In recent months, headlines about carbon capture, and storage (CCUS) have oscillated between bullish growth projections and sobering signs of friction. While global capacity announcements and storage hubs continue to proliferate, several high-profile carbon capture initiatives in Northern Europe, particularly in Scandinavia, have faltered or paused.
These setbacks underline a central tension in the sector: ambition is high, but commercial, regulatory, and market conditions are still struggling to keep pace with rhetoric.
Northern Europe has long been framed as fertile ground for CCUS. Denmark, Norway, and Sweden have ambitious climate goals; Norway has developed one of Europe’s first large-scale underground storage hubs in the North Sea; and governments have put tens of billions of crowns behind decarbonization schemes.
Yet a series of thorny obstacles, from tender design to financing uncertainties, has derailed or slowed flagship projects. The result is a hard-earned reality check on what scaling CCS actually requires.
Why Scandinavia Was Supposed to Lead
Scandinavia’s appeal for CCUS is clear:
- Strong climate commitments: Denmark’s and Sweden’s net-zero strategies anticipate deployment of carbon capture, removal and storage to hit 2030 and 2045 targets.
- Industrial emissions pressure: Cement, waste-to-energy, and heavy manufacturing sectors in the region are among the hardest to decarbonize without CCS.
- Existing storage infrastructure: Norway’s Northern Lights hub provides transport and injection services for captured CO2 from Europe, with initial phases moving toward several million tons per year of capacity.
Yet despite favourable policy and technological capabilities, four recent cases highlight how far the region still has to go.
Denmark’s Carbon Capture Tender Collapse
In what was billed as a pivotal procurement to kickstart industrial CCS, Denmark’s public subsidy tender for carbon capture capacity has seen almost all competing bidders drop out.
Originally, ten companies were accepted after prequalification, including a range of waste-to-energy facilities and other industrial emitters; but as the process unfolded, eight of the ten withdrew, leaving only Aalborg Portland, a cement producer, and one additional (undisclosed) project submitted final bids.
Industry and policy analysts point to several structural reasons for this mass withdrawal:
- Uncertainty around storage access: Denmark does not yet have guaranteed domestic storage capacity onshore or in its territorial waters, forcing bidders to assume the risk of securing transport and storage slots elsewhere.
- Risk allocation and financial exposure: The tender’s requirements effectively placed significant technical and commercial risk on bidders, including obligations to meet stringent performance targets without clear assurance of revenue streams or supportive market mechanisms. Companies faced massive penalties of roughly $17 million for every year that they didn’t reach capture targets, according to some sources.
- Underdeveloped carbon markets: Many participants were still grappling with the nascent nature of carbon removal/ CCS markets, which lack predictable pricing and off-take contracts.
The outcome suggests that policy ambition isn’t enough in isolation: without derisked pathways for capture, transport, storage, and credible long-term revenue, industrial players remain wary of committing capital to unproven economics.
“It looks like the tender was designed in a way that simply does not reflect the realities of CCS project developers in Denmark today,” carbon removal advocate and well-known industry voice Sebastian Manhart summarized in his LinkedIn post about the failed tender.
“It is unlikely that Denmark will be announcing another tender like this in the foreseeable future,” a source close to the matter told Carbon Herald.
Relevant: Denmark’s CCS Tender: Failure Or Reality Check?
Jannick Buhl, Head of CCUS, CDR and biomass at the Danish District Heating Association, also expressed his skepticism of a new tender: “I believe there is a good chance that more funds will be allocated to CCS.”
“However, instead of rushing into a new tender using the same model, I believe we should use the learnings from the recently finished tender to find a subsidy model which deals with the high project-on-project risk and is better aligned with timelines across the value chain,” Buhl said.
The Danish Energy Agency has not responded to our request for comment.
Equinor Scales Back Carbon Capture & Storage Ambition
For decades, Equinor, Norway’s partly state-owned energy giant, has been a lynchpin of Europe’s CCS ecosystem. The company played a formative role in developing the Northern Lights project – one of Europe’s flagship carbon storage developments, which transports and injects industrial CO2 under the North Sea.
This project is one of the few that has largely helped shape public awareness of CCS in the region. The prominence of such projects has helped normalize CCS in the public discourse, particularly in Norway where storage takes place offshore and has encountered less local opposition than onshore energy infrastructure. However, the visibility of large projects can sometimes obscure the wider structural challenges the industry still faces.
In early 2026, Equinor disclosed a cautious recalibration of its CCS investment plans. While not abandoning the technology entirely, it announced a scaling back of near-term projects as commercial conditions and customer demand have lagged initial expectations.
Relevant: Equinor Steps Back From CCS Expansion As Market Signals Weaken
According to company disclosures and reporting, CEO Anders Opedal noted that CCS markets are not yet maturing at the pace once forecast, with industrial customers pushing significant decarbonization commitments further beyond 2030, weakening demand signals for CCS infrastructure.
