The government of Austria has published a draft CO2 Storage Act (Kohlenstoffdioxid-Speicherungsgesetz), officially ending its 12-year ban on underground carbon storage and aligning national law with the European Union’s CCS Directive.

The proposed legislation sets an annual domestic storage cap of 3 million metric tons of CO2 per year through 2029, scaling up to 7 million tons annually between 2030 and 2034. A comprehensive review of the statutory cap is slated for mid-2033 to re-evaluate capacity needs as commercial demand evolves.

The legislation repeals the 2011 ban, which previously limited domestic storage strictly to research activities under 100,000 tons. The new draft establishes a three-stage permitting procedure, guarantees third-party access to storage infrastructure, and prioritizes long-term environmental safety.

Public consultation on the draft bill remains open through Oct. 30, 2026.

The legislative shift follows updated technical evaluations confirming the safety of geological storage, combined with rising demand for regional carbon management solutions across Austria’s hard-to-abate industrial sectors.

According to the Ministry’s explanatory text, developing domestic storage sites reduces industrial reliance on foreign storage destinations, cuts long-distance export transport costs, and provides critical investment certainty to align with Austria’s 2040 net-zero mandate.

However, market observers note that the current draft omits specific penalty provisions to enforce Net Zero Industry Act (NZIA) obligations on obligated entities required to provide CO2 injection capacity.

Despite this gap, the legislation provides a long-awaited regulatory pathway for domestic project developers to begin exploratory work and front-end engineering for onshore geological storage sites in Austria.

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