Read our report tracking the compliance of obligated entities, Member State progress and stakeholder perspectives on the CO2 injection capacity obligation in the Net Zero Industry Act.
The First Year of Article 23
Tracking Compliance, Progress and Perspectives on the CO2 Injection Capacity Obligation in the EU
Article 23 of the Net Zero Industry Act (NZIA) introduces a novel regulatory obligation requiring oil and gas producers operating in the European Union to contribute to the development of 50MtCO2 per year of injection capacity by 2030. This report provides the first annual state-of-play assessment of the implementation of Article 23 through the Article 23 Watch Initiative, a joint project by Carbon Balance Initiative, Bellona Europa, and Clean Air Task Force. The report examines progress by obligated entities and Member States, complemented by stakeholder perspectives and emerging litigation developments.
Overall, the analysis suggests the Article 23 is already influencing storage project development and policy planning across Europe. However, achieving the Union-wide target will depend on addressing regulatory uncertainties, strengthening Member State implementation, and accelerating the development of the broader CCS value chain.
The analysis of project development indicates substantial momentum in CO2 storage development in the EU, although progress remains uneven across the 44 obligated oil and gas entities. Based on current announced projects, the EU could reach approximately 43 MtCO2 per year of injection capacity by 2030, with the 50 MtCO2 target potentially reached closer to 2032 if projects are expanded and proceed as planned. A small group of companies is currently on track to meet their obligations through existing projects, while others face significant shortfalls relative to their targets. The Regulation allows obligated entities to fulfil their obligations through agreements with other storage developers, which could help close part of the gap between current project plans and the Union-wide target.
The effectiveness of Article 23 will depend on Member State implementation, particularly in areas such as permitting, regulatory coordination, infrastructure planning, and enforcement. The analysis shows significant variation across Member States. Some countries have established regulatory frameworks, geological data access, and administrative structures that facilitate storage development. Other remain at earlier stages of implementation.
Progress on penalty regimes required under Article 23 remains particularly limited. Member States hosting obligated entities must introduce effective, proportionate, and dissuasive penalties to ensure compliance with the obligation, yet only a small number have begun developing such frameworks.
Stakeholder interviews suggest broad support for the underlying rationale of Article 23 as a mechanism to break the long-standing deadlock in CCS deployment. Many interviewees described the regulation as an important policy signal capable of catalysing investment and accelerating storage development. At the same time, stakeholders raised concerns regarding regulatory clarity, timeline feasibility, and the need for full value chain coordination.
In October 2025, 12 obligated oil and gas companies initiated legal actions before the General Court of the Court of Justice of the European Union challenging aspects of Article 23 and related implementing measures. The cases focus primarily on questions of procedural transparency, proportionality, and the methodology used to allocate individual targets. While litigation is ongoing, the legal challenge does not suspend the obligation, and companies remain required to continue making progress toward their targets.
Looking ahead
The analysis in this report suggests that Article 23 is already shaping market behaviour, regulatory planning, and investment decisions in Europe’s emerging CCS sector. However, the coming years will be critical in determining whether the regulation successfully catalyses the scale of storage development required to support European decarbonisation goals.
To support effective implementation, several priorities emerge from the report:
- Greater regulatory clarity at EU level will be essential. Stakeholders highlighted uncertainty around how compliance will be assessed, what constitutes sufficient progress toward targets, and how delays will be treated in practice. Clearer guidance from the European Commission on these issues, including the type of agreements with third-party storage developers that could count towards compliance under Article 23(5), would help reduce uncertainty.
- Member States will need to strengthen enforcement frameworks. The introduction of effective, proportionate, and dissuasive penalties by the 11 Member States hosting obligated entities will be critical to ensuring the credibility of the obligation and maintaining a level playing field across the Union. Guidance from the Commission on penalty design could help promote greater consistency across national penalty regimes.
- Stronger enabling conditions for storage development will be required. Member States can support deployment by improving access to geological data, introducing single-points-of-contact, strengthening and expediting permitting systems, and ensuring that regulatory authorities have sufficient administrative capacity.
Developments in neighbouring jurisdictions may also influence the trajectory of the mechanism. Following a recent ruling by the EFTA Court clarifying the scope of the European Economic Area Agreement, Norway may incorporate the Net Zero Industry Act, potentially expanding the storage injection capacity target and strengthening cross-border coordination in the North Sea.
Overall, Article 23 represents a significant step towards establishing a functioning CO2 storage market in Europe. While implementation challenges remain, the regulation has already begun to generate momentum across industry and government. Continued coordination between the European Commission, Member States, and industry will now be essential to translate this momentum into large-scale CCS
Article 23 Watch 