24-07-2024

DNV completes CCS directive guidance to facilitate sustainable CO2 storage in the EU economic area

DNV, the independent energy expert and assurance provider, has successfully supported the European Commission’s update of the four non-binding Guidance Documents (GDs) on geological carbon storage under the Carbon Capture and Storage (CCS) Directive. This update aims to streamline permitting procedures and support sustainable CO2 storage solutions in the European Economic Area (EEA).

Supported by stakeholders’ input, the updated GDs provide Member States with more clarity on identifying suitable geological areas for CO2 storage and exploration. Key updates focus on novel CO2 storage technologies in mafic/basalt rocks and depleted hydrocarbon reservoirs, CCS value chain aspects, corrosion and safety issues, and the regulatory transition from hydrocarbon production to CO2 storage. Another important aspect of the updated Guidance Documents is a more balanced, risk-based approach to establishing financial provisions for CO2 storage permits.

The updates also clarify interpretations and methodologies, such as the definition of what constitutes CO2 leakage, the relevance of "expected value" techniques, or the proper approach to determine acceptable levels of risk. These clarifications and others are informed by comments from a diverse range of stakeholders and were discussed during public consultations.

The update arrives at a crucial time, as the EU Net Zero Industry Act (NZIA1) recently came into force. The NZIA identifies CCS as a strategic net-zero technology, setting a target of 50 million tonnes of annual CO2 injection capacity by 2030 and mandating contributions from oil and gas companies. Member States are also required to make all geological data on potential CO2 storage sites publicly available. The growing importance of CCS in achieving climate neutrality is also highlighted in the Industrial Carbon Management strategy published by the Commission in February.

“As a global assurance and risk management expert with experience in over 200 CCS projects, DNV is well-positioned to support this initiative”, said Jamie Burrows, Head of CCUS, Energy Systems at DNV. “Our responsibilities include the technical update of the Guidance Documents, capacity building for Competent Authorities and permit applicants [still ongoing], and handling stakeholder change suggestions. Each proposed change was thoroughly evaluated to enhance the usability and content of the Guidance Documents before being approved by the Commission’s services”.

The project began with an assessment phase, evaluating the current use of Guidance Documents by Competent Authorities and storage operators. A stakeholder workshop in June 2023 identified additional areas of improvement. By mid-2024, the revised Guidance Documents were finalized and adopted by the Commission. Capacity-building workshops from February to April 2024 provided further support, and the project concluded in July 2024 with the delivery of a Final Report containing recommendations for further guidance.

“DNV aims to facilitate the adoption of sustainable CO2 storage solutions, promote best practices, and ensure effective implementation of CO2 storage regulations in the EEA,” Prajeev Rasiah, Executive Vice President & Regional Director, Northern Europe, Energy Systems at DNV said. “By supporting the Commission to develop comprehensive guidelines and best practices, DNV aims to assist operators and Competent Authorities in navigating the regulatory landscape, ensuring transparency and access to essential information. The documents support a transparent and secure framework for CO2 storage, contributing to greenhouse gas reduction and climate goals in Europe.”

According to DNV's latest Energy Transition Outlook, Europe is projected to hold about 17% of global CCS capacity by 2050, trailing North America's 19%. Despite this capacity, CCS is expected to reduce less than 4% of global fossil CO2 emissions by 2050. However, a significant scale-up of CCS is anticipated in the next five years as carbon prices are expected to align with CCS costs in the 2030s, likely accelerating its adoption.

To explain the main changes and address questions from the consultation period, DNV will support the Commission’s in-person capacity-building workshops on 17 and 19 September, which will also be livestreamed. For more information about the technical update of the CCS Directive Guidance Documents, please visit the EU Commission’s website: Implementation of the CCS Directive - European Commission or the Project Website.