The federal cabinet adopted the key principles for a Carbon Management Strategy and draft legislation on the basis of this to amend the Carbon Storage Act today. The intention is to make it possible for Germany to use CCS/CCU and to transport CO2 and store it offshore. CO2 storage will not be permitted in protected marine areas. The strategic focus for the use of CCS will be on hard- or impossible-to-abate emissions. CCS stands for carbon capture and storage, and CCU for carbon capture and utilisation.

Says Federal Minister for Economic Affairs and Climate Action Robert Habeck: “Today is an important day for industry in Germany. By adopting the first part of the industry package, the federal cabinet has set the direction of our industry policy: it is to be possible to use CCS and CCU in Germany – otherwise, we will not be able to achieve our climate targets. At the same time, today’s cabinet decision is an important building block for our industrial competitiveness. Since presenting our proposal at the end of February 2024, we have revised the draft texts with the other ministries and taken up ideas from the hearings of the Länder and the associations.

“We will permit offshore storage; but we will explicitly exclude marine protected areas. This policy will bring us in line with our European neighbours like Norway and many other countries, and we, as the largest industrialised country in Europe, will live up to the responsibility for the way we handle greenhouse gas emissions.

“In view of the responses from the Länder, we have included an opt-in clause for the onshore storage of CO2 in the draft. This will enable individual Länder to go beyond the offshore storage permitted by federal law, and permit onshore storage in their territory.”

The drafting of the key points and the legislation is the outcome of intensive preparatory work, including a detailed dialogue process with environmental associations, the business community and academia in 2023.

The adoption of key points for a CMS by the federal cabinet today means that the Federal Government is establishing clear policy principles for the handling of CCS and CCU. In a next step, the detailed Carbon Management Strategy will be finalised.

By presenting the draft revision of the Carbon Storage Act, the Federal Government primarily aims to provide clear rules for the establishment of CO2 pipeline infrastructure and to permit the offshore storage of CO2. The draft legislation will now be forwarded to the Bundestag and the Bundesrat and discussed in the parliamentary procedure.

Background: core points from today’s cabinet decision and changes compared with the drafts from the end of February 2024

The key points of the Carbon Management Strategy and the draft legislation amending the Carbon Storage Act comprise the following main issues and the following main changes to the drafts of the two documents from the end of February 2024:

  • Since emissions in certain fields are difficult or impossible to abate, the current barriers blocking the use of CCS/CCU in Germany will be removed. These emissions are primarily caused by processes which can neither be fully avoided, nor directly switched to electricity from renewable sources or to hydrogen.
  • In order to avoid harmful GHG emissions from electricity generation, the Federal Government is banking on the accelerated expansion of renewable energy and on the capacity mechanism described in the Power Plant Strategy and, in advance of that, the new-build of gas-fired power stations which will be switched to hydrogen. For power generation facilities using gaseous fuels or biomass, the application of CCS/CCU will continue to be legally possible with a view to a technology-neutral transition to a climate- neutral electricity system.
  • The phase-out of coal will continue as planned. For this reason, emissions from coal-based energy generation facilities (i.e. power stations and combined heat and power plants) will not be granted access to CO2 pipelines and CO2 storage. In comparison with the drafts from the end of February, this represents a two-fold clarification: firstly, not only emissions from coal-fired power stations, but also emissions from coal-fired combined heat and power plants, will be excluded; secondly, the exclusion affects both access to CO2 pipelines and (a new, additional point) to CO2 storage facilities.
  • Public funding for CCS/CCU will be focused on hard- or impossible- to-abate emissions. This also makes it clear that there will be no public funding for CCS/CCU applications at power stations fuelled from fossil sources. There are basically two funding instruments available: CCS/CCU projects are to be eligible for funding in the second bidding procedure for carbon contracts for difference, and the “funding guideline for federal funding for industry and climate action” (BIK), which is currently being finalised, envisages the introduction of a funding module for CCS/CCU.
  • The ramp-up of CCS/CCU must be in harmony with the greenhouse gas reduction targets set by the Federal Climate Change Act and the attainment of climate neutrality in 2045. As laid down in the coalition agreement, the Federal Government will, in dialogue with companies, seek solutions as to how operating licences can be issued for fossil fuel energy infrastructure (power plants or gas pipelines) in a way which ensures, with legal certainty, that they can only continue to operate beyond 2045 using non-fossil fuels, without this triggering a halt to investment, stranded investments and compensation claims.
  • In order to be able to make a start on the construction of privately run CO2 pipelines within a state regulatory framework, the Carbon Storage Act will be updated in line with the Federal Government’s proposals in the evaluation report from the end of 2022. Unclear areas of law relating to the application of the Act will be remedied. Specifically, the draft sets up a uniform approval system for CO2 pipelines. Also, the draft includes a number of more specific provisions to speed up approval procedures for the construction of CO2 infrastructure. For example, authorities which have to be involved in the approval process must submit their comments within short deadlines. In the event of legal disputes, the Higher Administrative Court will be the court of first instance.
  • The Federal Government will ratify the amendment to the London Protocol to make CO2 exports possible for the purpose of offshore storage, and will make the necessary amendments to the High Seas Dumping Act.
  • Legislation will be passed to permit the investigation of offshore storage sites in Germany’s exclusive economic zone (EEZ) and on its continental shelf. If a site is demonstrably suitable, taking safety standards, ecological criteria and spatial planning decisions into account, corresponding storage facilities can be developed for industrial use. Storage of CO2 will not be permitted in protected marine areas; the provisions on this are made more specific compared with the draft legislation from the end of February. For example, the injection of CO2 into protected marine areas and in a 8 km buffer zone around them will be prohibited, storage beneath such protected areas will be banned, and further measures will be taken to protect porpoises.
  • The permanent storage of CO2 in the geological underground on German (onshore) territory will still not be permitted by the federal legislation. However, in response to comments from the Länder, the draft from February 2024 is amended to offer a statutory basis for an opt-in by specific Länder for the permanent storage of CO2 in underground geological formations in the onshore territory of the specific Land, where the Länder adopt their own legislation permitting this. Separately from this, onshore storage for research purposes is made possible in the whole of Germany.

More information

Further information can be found on the website of the Federal Ministry for Economic Affairs and Climate Action: