The Oil and Gas Employers’ Federation (FPPG) notes the adoption, this week, of the Net Zero Industry Act (NZIA) by the EU Council. On this occasion, FPPG informs the public and all interested parties about the impact of the adoption of this new Regulation that will produce significant interventions on the market and specific, major obligations for oil and gas producers, directly influencing Romania’s industry.
We remind you that the FPPG position regarding NZIA is based on four critical aspects that must be taken into account when implementing carbon dioxide capture, transport and storage (CCS) projects. The aspects constantly presented to interested parties are:
- Economic viability and technical feasibility of CCS projects
- Facilitation and stimulation of investments
- Creation of an optimal legislative framework
- Informing the authorities and the general public about the technology to create understanding
NZIA introduces market interventions and imposes CO2 injection capacity obligations on oil and gas producers based on their production volumes from 2020-2023. Smaller producers below a certain threshold will be exempted from these obligations, details to be defined in a separate delegated act.
Allocation of Shares
The total calculated share is 50 Mtpa. The adopted text presents the risk of a non-uniform interpretation in the way quotas are allocated between EU Member States. This produces significant disadvantages for Member States that are large gas producers. Thus, Romania – the second largest gas producer after the Netherlands – received a quota of 9 Mtpa.
Responsibilities of Member States
Within 6 months of entry into force, Member States must:
– Make available to the public data on all areas where CO2 sites could be authorized;
– Obliges entities to make publicly available, on a non-reliable basis, geological data relating to decommissioned sites and, if available, an economic assessment of the costs of permitting CO2 injection;
– Report on the mapping of CO2 capture, infrastructure and storage projects.
Responsibilities of Romanian producers
– Within 12 months, the obliged entities present to the Commission a plan detailing how they intend to fulfill their contribution to the Union’s objective on CO2 injection capacity by 2030;
– Within 2 years, the entities must report the progress made to the competent national authority and the CE.
The FPPG recognizes that the adoption of the NZIA is an important step towards achieving carbon reduction targets. However, we request increased attention to the specific needs of Romania, being a large gas producer, to ensure a fair distribution of quotas and adequate support for the energy transition.
