The EU is strengthening the implementation of carbon capture technologies. On October 25th, the European Parliament ITRE Committee adopted a report on the Net-Zero Industry Act (NZIA) by MEP Christian Ehler which is considered a substantial improvement of the Commission’s proposal.
The report adds carbon dioxide removal (CDR) to the list of net zero technologies in the scope of the Act, as well as the recognition of CO2 capture, infrastructure, and storage projects as net zero strategic projects. The addition will allow faster permit-granting processes, easier access to financing and investments, and direct funding at the EU and/or member state level for carbon removal projects.
“We substantially broadened the scope of the law with an extensive list of net-zero technologies and included the full supply chain. We also reduced time limits for permitting… The original proposal was part of the EU’s answer to the American Inflation Reduction Act, which had shown that the regulation-based approach of the Green Deal alone could not achieve it. The Net-Zero Industry Act is part of the solution to make the Green Deal more feasible for industry,” said MEP Christian Ehler.
The report confirms the proposed EU annual CO2 injection capacity target of at least 50 million metric tons by 2030. The target represents the beginning of scaling carbon capture and storage across Europe. The report also requires the Commission to set the EU annual CO2 capacity to be provided by 2035, 2040, and 2050 which would provide clarity and potentially set a pathway to progressively increase the EU storage capacity over the next decades.
The MEPs call for all suppliers of fossil fuels to contribute to providing CO2 storage. The EU-based oil and gas extractors are required to take responsibility for building EU CO2 storage infrastructure. Anyone who dug up oil or gas in the 2020-2023 period is directly responsible for contributing to building the newly mandated CO2 injection capacity pro-rata according to how much fossil fuel they produced.
The Net-Zero Industry Act was proposed by the European Commission on 16 March 2023 to increase and strengthen Europe’s manufacturing output in technologies needed to reach the EU’s climate targets.
It aims to expand the EU’s manufacturing capacity in clean technologies as they are largely imported. The Act’s measures aim to ensure that the manufacturing capacity in the EU of the strategic net-zero technologies by 2030 reaches at least 40% of the EU’s annual deployment needs.
Some of the technologies are solar photovoltaic and solar thermal, onshore wind and offshore renewables, battery/storage technologies, heat pumps and geothermal energy, electrolysers and fuel cells, sustainable biogas/biomethane technologies, carbon capture and storage, and grid technologies.
Some environmental organizations welcomed the report and its changes. “Carbon Gap strongly calls for the adoption of the report as endorsed by the ITRE Committee. It is crucial that the European Parliament adopts an ambitious and robust position on NZIA to ensure that CDR is given the attention it deserves, whilst strengthening the storage obligation of oil and gas companies in line with producer responsibility principles. We call on the Council to follow suit and adopt an effective Net-Zero Industry Act which delivers on the ‘net’ in net zero,” said Matteo Guidi, Senior Policy Analyst at Carbon Gap.
Other organizations expressed criticism that it opens the legislation to too many and unproven technologies, risking taxpayers’ money and allowing projects in Natura 2000 areas. The financial responsibility of the building of CO2 storage infrastructure is also not clearly defined which risks the responsibility being passed on to European taxpayers instead of oil and gas companies.
“Changing the scope of the Net Zero Industry Act risks diverting taxpayers’ money from the key green technologies we need to decarbonize our industry. 2030 is just around the corner; the EU should instead be investing in green technologies which are truly clean and can deliver fast decarbonization, such as solar panel production and wind turbines, with renewable hydrogen and Carbon Capture and Storage (CCS) technologies only for unavoidable emissions in targeted sectors…,” commented Camille Maury, Senior Policy Officer on the Decarbonisation of Industry at WWF European Policy Office.