IOGP Europe feedback on Net Zero Industry Act proposal

This paper was developed in response to the European Commission’s call for feedback on the Net Zero Industry Act. Below is an executive summary, please download the full report here

IOGP Europe is encouraged to see that the NZIA recognizes the role of Carbon Capture and Storage (CCS) as a key enabler of sustainable competitiveness. We welcome the possibility for CCS projects to be recognized by Member States as Net- Zero Strategic Projects. We are ready to work with EU institutions to establish the necessary measures and framework so that CCS deployment can accelerate across Europe and meet the ambition laid down by the Commission.

However, while the objective has the potential to trigger and accelerate the development of CCS value chains across Europe, IOGP notes that any such legal obligation to invest must be objectively achievable and reasonable. Even if all known projects in the EU would be operational by 2030 only 35 MtCO2/pa could be made available to the market. Furthermore, achieving 50 MT of storage in the EU by 2030 will be dependent on many factors outside the control of the investor in the project - notably licenses and authorisations given by Member State's national and local authorities, as well as geological factors - that may in some cases make it objectively impossible to complete certain projects by 2030.

While several storage projects are known in the EU today with an indicative start-up by 2030, only two of them have been authorized under the EU’s CCS Directive 2009/31, with an aggregated planned CO2 injection capacity of 3.8 MtCO2 p.a. by 2030. Most projects are in very early screening phase and even if they were to receive needed permits and funding within the next few years, it will depend on multiple external factors for them to become operational by 2030.

The graph below shows the possible build-up of storage injection capacity of all currently known CO2 storage projects in the EU, demonstrating that if the 2030 target is to be met, very significant acceleration of planning, licensing and other framework conditions outside the control of project investors will be required.

Injection capacity build-up of all known planned CO2 storage projects in the EU (Source: IOGP Europe)

CO2 storage developments are complex projects, and their implementation depends on many factors. Recent experience shows that they can take more than 10 years to complete, even if all project phases are managed within minimum periods. Implementing projects in less than 5 years from project inception to injection start-up is not achievable (see graph on CO2 storage project development phases and related legislative and regulatory issues below).

CO2 storage project development phases and related legislative and regulatory issues (Source: IOGP Europe)

Mandating hydrocarbon license holders to make storage capacity available will not actually reduce emissions. For CO2 to be effectively captured, transported, processed, and permanently stored, more policy support is needed to ensure that all entities along the CCS value chains have viable and sustainable business cases with signed agreements underpinning investments and defining their locations, capacities, and timing. Establishing stranded CO2 storage assets across Europe would neither benefit European industry nor the climate.

The above is an executive summary of the feedback to the consultation, the full report is available to download here.