Germany moves forward with Carbon Management: Amended CO₂ Storage Act takes final step in the legislative process
11 min read
On 28 November 2025, the amendment of the Carbon Dioxide Storage and Transport Act (CCS Act)1, came into force.2 It sets the scene for building infrastructure for carbon capture and storage (CCS) in Germany on an industrial scale.
Overview
According to the German Federal Climate Protection Act (Klimaschutzgesetz) Germany must achieve net greenhouse gas neutrality by 2045.3 Against this backdrop, the CCS Act is intended to lay the legal foundation for the industrial build-up and use of Carbon Dioxide Capture and Storage (CCS) infrastructure and technologies in Germany. It marks a transition in German climate change policy which now adds CCS as a new instrument, instead of only focusing on measures to reduce CO₂ emissions. While the old CCS Act focused solely on research, testing and pilot activities, the amended CCS Act allows for commercial, large-scale deployment of carbon dioxide storage, primarily in the maritime domain. The technology is primarily intended to ensure that unavoidable or hardly avoidable emissions which for instance may occur in the cement, lime and in other basic raw material industries (chemicals, metals, etc.) or in waste incineration, are stored safely and permanently.4
CCS in a nutshell
CCS refers to capturing CO₂ from industrial or energy-related emissions, transporting it to a designated site and storing it there so it remains permanently isolated from the atmosphere. Closely related to CCS is CCU (Carbon Dioxide Utilisation) which refers to the use of the captured carbon compounds, in which the carbon is fed into at least one further utilisation cycle, for instance in products. The CCS Act focusses on providing a legal basis for CCS infrastructure and technology, while promoting CCU by outlining the permitting process for CO2 pipelines.
Background
The implementation of the EU CCS Directive5 in 2011 caused considerable debate. The concerns expressed back then revolved, inter alia, around aspects such as the potential impermeability of storage sites and potential environmental impacts due to drinking water contamination.6 The result of the debate was a severe restriction of the scope of application of the CCS Act, mainly to testing and demonstration purposes.
In 2022, new impetus came from the German government's evaluation report on the Carbon Dioxide Storage Act which made clear that the use of CCS and CCU on a significant scale was necessary to achieve climate targets.7 Further momentum was added in mid-2024 by the EU Net-Zero Industry Act8 as part of the EU Green Deal Industrial Plan. Article 20(1) of this Regulation proclaimed the binding Union level objective of an annual CO2 injection capacity of at least 50 million tonnes by 2030, a target for which each EU Member State shall make all reasonable efforts to develop the necessary CO2 transport infrastructure (Article 22(1) of the Regulation). Beyond that, authorised oil and gas producers are required to make individual contributions to the operational CO2 injection capacity based on their share of total EU production (Article 23(1) sentence 1 of the Regulation).9 Furthermore, discussions are already underway at EU level that the declared target will have to be increased to around 280 million tonnes by 2040.10 In light of this, the CCS Act creates a building block for achieving the EU-wide CCS capacity target and enables regulated companies operating in Germany11 to contribute their share to this via the appropriate infrastructure.
Highlights
According to the Federal Ministry of Economics, the legislative changes are intended in particular to secure Germany’s competitiveness as a business location and investment in it.12 In order to achieve these objectives, the CCS Act contains a catalogue of measures that can be summarised in the following five key points:
Construction of offshore CO2 storage facilities: Carbon dioxide storage sites may be approved for the first time if they are located largely within the exclusive economic zone and the continental shelf (Section 2(3) sentence 1 CCS Act). The injection of carbon dioxide in coastal waters is principally prohibited (Section 2(3) sentence 2 CCS Act). However, planning permission may also be granted if up to one quarter of the rock strata intended for storage is located within the coastal sea area (Section 13(1) no. 9 lit. f CCS Act). The admission requirements previously stipulated in Section 2(2) regarding the application deadline and maximum total storage capacity no longer apply under the new CCS Act.
