CCS Europe submits its response to the European Commission's public consultation on the CO2 storage target under the Net-Zero Industry Act
CCS Europe welcomes the opportunity to comment on the European Commission’s approach to the CO2 storage target under the Net-Zero Industry Act (NZIA), and to help guide its work on implementing the CO2 injection capacity obligation for the oil and gas sector. This draft Delegated Act goes in the right direction and certainly will play a significant role in boosting the EU’s storage capacity – and enabling Europe to reach its annual injection capacity target.
We urge the Commission to quickly finalize this delegated act without reducing the quality of the content and to ensure that the deadline of June 30, 2025, for obligated companies to submit their plans is maintained. Each day passing by brings us closer to 2030, narrowing the window to successfully deploy the storage projects – and setting up a vital part of the EU’s CCS value chain. According to the International Energy Agency, developing a CO2 storage project from inception to completion can take anywhere from 3 to 10 years, depending on the availability of geological data and other critical information. Given this lengthy process, swiftly implementing detailed obligations is essential to ensure that storage solutions are available in time. Therefore, we urge the Commission to accelerate its efforts and guarantee the comprehensive and effective implementation of the CO2 storage targets.
Regarding the content of the proposed Delegated Act, CCS Europe asks the Commission to address the following points:
1.Exemptions (Article 3)
Unfortunately, the proposed Delegated Act does not specify the maximum thresholds of oil and gas production under which a company would be exempt from the obligation to contribute. This information is an essential point for the legislative act and should have been disclosed as part of the public consultation for transparency reasons.
Further, we recognise that it is important to avoid imposing burdensome obligations on small European producers if the benefits are limited. However, excluding producers above the threshold simply because their market share is too small could hinder the achievement of the target by reducing the number of contributors supporting the development of CO2 storage projects.
2. Reporting requirements (Article 5)
The outlined reporting requirements are essential for oil and gas companies to demonstrate their progress. In addition to being key to monitoring the implementation of the legislation, they also have the potential to become critical for the Commission to obtain the information and data on storage and transport of CO2 it needs to build the upcoming regulatory framework for transport. Therefore, it is important that the level of obligation in this article is not diminished.
In addition, we urge the Commission to strengthen the article by incorporating a requirement for oil and gas producers to provide (i) additional information on the current maturity of projects and data acquisition related to those projects as well as (ii) greater clarity on the uncertainty and methodology surrounding their storage capacity projections. These are necessary failsafe to ensure the viability of storage potential projections and can act as an early warning system against inaccuracies in storage capacity predictions.
3. Penalties (new Article)
It is vital that Member States impose significant disincentives for non-compliance with the obligation to contribute to the CO2 storage target. Currently, the Net-Zero Industry Act allows Member States to set these penalties, but the Commission has not specified how these penalties should be determined. Establishing clear guidelines for penalties is crucial to ensure that oil and gas companies make the necessary investments to meet their obligations. CCS Europe therefore urges the Commission to define how Member States should set their penalties and to establish a minimum requirement. This provision is essential to uphold the integrity of the obligation and ensure its effective implementation.