We recently enjoyed a highly engaging discussion led by James Cogan, Danube Carbon. Cogan offered an unfiltered look at the realities of developing a commercially viable CCS project where progress is rarely linear and certainty is in short supply.
A Hungarian CCS Project Tests Europe’s Climate Logic
Carbon capture and storage (CCS) is no longer a question of engineering feasibility. It is a test of economics, regulation, and public consent.
That was the clear message from a candid discussion hosted by the Scottish Energy Forum, where James Cogan, commercial director of Danube Carbon, laid out the realities of building one of Europe’s most advanced onshore CCS projects. The session stripped away some of the abstraction that still surrounds carbon management and replaced it with the hard mechanics of industry, finance, and geology.
For more than a decade, Cogan has worked at a large biorefinery in central Hungary, processing over 1.5 million tons of maize and barley each year into ethanol, renewable gas, animal feed, and food ingredients. Along the way, the plant produces a constant by-product: carbon dioxide.
In fact, it produces a great deal of it- around 600,000 tons of pure, biogenic CO₂ annually.
“For every ton of ethanol, you get roughly a ton of CO₂,” Cogan explained. “The gas is clean, it’s already separated, and it’s essentially free.”
Free, however, does not mean useful. Europe’s industrial demand for CO₂ is limited, and much of the market is already supplied by naturally occurring sources. For years, the gas vented into the atmosphere with no commercial consequence and no regulatory penalty because biogenic CO₂ is treated as carbon-neutral under EU rules.
That changed when the company began asking a different question: not who might want the CO₂, but where it could go.
Carbon Storage Beneath the Factory Floor
The answer lay underground.
The biorefinery sits atop the Pannonian Basin, a vast geological formation rich in deep saline aquifers. Desk research, followed by work with Hungary’s Geological Survey, confirmed that the site met all the key criteria for carbon storage: depth, capacity, sealing layers, and minimal seismic risk.
A strikingly simple concept emerged. The capture of CO₂ directly from two pipes on site, compress, transport it a short distance, and inject it into the saline aquifer between 800 and 1,500 metres below ground.
“It’s almost a child’s drawing of CCS,” Cogan said. “Capture, transport, storage – one site, one operator, one system.”
That simplicity is also the project’s main advantage. While offshore CCS efforts such as Norway’s Northern Lights project have required hundreds of kilometres of pipelines, shipping terminals, and floating infrastructure, the Hungarian model avoids much of that complexity. The result is a dramatically lower cost per ton of storage, potentially twenty to thirty times cheaper than large offshore schemes.
Backed by a €50 million grant from the EU Innovation Fund, Danube Carbon has since secured one of Europe’s first onshore CCS exploration permits and formed a joint venture with an experienced oil and gas operator to manage the subsurface work. The project is now preparing to drill its first appraisal well.
The Barrier Is Not Technology
From a technical perspective, little of what Cogan described would surprise a petroleum engineer. Injection wells lined with corrosion-resistant steel, impermeable cement, supercritical CO₂ flowing under high pressure, and extensive monitoring through seismic surveys, satellite imaging, and dedicated observation wells are all established practices.
“None of this is proprietary,” he said. “There’s no secret technology here.”
What is missing is a reliable way to pay for it.
Capital expenditure for the project is estimated at around €80–100 million, with operating costs dominated by electricity for compression. Over a ten-year period, total costs approach €250 million. Without revenue, the economics do not work no matter how efficient the engineering.
For years, proponents of CCS pointed to the voluntary carbon market as a solution. But in practice, that market remains small, volatile, and heavily concentrated. Last year, a single buyer – Microsoft – accounted for the majority of purchases. For projects operating at hundreds of thousands of tons per year, symbolic demand is not enough.
“Without large, long-term buyers, the numbers don’t stack up,” Cogan said.
Hope now rests on regulation rather than goodwill.
Under the EU’s Net Zero Industry Act, dozens of large oil and gas companies are obligated to contribute CO₂ injection capacity toward a bloc-wide target of 50 million tons per year by 2030. While Danube Carbon itself is not an obligated entity, it suddenly finds itself in possession of something many others lack: a permitted, near-ready storage site.
In theory, those companies could meet part of their obligation by investing in or contracting with projects like this one. In practice, many have challenged the regulation in court, arguing that it is impossible to comply with on the timeline set.
Germany is one of the few countries to outline strict enforcement mechanisms, including hefty financial penalties for non-compliance. If those penalties materialise, Cogan suggested, the commercial logic of buying into an existing project could become compelling.
“If they believe the fines will happen, this becomes a bargain,” he said.
Social Licence
One of the more surprising elements of the project has been its reception at home. CCS proposals elsewhere in Europe have faced public opposition, NGO resistance, and political volatility. In Hungary, the response has been muted but broadly positive.
The company held town hall meetings, engaged local authorities and farming groups, and conducted extensive public outreach during seismic surveying. The resulting opposition has been minimal.
Cogan attributes this partly to Hungary’s familiarity with onshore drilling and geology, and partly to the project’s visibility and transparency. Still, he is acutely aware that public opinion can change quickly, particularly if CCS becomes politicised.
“In Ireland,” he remarked, “you couldn’t even attempt this. Facebook groups would spring up overnight.”
Feasibility?
If all goes to plan, Danube Carbon could begin injecting CO₂ by the end of the decade. Whether it succeeds will depend less on compressors or rock formations than on regulation, capital markets, and trust.
The technology, as Cogan made clear, is ready. What remains unresolved is who will pay…and who will agree that this is worth doing.
Until those questions are answered, CCS in Europe will hover in an uncomfortable space: technically proven, economically fragile, and politically uncertain.