Suggested changes to EU's Net Zero Industry Act spark concern

Suggested changes to EU's Net Zero Industry Act spark concern
10 November 2023

This week CEMBUREAU issued an urgent call for action to the European Parliament to maintain the ambitious CO2 storage target that the EU set out in March 2023 in the EU Net Zero Industry Act (NZIA), after changes to the initial draft were recently suggested by the ENVI Committee. The proposed Act is seen as an EU response to the US Inflation Reduction Act (IRA), designed to establish a framework to achieve industrial decarbonisation in Europe.

The draft NZIA set an ambitious storage target to achieve 50Mt of CO2 injection capacity in the EU by 2030, scaling up to 300Mt by 2040 and 500Mt by 2050. However, the ENVI Committee in the European Parliament voted on the draft NZIA, in October 2023. It suggested widening the Act's scope to include countries within the wider European Economic Area (EEA), not just the EU, while at the same time increasing the 2030 CO2 storage target to 60Mt.

Opponents argue that the changes would water down the original 50Mt target, thereby risking delay and jeopardising investment into European storage capacity. Some stakeholders have always argued for EEA expansion of NZIA, but this would include more mature storage site development capacity of EEA states, such as Norway, and lead to an increased focus of CO2 storage under the North Sea. The time lags in implementing present EU laws into the EEA would also likely add further delay and final investment decisions on the EU’s CO2 storage projects.

CEMBUREAU petitions for 50Mt CO2 target to be kept
CEMBUREAU argues that the original 50Mt NZIA target for 2030 is "essential for EU Industrial decarbonisation and vital to reach its climate goals". "Carbon capture and storage (CCS) is essential for the cement industry to reach its decarbonisation objectives and the absence of CCS infrastructure, including storage capacity in Europe, would see massive job losses through closures and increased reliance on imports," said CEMBUREAU.

CEMBUREAU, Oficemen, Schwenk, Heidelberg Materials and a further 19 signatories have supported urgent action for the EU to maintain its original NZIA emission targets rather than extending the time frame. The fear is that any extension to the deadline of 2030 would water down the target substantially and delay the build-out of European storage capacity for captured CO2, which may lead to a further centralisation of storage capacity in the North Sea.

Cement CCS projects with underground CO2 storage are increasing
A few of the cement sector's leading CCS projects requiring underground storage of CO2 include Heidelberg Materials' GeZero project to capture 0.7Mt of CO2 at the Geseke cement plant in Germany, Titan's IFESTOS Kamari plant project, which will see liquified CO2 transported to a permanent storage site in the Mediterranean, and Holcim's KOdeCo CCS project at the Koromacno cement plant in Istria, Croatia, which aims to store 360,000tpa of CO2 by 2028 under the Mediterranean Sea.

NZIA must maintain its focus and improve funding
There is also concern from the cleantech sector led by companies, such as Carbon Gap, that have argued  that NZIA should focus more on strategic cleantech sectors that are necessary to deliver net-zero by 2050. NZIA is designed to give cleantech sectors a competitive advantage, but by widening the scope of the Act to the entire chemical, steel and concrete industry, Carbon Gap argues that "the advantage would be diluted".

Chief among all the arguments for NZIA needing modification is acknowledging that net-zero requires not only regulation but also funding. The EU Commission's first estimate calculated the need for EUR92-119bn before 2030 to be invested, of which just EUR18-24bn would come from the public sector. By September 2023, the European Commission said all Innovation Fund projects awarded or pre-selected for grants so far covered about 21 per cent of the CO2 storage target under the NZIA.

Published under Cement News

Tagged Under: net zero Europe decarbonisation CCS