EU mandates CO2 storage in major step toward net zero

The European Commission has invoked Article 23 of the Net-Zero Industry Act (NZIA), assigning binding CO2 storage obligations to 44 oil and gas producers across the EU.

Clarksons reports that the target is at least 50 million tonnes of CO2 injection capacity per year by 2030, increasing to 250 million tonnes by 2040.

The decision, currently under review by the European Parliament and Council, directly links fossil fuel extraction to carbon storage responsibility. It also highlights the urgent need to expand Europe’s limited CO2 storage and transport infrastructure, particularly in the LCO2 shipping sector.

Companies must submit compliance plans by 30 June 2025. Many are not active in carbon capture and storage (CCS), making the timeline tight.

New partnerships with third-party storage developers are likely to emerge, opening opportunities for collaboration.

However, several uncertainties remain, including enforcement mechanisms and the exclusion of advanced storage nations like Norway and the UK.

Despite this, the EU’s move signals a shift in accountability to producers and is expected to intensify competition for storage capacity, especially as few projects have reached Final Investment Decision (FID).

Currently, only Northern Lights and Project Greensand offer operational alternatives in Europe.

More options would improve market dynamics, reduce costs, and support projects distant from storage sites.

CCS projects typically take 6-8 years to develop, leaving little time to meet 2030 targets.

Clarkons deems shipping to be a viable transport method due to its flexibility, shorter lead times, and lower permitting hurdles.

Kenneth Tveter, Global Head of Green Transition and LCO2 at Clarksons, said: “The shipbuilding market is complex, and the yards’ appetite and capability to build LCO2 carriers is dynamic and market dependent. Executing newbuilds requires unique yard competence and commercial and technical knowledge.

“If you are not working on your LCO2 shipping strategy today, including project execution plans, you’re already behind. Shipping will be the only realistic option for many projects. It offers speed, scalability, and economic advantages over pipelines.”

In May, the European Union proposed establishing a dedicated centre to improve security in the Black Sea by collecting information from multiple countries and enhancing regional monitoring.