Objective
Enable timely delivery of the Net-Zero Industry Act, Article 23 obligations towards the EU target of 50 Mt/year CO₂ injection capacity by 2030, by ensuring the cost of non compliance is greater than the cost of compliance, while keeping penalties proportionate and ensuring compliant entities are not placed at an economic disadvantage.

Legal Requirements
By 30 June 2026, Member States must establish penalties that are effective, proportionate and dissuasive, using administrative measures, court proceedings, or both.

Compliance with the obligation
Article 23 defines company contributions to the target as consisting of “CO₂ injection capacity in a storage site permitted in accordance with Directive 2009/31/EC and available to the market by 2030”. In communications with the obligated entities, the Commission has further clarified the criteria for compliance as:

• Obligated entities are required to submit a report to the Commission by 30th June 2026, and every year thereafter, detailing their progress towards meeting their contribution under Article 23(6). The required contents of this report are outlined in Article 5 of Commission Delegated Regulation 2025/1477.
• By 2030, obligated entities (or their partners) will have been awarded a CO₂ storage permit from the Member States. The CO₂ storage permit should cover sufficient injection capacity equal to or more than their individual contribution. The Commission monitors the achievement of storage permits and the draft permits as notified by the Member States in accordance with Article 10 of Directive 2009/31/EC.
• Obligated entities should have contractual storage agreements in place with emitters which cover relevant injection capacities. Such agreements should be notified by obligated entities in their Annual Progress Report in accordance with Article 5(1)g of Delegated Regulation 2025/1477 (at the latest on 30 June 2031).

This brief outlines how penalties can be made effective, proportionate and dissuasive, with clear recommendations for policymakers ahead of the 30 June deadline.

Read more here