"Opt-in" regulation for onshore storage by federal states: Although the construction of onshore storage facilities remains in principle excluded, the German federal states may determine for their territory that permanent storage of carbon dioxide is also permissible in geological formations on the territory of the German mainland (Section 2(5) sentence 1 CCS Act). This "opt-in" clause shall enable federal states to make flexible decisions on onshore use, taking into account factors such as regional acceptance, safety and environmental impact.13
Exclusion of CO2 emissions from coal-fired power stations from access to infrastructure: Operators of carbon dioxide pipeline networks and carbon dioxide storage facilities are generally obliged to refuse companies connection, as well as access, if the carbon dioxide to be absorbed has been produced by the combustion of coal in Germany (Section 33(5) sentence 1 CCS Act). This is to ensure that the CCS Act provides no further incentive to rely on the combustion of coal in Germany. However, the CCS Act does not exclude that CO2 emissions stemming from coal combustion in other countries that may be passed through to Germany.14 In practice, this may pose difficulties to differentiate; further detailed regulation(s) on this is to come. Despite advice to the contrary from the Federal Council, fossil gas-fired power stations are still included, i.e. connection to a carbon dioxide pipeline network and access to carbon dioxide storage must be granted which shall ensure that operators can decide on economic criteria whether they use hydrogen-compatible gas-fired power stations or gas-fired power stations in conjunction with CCS. Section 4(1) sentence 5 CCS Act contains a refutable presumption that in cases where hydrogen pipelines and carbon dioxide pipelines are laid in parallel, predominantly in the same route or directly adjacent to each other, there is no additional impairment of other interests.15 The debate is not over – a joint protocol statement by the states of Bremen and Schleswig-Holstein, attached to the Federal Council decision of 21 November 2025, indicates that the northern German states in particular fear that this will jeopardise the ramp-up of the hydrogen core network.16 At the same time, however, the explanatory memorandum to the CCS Act states that the acceleration of the hydrogen economy will continue to be given priority alongside the CCS infrastructure and that, accordingly, there must be no significant hindrance to the construction and operation of hydrogen pipelines.17
Overriding public interest in CO2 pipelines and storage projects: The construction, operation and modification of carbon dioxide pipelines and storages are in the overriding public interest (Section 4(1) sentence 3 and Section 11(1) sentence 2 CCS Act) which reflects the particular interest in establishing an infrastructure for CCS in Germany.18 As a consequence, CO₂ infrastructure projects are typically accorded priority, particularly over nature and environmental protection concerns during decision-making.
Accelerated approval procedures and planning processes: Instead of a planning approval decision, planning permission may be granted in accordance with Section 74(6) Administrative Procedure Act (Verwaltungsverfahrensgesetz, VwVfG), which in turn eliminates the time-consuming formal public participation process required under Section 73 VwVfG (Section 4(5) CCS Act). Moreover, in the future, all CO₂ pipelines regardless of whether they are intended for storage or utilisation will be authorised under a single, uniform regulatory framework (Section 4a). Approvals for the construction, modification and operation of gas, hydrogen and product pipelines, including the facilities necessary for operation, may also be considered as approvals for the transport of carbon dioxide under certain circumstances (Section 4a(2) sentence 1 CCS Act). For projects involving the construction, operation or modification of carbon dioxide pipelines, the authorities involved shall give priority to the planning approval and plan approval procedures (Section 4a(5) sentence 1 CCS Act).
Implications for Businesses
The amended CCS Act creates a clear and uniform legal framework for CCS infrastructure and technology on an industrial scale for the first time in Germany. The CCS Act and parallel legislative changes such as the draft amendment to the High Sea Disposal Act (Hohe-See-Einbringungsgesetz)19, will establish a first legal framework for offshore CO2 storage in the seabed and enable carbon dioxide streams to be exported to other countries for the purpose of disposal in appropriate locations.20
The CCS Act goes hand in hand with the EU Net-Zero Industry Act. The CCS Act foresees that further detailed regulation is to come (Section 25(4) CCS Act) which will regulate CO2 injection capacity contributions of companies which shall implement the EU Net-Zero Industry Act.21
The classification of CO₂ infrastructure as being of 'overriding public interest’ speeds up approval procedures and gives greater legal certainty. Moreover, companies will in future be able to transport CO₂ on a large scale via pipeline networks and store it in offshore storage facilities. The possibility of repurposing existing gas, hydrogen and product pipelines facilitates infrastructure development and market entry. The provision on granting connection and access to the carbon dioxide pipeline network and carbon dioxide storage facilities for other companies promotes cooperation and joint infrastructure projects.
The opt-in regulation for onshore storage could lead to a patchwork quilt when individual federal states have different requirements or do not allow onshore storage at all. With regard to offshore storage, various environmental and nature conservation requirements must be observed.
At the same time, companies may have to reckon with high investment costs22, while government support structures and access to innovation funds have not yet been finalised.23 However, it should not be overlooked that in October, Minister for Economic Affairs Katherina Reiche (CDU) announced a funding program for 2026 worth an estimated six billion euros, which also includes CCS and CCU technologies.24 In addition, funding for CCS and CCU is increasingly available at EU level as well.25
1In German „Kohlendioxid-Speicherungs- und Transportgesetz" (KSpTG).
