Is Europe’s CO₂ storage legislation too ambitious or just what we need?

On May 22, the European Commission made a groundbreaking announcement that could redefine the future of climate action in Europe. Under the Net-Zero Industry Act (NZIA), a new mandate requires oil and gas producers—who accounted for 95% of the EU’s crude oil and natural gas production between 2020 and 2023—to develop significant CO₂ storage capacity by 2030. This ambitious move targets a collective CO₂ injection capacity of 50 million tonnes per year (mtpa) and places the responsibility squarely on the shoulders of 44 upstream companies identified in Annex 1 of the Commission’s Decision. 

Why this CO₂ storage legislation matters for climate action

Europe’s CO₂ storage legislation marks a pivotal shift in Europe’s approach to carbon capture and storage (CCS). By turning CO₂ injection infrastructure from an option into a legal obligation, the EU has set a clear and urgent course for decarbonisation.  

Here’s why it’s a monumental shift: 

• Certainty for CCS projects: For the first time, developers now have a stable regulatory framework anchoring demand for CCS projects, encouraging investment and reducing project risk. 

• Cross-border collaboration: The legislation paves the way for partnerships across EU country borders, enabling shared storage solutions and fostering unity in climate action. Countries like Denmark and France have already signed arrangements to facilitate cross-border CO₂ transport and storage.  

• Industry accountability: By tying specific injection capacity quotas to historical production figures, the EU ensures that major emitters take ownership of their role in combating climate change. 

The legislation also establishes transparency requirements, mandating that Member States make data on potential CO₂ storage sites publicly available and requiring entities to share geological data from decommissioned sites. This creates an unprecedented level of openness in the carbon storage market. 

The role of oil and gas producers in Europe’s CO₂ storage mandate

Europe’s CO₂ storage legislation flips the narrative for oil and gas producers across Europe. They must align their CCS strategies with EU regulatory timelines, invest in or partner with experienced storage developers to build capacity efficiently, and embed CO₂ injection planning into the heart of their operations. The days of treating carbon management as a nice-to-have are officially over. 

The legislation provides flexibility in how companies can meet their obligations. They can invest in or develop CO₂ storage projects alone or in cooperation with others, enter into agreements with other obligated entities, or partner with third-party storage project developers. This flexibility is crucial, as it recognizes that not every oil and gas producer needs to become a storage operator overnight. 

It is imperative to adopt a systems perspective, linking emitters with storage developers to comprehensively assess end-to-end performance and specifications. With this in mind, the new legislation could prove to deliver advancements in capture technologies by offering a practical storage solution for the captured CO2, addressing the current issue and bottleneck of insufficient storage options. 

How Europe’s CO₂ storage mandate affects the UK CCS industry

Europe’s new CO₂ storage legislation represents a bold leap towards realising its net zero ambitions. By making CCS mandatory, the EU has created a framework that not only drives immediate action but also builds the foundation for a decarbonised industrial economy. 

As the CO₂ storage ecosystem expands, collaboration, innovation, and strategic planning will be key to ensuring success. The UK must align its CCS strategies with this transformative movement, leveraging its infrastructure, expertise and partnerships to stay at the forefront of global decarbonisation efforts.  

So we can deliver this ambition collectively, NZTC is seeking your input to identify challenges, co-create solutions and drive meaningful impact in the CCS sector: Complete our innovation priority survey here. Together, we can refine a ten-year technology roadmap that aligns with the industry’s needs and priorities. 

This isn’t just a policy change in Europe; it’s a wake-up call for the industry. The message is clear: Europe is no longer debating the need for CO₂ storage—it’s acting on it. Let’s deliver this together.