IOGP Europe input to the Call for Evidence on CO2 market and infrastructure

To meet the EU climate 2050 neutrality objective, a robust and interoperable CO₂ transport infrastructure is essential. The European Commission’s forthcoming regulatory package on CO₂ markets and infrastructure presents a crucial opportunity to ensure a well-designed, investment-friendly framework that supports early deployment while laying the foundation for a stable, long-term CO₂ market.

This is particularly relevant in light of the Net-Zero Industry Act (NZIA) obligation to deliver at least 50 million tonnes per annum (Mtpa) of operational CO₂ injection capacity by 2030, where the establishment of an appropriate CO₂ transport regulatory framework will be essential to achieving this target. At the same time, careful consideration is needed to ensure that such measures do not prematurely shape or constrain the development of the market before it reaches full maturity.

This position paper outlines the key challenges to CO₂ infrastructure uptake and identifies core elements to be addressed in the regulatory framework. IOGP Europe calls for a phased, flexible, and market-oriented approach, balancing early-stage public support with long-term private investment and avoiding rigid, unsuitable regulation at this nascent stage.

Main recommendations:

1. Establish EU-level support mechanisms to lower the cost of capital, improve project bankability, and enable the emergence of a self-sustaining CO₂ market, including targeted de-risking instruments to mobilize private investment, and adapting and expanding EU funding instruments such as Connecting Europe Facility (CEF) and Innovation Fund that prioritize cluster-based approaches to deliver economies of scale.
2. Allow Member States discretion to implement tailored measures to reflect national market maturity, industrial structure, and regional circumstances, ensuring proportionate and effective outcomes.
3. Adopt a phased approach that evolves in line with market maturity, avoiding creating premature market structures that risk deterring investment for the nascent CO₂ market.
4. Design a legislative framework that differentiates transport and storage, recognizing their distinct risk profiles, market dynamics, and type of investors.
5. Limit regulatory requirements in the early stages of the market, thereby fostering competition and incentives for private investment.
6. Enable carbon capture and storage (CCS) deployment by streamlining permitting with enforceable deadlines, digital tools, and one-stop shops, while strengthening cross-border integration through mutual recognition of permits, joint planning, and carbon pricing alignment (e.g. EU–UK ETS).
7. In the short term, focus on developing high-level guidance for technical CO₂ standards while the markets ramp up, leaving CEN-CENELEC with the leading role in standards development.
8. Ensure grandfathering clauses to safeguard early investments and first movers, preventing delays from regulatory requirements (e.g, CO₂ specifications), unless clearly justified. It should also apply where national frameworks are already underway, ensuring EU rules build on existing progress and enable a coherent and proportionate regulatory transition.