EU Cash Supercharges Carbon Capture at Industrial Scale

Backed by billions from the EU Innovation Fund, carbon capture is shifting from trials to large-scale deployment across Europe’s heavy industries

12 Jan 2026

Europe’s carbon capture industry is moving beyond pilot schemes as rising public funding shifts the focus toward large-scale deployment across heavy industry.

In its latest Innovation Fund selection for the 2024–25 round, the European Commission allocated about €2.9bn to 61 net-zero projects, many of which include carbon capture, utilisation and storage. The technology is no longer treated as a niche option but is embedded in broader projects aimed at deep emissions cuts in sectors such as cement, chemicals, steel and refining.

The change reflects a reassessment of how Europe can decarbonise its industrial base. For years, carbon capture projects were held back by high costs, small scale and difficulties securing finance. Grants from the Innovation Fund, which is financed by revenues from the EU emissions trading system, now reduce upfront risk and improve the economics of larger facilities.

Companies in energy-intensive industries are showing greater interest as they face limited alternatives to curb so-called process emissions, pollution generated by chemical reactions rather than energy use. For these sectors, electrification alone is often insufficient.

EU policymakers increasingly present carbon capture as part of essential industrial infrastructure, alongside CO₂ transport and storage networks. Commission officials argue that without these systems, Europe would struggle to retain industrial output while meeting climate targets. The emphasis has shifted from testing technologies to deploying them quickly and at scale.

The policy signal is intended to reassure investors that carbon capture will have a lasting role in the bloc’s climate strategy, rather than depending on isolated funding rounds. Industry groups say this framing has helped draw private capital into projects that were previously seen as too risky.

However, companies caution that grants cannot resolve all obstacles. They continue to call for clearer rules on CO₂ storage, cross-border transport and long-term carbon pricing. Without regulatory certainty, they warn, projects supported today may face challenges once public funding tapers off.

By committing billions of euros through 2024 and 2025, the EU is seeking to create momentum that extends beyond the current beneficiaries. If sustained, that support could make carbon capture a routine feature of Europe’s industrial landscape, delivering emissions reductions while preserving production capacity.