Austria moves to lift CO2 storage ban

September 26, 2026

Austria is preparing to end its long-standing ban on underground carbon dioxide storage, potentially clearing a major regulatory hurdle for large-scale Carbon Capture and Storage (CCS) projects and Bioenergy with Carbon Capture and Storage (BECCS).

The Austrian federal government has advanced draft legislation that would reverse the prohibition introduced in 2011. The proposed change represents a significant shift in the country's carbon management strategy as Austria works toward its goal of achieving climate neutrality by 2040.

For more than a decade, restrictions on geological CO2 storage have limited the development of domestic CCS projects. Under the proposed framework, captured carbon dioxide could be permanently stored underground, particularly when it originates from industrial activities where emissions are difficult or impossible to eliminate using existing technologies.

CO2 storage Ffocused on hard-to-abate industries

Austria is not proposing unlimited use of carbon capture and storage. Instead, the draft legislation would prioritize unavoidable residual emissions from sectors that face significant technical challenges in fully decarbonizing.

Industries likely to benefit include cement, steel, paper and ceramics manufacturing, where some emissions result directly from industrial processes rather than simply from fossil fuel consumption.

The legislation would also impose an annual limit on the use of geological carbon storage. Carbon dioxide removed from the atmosphere and permanently stored through the system would be capped at the equivalent of 5% of Austria's total human-caused greenhouse gas emissions.

This approach is intended to position CCS as a targeted climate solution rather than a mechanism for allowing widespread fossil fuel emissions to continue.

BECCS could support negative emissions

The proposed framework could be particularly important for Austria's emerging BECCS sector.

BECCS combines bioenergy production with carbon capture technology. Carbon dioxide released during the processing or combustion of biomass is captured before entering the atmosphere and then permanently stored underground.

Because plants absorb CO2 while growing, permanently storing this biogenic carbon can potentially remove more carbon dioxide from the atmosphere than the overall process releases. This means BECCS can generate negative emissions rather than simply preventing additional emissions.

Under Austria's proposed rules, qualifying bioenergy facilities could gain access to geological storage capacity, creating new opportunities for carbon removal projects.

Austria has significant underground CO2 storage potential

Austria may have substantial geological resources suitable for permanent carbon storage.

Scientific estimates referenced in the draft legislation suggest that hydrocarbon-bearing geological formations could accommodate approximately 150 million to 250 million tonnes of CO2 equivalent.

The country's deeper saline aquifers could provide considerably greater capacity, potentially exceeding 1 billion tonnes of CO2 equivalent.

These estimates indicate that Austria's geological storage potential could ultimately support considerably more CCS and BECCS activity than permitted under the proposed 5% emissions limit.

Future governments could therefore have room to expand carbon storage if climate policy, technological development and environmental safeguards support broader deployment.

EU carbon market could strengthen the business case

Austria's planned carbon storage framework would also interact with the European Union Emissions Trading System (EU ETS).

Companies covered by the EU ETS are generally required to surrender allowances corresponding to their regulated emissions. Permanently capturing and storing qualifying CO2 could reduce the amount of carbon released into the atmosphere and, under applicable EU rules, potentially reduce associated allowance obligations.

As carbon prices increase, this could strengthen the economic case for investing in capture infrastructure, CO2 transport networks and geological storage.

BECCS projects could have an additional advantage because permanently stored biogenic CO2 represents potential carbon removal.

Demand for high-quality, independently verified carbon removals is growing as companies and governments look beyond avoided emissions toward solutions capable of physically removing CO2 from the atmosphere. However, the treatment and monetization of such removals depends on the rules of the relevant voluntary or regulated carbon market.

Public consultation on Austria's CO2 storage law

The proposed Carbon Dioxide Storage Act has entered public consultation as part of a broader package of Austrian climate legislation.

The package also includes a new Climate Act and changes to environmental impact assessment requirements.

Businesses, industry organizations, environmental stakeholders and members of the public have until the end of October 2026 to provide feedback on the proposals. The legislative package is then expected to move forward for consideration by the Austrian Parliament.

If adopted, ending the geological CO2 storage ban would represent a major change in Austria's climate policy. It could provide hard-to-abate industries with another decarbonization option while creating the regulatory foundation for BECCS and other carbon-removal technologies.

With potentially more than 1 billion tonnes of underground storage capacity available in saline formations alone, Austria could eventually develop a substantial domestic carbon storage sector. For now, however, the proposed 5% limit signals that the government intends CCS to complement emissions reductions rather than replace them.