The European Commission has adopted a new regulation requiring oil and gas producers to contribute to developing large-scale carbon dioxide (CO2) storage infrastructure across the European Union
These new regulations are part of the EU’s bigger Industrial Carbon Management Strategy and Clean Industrial Deal, aimed at achieving climate neutrality by 2050.
EU targets 50 million tonnes of CO2 storage by 2030
The regulation, formally adopted this week, establishes how oil and gas companies will be identified and how their contributions will be calculated.
The Commission followed up by publishing a decision outlining how much each company must contribute to a collective EU target: 50 million tonnes of annual CO2 injection capacity into geological storage sites by the end of 2030.
This target, set under the recently adopted Net-Zero Industry Act, aims to accelerate the deployment of carbon capture and storage (CCS) technologies, especially for sectors that are difficult to decarbonise, such as cement, steel, and chemicals.
Assigned storage responsibilities
A total of 44 oil and gas companies have been listed in the Commission’s decision. These companies must develop operational, geological CO2 storage sites permitted under the EU’s CCS Directive.
Their obligations are based on their share of the EU’s crude oil and natural gas production from 2020 to 2023. As detailed in a separate annexe, companies with smaller production volumes have been exempted.
The Commission’s new rules give the obligated companies until 31 December 2030 to establish the required CO2 injection capacity.
The Commission recognises each approved storage project as a Net-Zero Strategic Project to support implementation. This designation brings faster permitting and the possibility of financial support, including from the EU’s Innovation Fund, which is funded through revenues from the Emissions Trading System (ETS).
Oil and gas producers will not be required to build the storage capacity alone. They can invest in projects individually or collaborate with others, including third-party developers and financial investors. This flexibility is expected to spur partnerships and increase the pace of CCS development.
Mandatory plans due by mid-2025
Under the regulation, all obligated entities must submit detailed plans to the Commission by 30 June 2025. These plans must outline how each company will achieve its assigned share of the CO2 storage target. The plans must also set out key milestones and the technical or financial strategies that will be used to deliver results.
The delegated regulation adopted by the Commission will now undergo a two-month scrutiny period by the European Parliament and Council. If no objections are raised, it will enter into force at the end of July 2025, together with the finalised Commission decision assigning individual company obligations.
This initiative is an essential element of the EU’s climate policy, designed to make heavy industry part of the solution to greenhouse gas emissions. By requiring oil and gas companies to provide CO2 storage infrastructure, the EU is tying climate responsibility to historical fossil fuel production while enabling the growth of a new industrial sector that supports net-zero goals.