2 Federal Law Gazette, Act amending the Carbon Dioxide Storage Act, BGBl. 2025 I No. 282 https://www.recht.bund.de/bgbl/1/2025/282/VO (8 December 2025).
3 A few days ago, the Council and the EP reached provisional agreement on a binding interim climate target for 2040, namely a 90% reduction in net greenhouse gas emissions compared to 1990 levels, see https://www.consilium.europa.eu/en/press/press-releases/2025/12/10/2040-climate-target-council-and-parliament-agree-on-a-90-emissions-reduction/.
4 Federal Parliament, Carbon dioxide capture and storage becomes possible https://bundestag.api.proxy.bund.dev/dokumente/textarchiv/2025/kw45-de-kohlendioxid-speicherung-1116742; Federal Government, The way is clear for carbon dioxide storage https://www.bundesregierung.de/breg-de/aktuelles/speicherung-von-kohlendioxid-2376946 (8 December 2025).
5 Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009, L 140/114 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32009L0031.
6 Federal Parliament, No agreement on the benefits of CCS technology https://www.bundestag.de/webarchiv/textarchiv/2011/34372526_kw19_de_ccs-205318; Federal Parliament, Pros and cons of underground carbon dioxide storage https://www.bundestag.de/webarchiv/textarchiv/2011/34311885_kw19_sp_ccs-205276.
7 Federal Parliament, Federal Government evaluation report on the Carbon Dioxide Storage Act, Federal Parliament Printed paper 20/5145, p. 20 https://dserver.bundestag.de/btd/20/051/2005145.pdf.
8 Regulation (EU) 2024/1735 of the European Parliament and of the Council of 13 June 2024 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202401735.
9 The Commission Decision (EU) 2025/1479 of 22 May 2025specifies the CO2 injection capacities that 44 oil and gas production companies must achieve by 2030, measured in kilotonnes per year: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202501479.
10 European Commission, Commission sets out how CO2 can be sustainably captured, stored and used to achieve climate neutrality by 2050, press release dated 6 February 2024 https://ec.europa.eu/commission/presscorner/detail/de/ip_24_585.
11 Annex 1 of the Commission Decision (EU) 2025/1479 of 22 May 2025.
12 Federal Ministry of Economics, Federal government paves the way for CO₂ storage and utilisation (CCS and CCU), press release dated 6 August 2025
https://www.bundeswirtschaftsministerium.de/Redaktion/DE/Pressemitteilungen/2025/08/20250806-bunderegierung-ebnet-weg-fuer-co2-speicherung-nutzung-ccs-ccu.html.
13 Federal Parliament, Draft bill of the federal government to amend the Carbon Dioxide Storage Act, Federal Parliament Printed paper 21/1494, p. 41 https://dserver.bundestag.de/btd/21/014/2101494.pdf.
14 Fn. 13, p. 58/59.
15 Fn. 13, p. 44.
16 The Senator for the Environment, Climate and Science of Bremen, https://www.senatspressestelle.bremen.de/pressemitteilungen/bedenken-zum-co2-speicherungsgesetz-477575?asl=bremen02.c.732.de.
17 Fn. 13, p. 28.
18 Fn. 13, p. 43.
19 Federal Council, Statement by the Federal Council on the Draft of the First Act Amending the High Sea Disposal Act, Federal Council Printed paper 561/25 (decision) https://www.bundesrat.de/SharedDocs/drucksachen/2025/0501-0600/561-25(B).pdf?__blob=publicationFile&v=1.
20 Federal Council, Draft bill of the Federal Government, Federal Council Printed paper 561/25, p. 1 https://www.bundesrat.de/SharedDocs/drucksachen/2025/0501-0600/561-25.pdf?__blob=publicationFile&v=1.
21 See Fn. 11.
22 Opinion BDI, Federal Parliament Printed Paper 20(25)717, p. 4 https://www.bundestag.de/resource/blob/1027586/Stellungnahme_BDI.pdf.
23 Federal Council, Statement on the draft bill to amend the Carbon Dioxide Storage Act, Federal Council Printed paper 379/25, p. 10 https://www.bundesrat.de/SharedDocs/drucksachen/2025/0301-0400/379-25(B).pdf?__blob=publicationFile&v=1.
24 Reuters, Germany launches 6 billion euro industrial decarbonisation program, includes CCS technology https://www.reuters.com/sustainability/climate-energy/germany-launches-6-bln-eur-industrial-decarbonisation-program-includes-ccs-2025-10-06/.
25 European Commission, What is the Innovation Fund? https://climate.ec.europa.eu/eu-action/eu-funding-climate-action/innovation-fund/what-innovation-fund_en.
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