Press Release: Statement in reaction to the Delegated Regulation on the calculation of obligated entities’ contributions and their reporting obligations under the NZIA

Brussels, 13 June 2025: The Delegated Act (DA) brings some clarity, but introduces a threshold that creates unfair conditions for obligated entities. It also introduces additional reporting burdens on obligated entities and leaves out critical implementation details needed by project developers. Even with a solid enabling policy framework, the mandated target of 50 Mtpa of operational injection capacity by 2030 is out of reach.

General observations

Shortly after the publication of the Delegated Act, the European Commission disclosed that Member States estimate CO₂ injection capacity will range between 27 to 45 Mt CO₂ per year in 2030 while CO₂ capture plans are estimated at 42Mt, subject to funding, permitting, and social acceptance conditions being met. In reality, both capture and storage projects will be well below the Net Zero Industry Act’s 50Mt target by 2030. Without a policy push to create sufficient demand and the necessary transportation infrastructure, this Act creates a financial burden rather than ensuring a much-needed CO₂ storage solution, an objective we share.

In light of this, we call on the European Commission to:

• Consider Final Investment Decision (FID) as the general, principal compliance milestone for the obligation to develop CO₂ injection capacity.
• Allow storage capacity in Norway and the UK – as soon as the UK and EU ETS systems are connected – to count towards the target.
• Introduce greater flexibility in compliance frameworks.
• Introduce enabling de-risking mechanisms and lead markets aimed at increasing demand for CO₂

Comments on the NZIA Delegated Regulation and Commission Decision

We welcome the reassurance provided under Article 5(3) that confidential and classified information will be protected and will not be included in the public version(s) of annual progress reports. However, the 5% threshold for exemption is too high; it exacerbates the unequal geographical distribution of the obligation across Member States and creates unfair, discriminatory conditions for obligated entities. IOGP Europe considers that a 1% threshold would strike a fairer balance, while neither imposing compliance obligations on entities that are markedly less able to meet them than the current list of obligated entities, nor unduly broadening the administrative burden for the European Commission and Member States.

Additionally, the individual contributions identified in the Commission Decision of May 22 (not yet published in the OJEU) gives obligated entities a mere month between the moment their identities and level of contribution are made known, and compliance plans are due. This creates yet more unnecessary additional reporting burdens and the unreasonably short time frame for preparation may lead to these first compliance plans being short of detail by necessity.

IOGP Europe also notes that very little of the industry response to the Commission consultation appears to have been reflected in the Draft Regulation or the Decision. In particular, the data set used to set the individual contributions has not been shared with the industry. As a result, the entities identified as individual contributors have not been given an opportunity to validate the level of the obligation given to them. We urge the Commission to take into account industry feedback on this key file to avoid unintended consequences for existing EU businesses and future EU investments.

The additional requirements to report on stakeholder engagement activities and to include economic, social and climate benefits in reports on an annual basis will also add unnecessary administrative burden, for which it appears no cost-benefit/impact analysis has been performed.

Looking ahead

As foreseen by the NZIA Regulation, under Article 23 (12.b. and 12.d.), we call on the European Commission to develop, in closer collaboration with Member States and industry and in a timely fashion the Delegated Act laying down implementation provisions on:

• How obligated entities can count their agreements or investments in CO₂ storage sites owned by others towards meeting their own share of the target.
• The detailed conditions under which exemptions or derogations can be granted.

IOGP Europe recalls that CO₂ storage projects can take over a decade to develop, and they are just one part of the CCS value chain. For the latter to fully develop and unleash its decarbonization potential, we continue calling for a comprehensive policy framework including funding and de-risking mechanisms, as well as the appropriate policy framework for CO₂ transportation to enable the full CCS value chain. We also call for simplified and faster permitting processes, to be implemented as soon as possible. While we welcome the fact that this is on the European Commission’s agenda, it will take time to materialize, making it all the more urgent to begin addressing these permitting bottlenecks now.

Looking ahead, we call on the European Commission to engage more closely with our industry in key platforms where this obligation is discussed to identify potential issues that may delay projects and find ways to properly address them.

Download document