Carbon capture and storage aims to reduce carbon dioxide emissions to the atmosphere by capturing carbon dioxide from industrial processes, transporting it via pipeline, and injecting it deep below ground level in geological formations.

The legal framework applying to the carbon capture and storage has been defined by Directive 2009/31/EC of April 23, 2009, on the geological storage of carbon dioxide. This Directive applies to all carbon capture and storage projects located in the territory of EU Member States, except for geological storage with a total storage intended below 100 kilotons for purposes of research and development or testing of new products and processes. Storage sites must obtain a permit, and their operator must provide financial security. At the time of closure, provided that certain conditions are met and in particular that the operator has provided the required financial contribution, future responsibility for the storage site would transfer to a competent regulatory authority.

Directive 2009/31/EC also modifies several other EU directives, by including geological storage of carbon dioxide within the scope of theIPPC Directive and the Environmental Liability Directive. However, the Directive excludes geological storage of carbon dioxide from the scope of Directive 2006/12/EC on waste and Regulation 1013/2006 on shipments of waste, which means that captured carbon dioxide should not be considered a waste in the EU. Member States have until June 25, 2011, to adopt the national measures implementing the Directive, which also bans the storage of carbon dioxide in the water column.

Directive 2009/29/EC of April 23, 2009, added the capture of carbon dioxide from installations covered by the EU's greenhouse gas "cap and trade" system, known as EU-ETS, along with the transport of carbon dioxide by pipelines for geological storage, to Annex I of the EU-ETS Directive. Beginning in 2013, these activities (like those in the energy and aviation sectors) will have to surrender emissions allowances to cover their carbon dioxide emissions, such as leakage of carbon dioxide from the pipeline or storage site. Although the Directive provides that carbon capture and storage activities will not receive any free emissions allowances, such projects are included in the list of priorities for which at least 50 percent of the revenues from the auctioning of allowances, or the equivalent in financial value of those revenues, should be used to provide development assistance.

Furthermore, to encourage facilities subject to the EU-ETS to use carbon dioxide storage, carbon dioxide emissions that are verified as captured and transported for permanent storage will not be counted in determining the number of emissions allowances the generating facility is required to surrender each year. Thus, facilities that reduce their regulated emissions via carbon capture and storage could save money by purchasing fewer allowances or make money by selling excess allowances on the EU carbon market.