As a result, Equinor will delay capital allocation for new CCS facilities until clearer demand contracts and stable revenue streams are in place. The company also plans to cut overall capital expenditure by about $4 billion across 2026-27, with much of that affecting low-carbon solutions, including CCS.
Equinor’s stance illustrates a stark truth: policy frameworks alone don’t create markets. For infrastructure like CCS, with multi-billion-dollar risks and decades-long lifecycles, investors and developers need predictable cash flows, long-term offtake agreements, and confidence in regulation. Even a CCS champion will hesitate if those elements remain uncertain.
Heidelberg Materials’ Slite CCS Project in Sweden
Sweden’s Slite cement plant on the island of Gotland was poised to become one of the largest industrial CCS facilities in the region, potentially capturing up to 1.8 million tons of CO2 annually – around 4% of Sweden’s total emissions.
Yet in late 2025, Heidelberg Materials announced it was pausing the project after the Swedish Energy Agency rejected its co-financing application under the Industriklivet program, a national industrial decarbonization support scheme.
According to company statements, without continued public co-financing for implementation, Heidelberg Materials concluded that commercial conditions were insufficient to justify going forward at scale.
The company warned that Sweden could risk losing competitive positioning in cement manufacturing, potentially increasing reliance on imported cement with higher lifecycle emissions.
In this case, policy prioritization proved to be the blocker. While Sweden supports preparatory work via EU and Just Transition funds, the failure to secure key national investment capital illustrates how deeply CCS projects still depend on government backing.
Söderenergi Freezes BECCS Plans
In Sweden, municipal energy provider Söderenergi recently announced it is pausing plans for a bioenergy with carbon capture and storage (BECCS) project at its Igelstaverket biomass plant – a facility initially pitched to capture up to ~500,000 tons of CO2 per year.
Rather than advancing to full development, the company said it is stepping back “due to market uncertainty and unsettled financial conditions” that have undermined confidence in the project’s commercial viability.
Söderenergi’s experience illustrates familiar challenges seen across the region: while the technical potential of BECCS is strong, the economic signals remain weak. According to reporting, key factors behind the pause include:
- Underdeveloped carbon markets, leaving long-term revenue prospects unclear.
- Lack of sufficiently derisked subsidy frameworks at the national level to support early-stage BECCS investments.
- Financing risk borne by the developer rather than shared with government or offtake partners.
Executives at Söderenergi stressed that the pause isn’t a permanent cancellation, but rather a response to conditions that “do not yet support a sound economic case”. This reinforces a broader pattern: even projects with clear climate benefits and community backing can stall if markets, policy incentives and financing mechanisms lag behind ambition.
Three Common Themes: Policy, Markets, and Risk
What unites these four Scandinavian cases isn’t lack of ambition or technological ability – it’s structural bottlenecks:
1. Policy vs. Reality: Targets and frameworks often outstrip project timelines and commercial viability, causing mismatches that developers can’t underwrite.
2. Market Maturity: Without stable revenue mechanisms, such as carbon pricing, long-term contracts and demand mandates, industrial players can’t commit capital to multi-decade CCS assets.
3. Risk Allocation: In many tenders and schemes, risk remains skewed toward developers. Unless public mechanisms derisk investments (e.g., guaranteed storage, payment structures tied to performance), participation will remain low.
Relevant: TotalEnergies Sells CarbonVault 35% Stake In Danish North Sea CCS Project
These factors all point to broader obstacles that will shape how and how quickly CCUS can scale globally.
An industry expert closely acquainted with a number of failed and successful projects in the space identified an additional issue that could be impeding the sector’s growth, and it’s one of framing.
“Maybe if we were to treat CO2 as waste rather than a commodity, we wouldn’t have some of the problems we see today. Companies would enter the space with a different attitude and funding would also look very differently,” our source said.
Room for hope, but not without hard lessons
It would be a mistake to interpret these setbacks as evidence that CCS is failing. The Northern Lights hub continues expanding; Europe is investing in cross-border transport networks; and industrial decarbonization remains a political priority across the continent.
But Scandinavia’s recent experiences offer a clear message: scaling CCS isn’t simply about deploying technology. It is about aligning policy design, market structures, investment incentives, and risk-sharing frameworks. Without these elements working in concert, even well-funded and technically credible projects can stall.
“The industry is still going through a process of maturation, which has revealed a number of unsettling truths about the way projects are being developed and executed. Storage capacities are often inflated, unrealistic promises are made and geologic constraints are frequently disregarded,” our source shared with us some final thoughts.
“Right now, we’re undergoing a ‘shake-down’ of sorts, which is seeing weaker proposals beginning to fall away, leaving behind the more robust projects.”
As Europe and other regions continue to push toward net-zero targets, the CCS industry must internalize these lessons or risk another decade of announcements without implementation.
Read more: CCSA Warns CCUS Delays Could Drive Industry Out Of The EU
