us/wp-content/uploads/2025/09/15050506/CATF-Funding-CCS-in-CEE.pdf

Chicago

Clean Air Task Force. Funding Carbon Capture and Storage in Central and Eastern Europe. n.d. https://cdn.catf.us/wp-content/uploads/2025/09/15050506/CATF-Funding-CCS-in-CEE.pdf.

Wikipedia

{{cite report |author=Clean Air Task Force |title=Funding Carbon Capture and Storage in Central and Eastern Europe |url=https://cdn.catf.us/wp-content/uploads/2025/09/15050506/CATF-Funding-CCS-in-CEE.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cleanairtaskforcendfunding, author = {{Clean Air Task Force}}, title = {{Funding Carbon Capture and Storage in Central and Eastern Europe}}, institution = {Clean Air Task Force}, url = {https://cdn.catf.us/wp-content/uploads/2025/09/15050506/CATF-Funding-CCS-in-CEE.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }