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On 25 June 2009 Directive 2009/31/EC on the geological storage of CO2 entered into force. The Directive establishes a legal framework for the environmentally safe geological storage of CO2 to contribute to the fight against climate change.
The UCL Carbon Capture Legal Programme launched the 'EU Case Studies Project' in January 2011 analysing the implementation process of the CCS Directive in selected European jurisdictions.
CO2 Capture and Storage (CCS) is recognised as a critical technology for combating climate change – within a portfolio of technologies, including greater energy efficiency and renewable energy.
The EU agreed to set aside 300 million emission unit allowances (EUAs) from the New Entrance Reserve (“NER 300”) to demonstrate CCS and innovative renewable energy technologies – including funding for up to 12 large-scale CCS demonstration projects.
The International Energy Agency produces a regular review of CCS regulatory progress worldwide (called the “IEA CCS Legal and Regulatory Review” or the “IEA CCS Review”), to provide a forum for sharing knowledge on CCS legal and regulatory issues, help countries develop their own CCS regulatory frameworks, and identify steps taken towards the legal and regulatory goals in the 2009 IEA Technology Roadmap: Carbon capture and storage.
The IEA CCS Review consists of contributions by national, state, provincial and regional governments, and several key international organisations involved in CCS. Each entry includes an overview of recent and anticipated CCS advances and addresses a particular CCS legal and regulatory theme, such as authorising CO2 storage. For each edition, the IEA also provides a brief analysis of key advances and trends.
The IEA CCS Review is also available on the IEA’s website at http://www.iea.org/topics/ccs/ccslegalandregulatoryissues/ccslegalregulatoryreview/. Contact Justine Garrett at the IEA for more information ().
Alberta has recognised the need to address regulatory and policy barriers facing the deployment of commercial-scale CCS and has implemented legislation to deal with these issues. To address uncertainty related to pore space ownership and the management of long-term liability, the Government of Alberta passed the Carbon Capture and Storage Statutes Amendment Act in December 2010. This legislation was essential to enable the Government of Alberta to grant tenure agreements for pore space access, which allows for the advancement of a number of commercial-scale CCS projects that will reduce GHG emissions by five million tonnes annually beginning in 2015.
To support the Act, the Carbon Sequestration Tenure Regulation was passed in April 2011. The regulation addresses three main aspects of tenure for CCS. They are:
In order to identify and address any other potential regulatory gaps associated with CCS in Alberta, the Government of Alberta initiated a Regulatory Framework Assessment (RFA) in March 2011. The RFA is a significant project being led by the Department of Energy, with participation by various stakeholders including other government departments, industry, academia, non-governmental organisations and international experts. The RFA is examining in detail the environmental, safety and assurance processes that exist to determine what, if any, new processes or requirements need to be put in place. This project is being guided by a multi-disciplinary steering committee and an expert panel that consists of world-renowned scientists who are internationally recognised for their experience and expertise in CCS issues and in developing energy and environmental policy. The expert panel is acting as a third-party advisor and will peer review work. The regulatory analysis and development of recommendations are being conducted by four working groups - highly specialised teams that are examining various specific issues in detail.
In the next 6-12 months, the RFA will continue to proceed and develop recommendations for regulatory enhancements as they are identified. The expert panel and steering committee will review and approve recommendations from the working groups with subsequent submission of the recommendations to the Minister of Energy for final approval. The RFA is expected to conclude its work by the end of 2012.
Alberta recognises the important role stakeholders and the public play in deploying commercial-scale CCS. Our approach is to ensure Albertans have a solid understanding of CCS and confidence in the provincial government’s approach to managing CCS activities well before projects begin operation in 2015.
To increase public awareness of CCS, and how the government is moving forward with this technology, the Government of Alberta undertook a public education and outreach campaign in October and November of 2011 to provide accurate information about CCS to the public via newspaper inserts, television commercials featuring three themes: CCS, enhanced oil recovery and climate change, and a new website (www.SolutionsStartHere.ca). The education and outreach programme is expected to be followed by a public consultation about the regulatory framework for CCS. The consultation will involve a number of community meetings, discussions with stakeholders and an online questionnaire. The government plans to provide a “what we heard” report that summarises these discussions following the consultation.
Through these consultations, Albertans will have the opportunity to participate in the development of a world-class regulatory framework for CCS by providing their views on issues related to CCS, and input into the rules that will govern how CCS activities are done in the province.
It is important to note that at the project level, our proponents have spent significant amounts of time building relationships with their neighbours and the nearby communities. They have been very actively engaging with their stakeholders - hosting numerous open houses and meetings and providing responses to the many requests for more information about CCS or about their particular project.
Currently, there are regulatory requirements for operators to undertake public engagement as part of the approval process for industrial facilities, and CCS projects are no different. Requirements for broad public notification, focused landowner consultation and public hearings are well-established in Alberta’s regulatory regime. Requirements and triggers for engagement and consultation are being reviewed as part of the RFA to ensure appropriate requirements are in place in the Alberta regulatory process for commercial-scale CCS.
Alberta is committed to sharing its experience with others in the global CCS community. The province will provide periodic updates, as well as share reports, data and the lessons that are learned through the RFA and the three commercial-scale projects that are receiving part of their funding through a CAD 1.5 billion commercial demonstration programme
Under Australia’s federal system of government, the Australian Government has jurisdiction over Commonwealth waters (extending from three nautical miles offshore to the edge of Australia’s continental shelf) and the states and territories have jurisdiction over onshore areas and coastal waters (up to three nautical miles). The development of legislative and regulatory systems in each jurisdiction is a matter for the jurisdiction concerned.
The Commonwealth has finalised the Offshore Petroleum and Greenhouse Gas Storage (Greenhouse Gas Injection and Storage) Regulations 2011 (Commonwealth), which came into force in June 2011.These detailed regulations underpin the overall framework contained in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Commonwealth) regulating offshore injection and storage operations. The regulations cover six linked elements:
The government has established a new national body (the National Offshore Petroleum Titles Administrator) to regulate the offshore petroleum industry, replacing the previous system of State/Commonwealth Joint Authorities. This new body will also be responsible for the day-to-day administration of offshore GHG injection and storage projects and commenced operations on 1 January 2012.
No major developments are expected in the next 6-12 months because all the necessary parts of the Commonwealth’s regulatory regime for injection and storage are now in place. However, in relation to transport, the Commonwealth is providing support for research into CO2 pipelines with the objective of developing cost-effective standards for pipelines that will also ensure that transport is safe and secure. This work will progress over the next two years.
State and territory governments have responsibility for regulatory requirements in their jurisdictions. The following, therefore, only addresses those matters which are the direct responsibility of the Australian Government.
The government recognises the importance of public engagement in all phases of a CO2 storage project.
In undertaking exploration for offshore for storage sites, industry is required to consult with other users of the sea (including the offshore petroleum industry, the fishing industry, shipping, defence, telecommunications, and native title interests). In addition, any activities have to a meet a range of environmental approvals, which may include consultation under environmental protection legislation (the Environment Protection and Biodiversity Conservation Act 1999 (Commonwealth)). These requirements are identical to those required of the offshore petroleum industry.
The Commonwealth’s regulatory framework for CCS requires that information on a proposed injection and storage project (in the form of a summary of the site plan) be made publicly available before a project can be approved and provides that any comments will be taken into account by the regulator as part of the approval process. While the regulatory framework does not formally require proponents to undertake consultation before lodging a site plan for approval, they are advised to do so. However, the regulations require a site plan to include a report on consultations undertaken and a strategy for on-going consultation with stakeholders over the life of the operation. Projects are also likely to trigger further public consultations under environmental protection legislation.
Where the Commonwealth is providing funding support for on-shore CO2 storage projects, it requires proponents to develop and implement a community consultation plan which identifies key stakeholders, outlines proposed community consultation processes, and to report back on the implementation and outcomes from the process.
British Columbia is in the process of drafting a regulatory framework for CCS. The CCS regulatory framework builds on British Columbia’s existing legislation and regulations within the oil and gas industry.
CCS projects may undergo project review and approval via three or four separate processes involving different regulatory authorities. The Ministry of Energy and Mines has the statutory authority to issue storage licenses and leases, administer tenure application processes and manage tenures. Depending on the specifics of the project proposed, a provincial and/or federal environmental assessment could be required. The British Columbia Oil and Gas Commission has the regulatory authority for the exploration and use of storage reservoirs, facilities, wells and pipelines except where a pipeline and related facility is interprovincial in nature, where the authority lies with the National Energy Board.
In British Columbia the Petroleum and Natural Gas Act (P&NG Act) provides the legal basis for the tenuring of underground storage reservoirs. As defined in the P&NG Act, a storage reservoir means “a naturally occurring underground reservoir that is capable of being used for the introduction, disposal, storage or recovery of petroleum, natural gas, water produced in relation to the production of petroleum or natural gas, waste or any other prescribed substance”. Storage reservoirs can include oil and gas bearing formations, but any other formation as well. As the P&NG Act’s definition of natural gas includes its unprocessed constituents, CO2 from natural gas production can be stored in an underground reservoir. The P&NG Act was amended in 2008 to enable CCS from sources other than natural gas processing by expanding the storage reservoir definition to include “other prescribed substances”. It is anticipated that a regulation prescribing CO2 from other industrial sources will be finalised in conjunction with the CCS Regulatory Framework.
Part 14 - Underground Storage of the P&NG Act clarifies storage space ownership. The P&NG Act recognises that the pore space required for natural gas storage or CCS purposes may be owned by a private owner or by the Crown. The P&NG Act creates a tool by which pore space ownership, if not already owned by the Crown, can be vested in the Crown for the purposes of creating a storage reservoir. If private ownership exists then under s.128 pore space ownership rights can become vested in the Crown. These rights may then be leased to a private operator in order to facilitate the development of a natural gas storage project or a disposal project. The P&NG Act creates a process by which a person can apply for compensation for loss of the ownership of the pore space due to the vesting order.
Part 14 outlines the tenure disposition process by which companies can be granted the right to use an underground space for storage. Under the P&NG Act, the Ministry of Energy and Mines is the statutory authority for managing storage licences and leases. Section 130 describes the lease application process for a storage reservoir. It outlines who may apply: 130 (1) The holder of a petroleum or natural gas permit, drilling licence or lease or an storage exploration licence may apply to the minister for a lease of a storage reservoir that is owned by the government; how they can apply – 130 (2) An applicant for a lease must make the application to the minister in a form suitable to the minister; and, government’s response - 130 (3) The minister may lease a storage reservoir that is owned by the government to a person who applies and the minister may grant a lease that is different than the one applied for or may refuse to grant a lease. The Minister of Energy and Mines has considerable discretion in deciding whether or not to approve an application for a storage license or lease as well as the term and conditions of the lease.
When a major project or facility is proposed in British Columbia an environmental assessment by one or more government agencies may be required. For example, an interprovincial pipeline triggers an environmental assessment from the provincial government under the BC Environmental Assessment Act (BCEAA), a federal environmental assessment under the Canadian Environmental Assessment Act (CEAA), and a review from the National Energy Board (NEB).
If a project requires approvals or review from more than one of the authorities listed above the review may be co-ordinated in an effort to expedite the process and avoid duplication. To facilitate this co-ordination, agreements have been signed between provincial and federal levels of government and the NEB.
In British Columbia, the Environmental Assessment Office (EAO) manages the assessment of proposed major projects as required by the BCEAA. Projects become reviewable in three ways:
Natural gas processing, energy storage facilities and transmission pipelines are oil and gas projects that are deemed to be reviewable under the Reviewable Projects Regulation.
British Columbia has a mature oil and gas regulatory regime that was recently modernised in the 2008 Oil and Gas Activities Act. Under the Oil and Gas Activities Act, the Oil and Gas Commission (OGC) is the regulator of all oil and gas activities. The exploration and use of a storage reservoir is defined in the Act to be an oil and gas activity. As an agent of the government, the OGC fulfils government responsibilities to review applications, issue authorisations and regulate projects on lands within provincial jurisdiction, both private and Crown. CO2 storage or disposal into a storage reservoir requires the regulatory approval of the OGC. Regulations for the injection and underground storage of gases currently exist to facilitate the disposal of acid gas from the natural gas processing industry. In northeast British Columbia there are currently twelve acid gas disposal sites re-injecting a mixture of CO2 and hydrogen sulphide deep underground into depleted gas pools or saltwater-filled rock formations.
The CCS regulatory framework under development will address identified gaps in the current regulatory framework. Identified areas include site selection, monitoring, measuring and verification and, long-term liability.
The Government of British Columbia has passed a number of significant pieces of climate action legislation that drive the adoption of emissions mitigation measures such as CCS. Brought into force on 1 January 2008, the Greenhouse Gas Reduction Target Act (GGRTA) sets a target for British Columbia’s emissions to be lowered by 33% by 2020 and 80% by 2050 from 2007 levels. These targets drive development of supporting legislation, regulation and policy that reduce GHG emissions.
The Carbon Neutral Government Regulation under the GGRTA also requires each public sector organisation to be carbon neutral. This includes measuring energy use and GHG emissions, taking steps to conserve energy where possible and economical, reducing remaining emissions to net-zero through offsets through Pacific Carbon Trust and reporting out publicly. Since industrial process, venting and fugitive emissions are not currently taxed or capped within British Columbia, projects where these emissions are captured and stored could be eligible for offsets until those emissions have been regulated or have a carbon price.
British Columbia was the first province to introduce legislation authorising hard limits ("caps") on GHG emissions through the Greenhouse Gas Reduction (Cap and Trade) Act (GGR(CT)A). This legislation would enable BC’s participation in the trading system being developed with other jurisdictions through the Western Climate Initiative (WCI). The GGR(CT)A Reporting Regulation requires all facilities, oil and gas operations or electricity import operations with 10 000 tonnes or more of GHG emissions to quantify and report emissions levels to British Columbia. Third party verification is required for operations with emissions of 25 000 tonnes or more.
British Columbia, through the 2008 Carbon Tax Act, is also the only jurisdiction in North America to have implemented a broad-based revenue-neutral carbon tax. The carbon tax started July 1, 2008 at a rate of CAD 10 per metric ton on combustion emissions and rises by CAD 5/t a year for the subsequent four years, reaching CAD 30 per metric ton by 1 July 2012. Although not in force at this time, section 84 of the Act enables the Lieutenant Governor in Council through regulation to waive or reduce the tax payable on emissions stored or sequestered in accordance with provisions of the Environmental Management Act.
The 2007 BC Energy Plan has set the performance standard of zero GHG emissions for any new coal-fired electricity generation facilities. This standard allows for the development of coal-fired generation only if in combination with CCS.
On 23 June 2010, the Government of Canada (GoC) announced that it is taking action to reduce GHG emissions in the electricity sector by moving forward with regulations on coal-fired electricity generation. On 27 August 2011, the GoC published proposed Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations in Canada Gazette Part I. These regulations, which are scheduled to come into effect on 1 July 2015, propose to require all new coal-fired units, as well as units reaching the end of their economic life, to meet a stringent performance standard based on the emissions performance of high-efficiency natural gas combined cycle generation. Under the proposed regulations, new units and units reaching the end of their economic life that incorporate technology for CCS could receive a temporary exemption from the standard until 2025. The proposed regulations also contain provisions that give recognition to units that implement CCS before they are subject to the performance standard. A 60-day comment period closed 26 October 2011.
The GoC continues to work with London Protocol parties to update the guidance on the assessment and permitting of the storage of CO2 streams in sub-seabed geological formations, with a view to considering movement and how that should be addressed in terms of information sharing, consent, mitigation and longer term monitoring. The Canadian government is also currently undertaking the necessary steps to ratify the 2009 London Protocol amendment. Canada is also working with the United States through the US-Canada Clean Energy Dialogue to discuss compatibility in regulatory standards and is actively engaged in other international CCS dialogue pertaining to advancing the development of CCS regulatory frameworks.
Alberta is conducting a CCS Regulatory Framework Assessment (RFA) to ensure that its CCS regulatory framework is comprehensive. The GoC is represented in this process. An overview of the Alberta CCS regulatory context is provided in the Regional jurisdiction contributions section on page 64.
British Columbia is in the process of drafting a regulatory framework for CCS. A review of the existing legal framework has been conducted. An overview is provided in the Regional jurisdiction contributions section on page 66. British Columbia is also a participant in the Alberta RFA.
In Saskatchewan, CO2 transportation (pipeline), injection and storage are regulated under The Oil and Gas Conservation Act (the Act) and The Pipelines Act, 1998, administered by the Ministry of Energy and Resources. In May 2011, an amendment to the Act passed the third reading and received Royal Assent. The Act was proclaimed on 1 April 2012, under which the Oil and Gas Conservation Regulations, 2012 came into effect. The provisions in the amendment that relate to CO2 injection and storage include:
Bill 157, The Oil and Gas Conservation Amendment Act, 2011 can be found at the following link: www.qp.gov.sk.ca/documents/english/Chapters/2011/Chap-11.pdf
The Oil and Gas Conservation Regulations, 2012 can be found at the following link: http://www.qp.gov.sk.ca/documents/English/Regulations/Regulations/O2R6.pdf
Saskatchewan is also a participant in the Alberta RFA.
CCS Nova Scotia, a non-profit public-private-academic research consortium, is in the final year of research into determining the technical and economic feasibility of the capture, transport and storage of CO2 from coal-fired electrical generating facilities in Nova Scotia. The research extends to options for storage and transportation both onshore and offshore. Reports include geological assessments, capture and transportation options in addition to ancillary activities such as a regulatory/legal report, risk management roadmap and a public/stakeholder awareness plan for the possible deployment of a pilot CCS project, all developed with a Nova Scotia perspective.
The final GoC Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations are expected to be published in 2012. In Nova Scotia, all research work is expected to be completed by the third quarter of 2012.
Generally speaking, the GoC is required to ensure that an environmental assessment (EA) is conducted prior to making certain decisions in relation to a project as defined under the Canadian Environmental Assessment Act (CEA Act). The three most common EAs conducted under the CEA Act are screenings, comprehensive studies and panel reviews.
For screening level EAs, conducting public consultation is at the discretion of the GoC. In making the determination of whether to conduct public consultation for a screening, the GoC considers several factors such as: the likelihood of public concern or interest, whether the project involves a new or un-tested technology, whether the project is occurring in a location with environmental sensitivities, etc. Currently, all of the CCS projects for which a federal EA has been required (e.g. Shell Quest, Enhance, Husky Lashburn and Tangleflags) were subject to screening level EAs. Of these, the GoC conducted public consultation pursuant to subsection 18(3) of the CEA Act on only one, the Shell Quest CCS project. The public was provided an opportunity to comment on the scope of the project, the scope of the EA and the federal screening report.
The GoC EA documents in relation to the Shell Quest project, including the decision that the project is not likely to cause significant adverse environmental effects, are available from the Canadian Environmental Assessment Agency’s web site: www.acee-ceaa.gc.ca/050/details-eng.cfm?evaluation=55916
Further, the Shell Quest project was recently approved with conditions by the province of Alberta’s primary energy regulator, the Energy Resources Conservation Board: www.ercb.ca/decisions/2012/2012-ABERCB-008.pdf
For comprehensive studies and panel reviews, public consultation is mandatory under the CEA Act, however, to date none of the CCS projects have been subject to a comprehensive study or review panel process.
The Ministry of the Environment submited a law for transposition of the EU CO2 Storage Directive to the Government of the Czech Republic. On 25 October 2011, the government passed the Act on the storage of carbon dioxide into natural rock structures and amending certain laws in its resolution No. 783.
The governmental proposal of this Act was forwarded to the Parliament of the Czech Republic.
It is expected that the House of Representatives will approve the proposal upon the first reading. After the Senate approves the proposal, it will be signed by the President and come into force 30 days after publication in the Collection of laws.
It has been proposed to postpone the day of coming into force of the provisions concerning the licensing regime in relation to the operation of storage of CO2 (§ 3 to 6 of the Act) to 1 January 2017. The District Mining Offices will not be able to issue operating permits for storage of CO2 up until this date, but individual operators will be able to prepare for the legal conditions for the storage of CO2 in the Czech Republic.
The most promising storage sites are currently considered to be aquifers in northern Bohemia and depleted oil fields in southern Moravia. Furthermore, several options of carbon capture and use are being evaluated.
The government’s Act on the storage of carbon dioxide into natural rock structures and amending certain laws assumes that the public’s representatives will be the participants in the administrative procedure for issuing operating permits for the storage of CO2.
According to § 4 par. 1 of the Act the participants of the administrative procedure for issuing operating permits for the storage of CO2 will be the operator, the municipality in whose territorial jurisdiction the storage of CO2 is to occur, persons meeting the requirements under other legislation (e.g. according to § 23 par. 9 of the Act on the assessment of environmental impact) and persons whose rights and legally protected interests or obligations may be affected by the permit.
EU member states had to transpose the EU CO2 Storage Directive into national legislation by 25 June 2011. Spain had notified complete transposition on time. Due to incomplete or non-communication of transposition measures, the European Commission launched infringement procedures with Letters of Formal Notice against 26 EU member states. As of June 2012, nine of those cases were closed as full transposition legislation has been communicated in the meantime. The remaining 17 cases are still under assessment. In parallel with the completeness check, the Commission services have started assessing the conformity of the notified transposition measures with the requirements of the EU CO2 Storage Directive. Timely and correct transposition of the EU CO2 Storage Directive is of particular importance in member states with CCS demonstration projects in the NER300 funding competition (see below), as award decisions will be conditional upon all relevant national permits being issued within a certain time limit, in accordance with relevant EU legal requirements.
On 28 February 2012, the Commission published its first opinion on a draft CO2 storage permit that was notified to the Commission services for review pursuant to Article 10 of the EU CO2 Storage Directive. The purpose of the Commission review is to ensure consistency in the implementation of requirements of the EU CO2 Storage Directive across the EU and help to enhance public confidence in CCS.
79 proposals for large-scale demonstration projects involving innovative renewable energy and CCS have passed the member state stage of the NER300 programme and have been submitted to the European Investment Bank (EIB) by the submission deadline of 9 May 2011; 13 CCS project proposals were submitted. The EIB finalised its financial and technical due diligence assessment and reported to the Commission services in February 2012 with a list of ranked projects according to the criteria set out in the NER300 Decision. Since December 2011, the EIB has been monetising the first 200 million ETS allowances for the co-financing of projects selected under the first call for proposals.
The Commission services will continue to ensure timely and correct transposition of the EU CO2 Storage Directive.
After finalisation of the financial and technical due diligence assessment by the EIB earlier this year, the Commission services are verifying the eligibility of projects and carrying out competitiveness checks as necessary. The monetisation of the first 200 million allowances has to be completed by early October 2012. Award decisions are envisaged by the end of 2012. The Commission services will also set up structures and procedures for knowledge sharing under the NER 300 programme.
The Finnish government prepared the law for CCS which will implement the EU CO2 Storage Directive. The law was approved by the Parliament in June 2012.
The approved law forbids the storage of CO2 in the Finnish territory, due to the lack of suitable geological formations. However, storing volumes up to 100 000 tonnes for research and technology development purposes may be permitted. CO2 potentially captured in Finland may only be exported for storage in geological formations located within the European Union.
Finland’s CCS law will come into force on 15 July 2012.
Over the last twelve months, France has finalised transposition of the EU CO2 Storage Directive and notified the European Commission of this achievement. Decree n° 2011-1411 dated 31 of October 2011 on the geological storage of carbon dioxide entered into force on 1 November 2011. This decree completes law level provisions that entered into force in 2010.
This decree settles practical provisions related to seeking and granting exclusive rights to explore (exploration permits) as well as seeking and granting storage concessions, both addressing access right to the underground. Its scope also encompasses exploration activities and granting of storage permits. Details are set out about documents to be handed to the competent authority as part of these processes.
Monitoring, closure, post-closure of storage sites as well as transfer of responsibility procedures are also addressed in this decree.
This regulation does not cover some of the topics unresolved by the EU CO2 Storage Directive itself, including the calculation method for financial security or financial security mechanisms, criteria for the composition of the CO2 stream, storage perimeter, etc. However, it brings complementary provisions for example on injection tests that take place under the exploration permit: these complementary provisions address CO2 stream quantity injection thresholds and the necessary protection of underground waters.
This decree has since been codified in the Environmental Code as articles R.229-57 to R.229-102.
No further regulatory developments are expected to occur in the next 6-12 months and beyond. However, technical works will be carried out to deepen some key issues around geological storage including:
France is addressing public engagement issues very carefully.
Debate on CCS has taken place in the framework of a wider debate on sustainable development policies – the so called Grenelle Environnement which took place in 2007. As a result the law n°2009-967 entered into force. Its article 22, related to CCS, states that CCS development will be accompanied by appropriate legal framework development and supported financially.
Then, while drafting the various legislative provisions that have now entered into force, public consultation took place via internet (30 days’ consultation).
Finally, as far as CCS projects are concerned, public engagement takes place at various levels all throughout the projects.
The legislation on CCS is currently passing the last steps of the legislative process and is going to enter into force soon. The German Bundestag passed the draft act on 7 July 2011. The Bundesrat decided on 23 September 2011 not to consent to the draft. The German government applied for a formal conciliation procedure on 26 October 2011. The conciliation committee proposed amendments to Parliament on 27 June 2012; both chambers, Bundestag and Bundesrat, consented to the amended draft at end-June 2012.
Entry into force within the next month.
This technology is met with great reservations in particular in areas that would be suitable for CO2 storage. Numerous citizens' initiatives have sprung up that have created a network of contacts all over the country. The main reasons for their rejection are the ecological concerns put forward by some environmental organisations and doubts regarding the usefulness of the technology in general. The main concerns vary among the different environmental organisations. BUND (Friends of the Earth) and Greenpeace, for example, have reservations against CCS technology in particular because the CO2 to be stored stems from burning fossil energy sources, while the WWF and Germanwatch are in favour of testing and demonstrating CCS technology especially with a view to reducing process-related emissions from industry.
Public resistance is the major barrier to reaching the demonstration phase for CCS in Germany. It seems necessary to clarify that CCS will only reach commercial-scale deployment after the demonstration phase has shown the economic, technical and environmental feasibility of CCS and that CCS will primarily play a role where other mitigation options do not exist.
The law covers a lot of these aspects. When drawing up a new draft in 2010/2011 the latest developments in CCS technologies were taken into account. As a consequence it was decided that German legislation should be limited to the testing and demonstration of CCS. The amount of CO2 to be stored every year was restricted to three million tonnes of CO2 per storage site and a national total of eight million tonnes CO2. Thus, the bill allowed for no more than three larger demonstration projects in Germany. In addition, a deadline for the application for storage permits of 31 December 2016 was included. Amendments in the conciliation procedure were the following: in order to further stress the character of the law as a demonstration law the amounts of CO2 were restricted to 1.3 million tonnes of CO2 per storage site and a national total of four million tonnes CO2. Furthermore, the time lapse between decommissioning of the storage site and transfer of responsibility was extended from 30 years to 40 years. The much contented states’ clause – allowing states to exclude territory from CO2 storage – was amended to clarify the obligation to take into account objective reasons when excluding state territory.
Applying the highest environmental and safety standards for storing CO2 in geological formations remains one of the key aspects for public acceptance. Therefore Germany’s CCS law regulates that a permit for a storage site can be granted only after a planning approval procedure has been carried out, requiring inter alia that the storage site is safe in the long term, dangers to human health and the environment are ruled out and that precautionary measures are taken in accordance with the state of science and technology. The public has extended opportunities for participation. The operator has to provide financial security to cover all relevant risks (see Edition 2 of the CCS Review).
Illinois is a primacy state, which means that the implementation of US Underground Injection Control (UIC) regulations and the permitting of certain classes of wells under the federal Clean Water Act is administered by the Illinois Environment Protection Agency (IEPA). Development of the first 1 million tonne saline reservoir storage demonstration in Illinois was permitted by the IEPA under a Class I Nonhazardous permit classification. This project is the Illinois Basin-Decatur Project (IBDP) in collaboration with the Archer Daniels Midland Company in Decatur, Illinois. The permit application was submitted in January 2008 and the final authorisation to inject was received in November 2011. During this period, the injection well was permitted and drilled and two other wells were drilled for monitoring as permit modifications were approved during this nearly four-year period. Continuous injection began in mid-November 2011 at 1 000 tonnes per day. Permitting took place in this way because IEPA felt that there was the most background and precedent to issue a Class I permit rather than a Class V experimental permit at the time the original application was submitted.
Currently, the new Class VI UIC regulations, issued by the US EPA, now apply to CO2 storage wells and Class I permits are no longer being issued in the US for storage. Regardless of current well status, all existing, permitted storage projects were required to apply for a Class VI permit by 10 December 2011, and these permits are being handled by the regional US EPA offices. As of the end of 2011, no state had applied for primacy in issuing Class VI permits, but several states are in discussion with the US EPA and may take primacy at a future date. The Illinois State Geological Survey leads one of the US Department of Energy regional carbon sequestration partnerships and is developing the IBDP, but the actual permit holder is the Archer Daniels Midland Company which owns the site and is the supplier of the CO2 from its ethanol fermentation facility in Decatur, Illinois.
A second project at Decatur, the Illinois Industrial Sources Carbon Capture and Storage project, submitted a Class VI permit application to the US EPA Region 5 office in Chicago, Illinois in July 2011. This was the first submittal of a Class VI permit in the US at this scale. The project will inject approximately 2.5 million tonnes over three years. This project is an industrial scale-up of the IBDP and the expectation is that the permitting timeline may allow drilling to begin in mid- to late 2012.
US EPA Region 5 is also handling a permit application for a commercial coal gasification project in central Illinois that proposes to produce a combination of electricity and synthetic natural gas and store, or sell for enhanced oil recovery, a major portion of their CO2. Legislative uncertainty exists around the ability of the project to secure offtake agreements, but developers are proceeding with the UIC permitting process in the interim.
In another area, legislation was drafted and introduced to the General Assembly (state legislature) of Illinois in 2011 to address ownership rights of pore space and definitions and requirements related to storage project development in the state. These provisions relate, for example, to unitisation of lease blocks to allow project developers to move forward if the majority (but not all) of affected pore space owners concur with project development. Also, the surface owner would own the pore space storage rights and this distinction would be made relative to any mineral rights owners, as has been done in several other states in the US. These provisions would be in addition to Class VI permitting under the UIC programme. The legislation was not voted on by the full General Assembly in 2012, but it is expected to be revised and reintroduced in the legislative session that convenes from January through May 2013.
Statutory Instrument No. 575 of 2011, European Communities (Geological Storage of Carbon Dioxide) Regulations 2011 (SI), was published on 18 November 2011 and was laid before the Oireachtas on 22 November 2011. The SI transposes the EU CO2 Storage Directive by prohibiting storage of CO2 in amounts greater than 100 kilotonnes in the territory of the state, its exclusive economic zone and on its continental shelf.
No CO2 storage projects are envisaged.
The transposition process of the EU CO2 Storage Directive has been successfully completed and the Directive is now law in the Italian legal framework (legislative decree 14 September 2011, no. 162, Attuazione della direttiva 2009/31/CE in materia di stoccaggio geologico del biossido di carbonio, nonche' modifica delle direttive 85/337/CEE, 2000/60/CE, 2001/80/CE, 2004/35/CE, 2006/12/CE, 2008/1/CE e del Regolamento (CE) n. 1013/2006, published in the Italian Official Journal no. 231 of 4 October 2011). Italy implemented the legislative decree through a number of implementation decrees, including:
In the next 6-12 months, Italy will finalise the legislative decree implementation process outlined above, including starting work on an implementation decree on selection of storage sites (to be issued by September 2013).
According to the legislative decree no. 162 the Ministry of Economic Development and the Ministry of the Environment will make information available to the public regarding the environmental aspects of the geological storage of CO2 under the applicable European and national legislation. Contents and modalities of the dissemination of information were defined by an implementation decree of the Minister of Economic Development in consultation with the Minister of the Environment, issued within 180 days from the date of entry into force of the decree no. 162 (i.e. March 2012).
As part of a process that commenced in 2011 and is envisaged to occur up to 2014, Japan has been accumulating knowledge about the marine ecosystem in waters around Japan, which is essential for the environmental impact assessment review (refer to Article 18.12 of the Marine Pollution Prevention Law).
Work on accumulating knowledge about the marine ecosystem in waters around Japan will continue.
The Ministry of Petroleum and Energy and the Ministry of Labour continue to work on the new regulations on transport and storage of CO2 in sub-sea reservoirs on the Norwegian Continental Shelf. The work has been somewhat delayed, due to internal considerations in the Ministries involved on the formulation of the draft regulations. Consequently, no draft regulations have as yet been submitted for public consultation.
The plan is still to submit two new sets of regulations relating to transport and storage of CO2 in sub-sea reservoirs on the Norwegian Continental Shelf for public consultation at the same time. These regulations will be drafted by the Ministry of Petroleum and Energy and the Ministry of Environment, respectively. The draft worked out by the Ministry of Petroleum and Energy will regulate transport and storage of CO2 in relation to managing the CO2 and the geological reservoirs as natural resources (resource management), as well as issues related to health, safety and work environment in this respect. The Ministry of Environment will regulate the environmentally safe storage of CO2. The two drafts are planned to be submitted for public consultation within the next few months.
In accordance with the requirements of the EU CO2 Storage Directive, Norway plans to include provisions on impact assessments in the new regulations pertaining to transport and storage of CO2 on the Norwegian Continental Shelf. The requirements will be in line with those included in Directive 85/337/EEC as amended, implying that an impact assessment shall be carried out by the operator before development of a storage location on the Norwegian Continental Shelf.
The impact assessment process shall start by the operator formulating a draft programme for the impact assessment. The draft shall be submitted for public consultation for at least 6 weeks and any comments are to be considered as part of finalising the impact assessment programme. This programme will be subject to the approval of the Ministry of Petroleum and Energy. The impact assessment itself shall then be carried out by the operator on the basis of the approved programme. When the impact assessment has been carried out, the assessment shall be submitted to public consultation for a period of three months, and in no case less than 6 weeks. Any comments shall be taken into consideration as the assessment is submitted to the Ministry of Petroleum and Energy as part of a plan to develop and operate the storage reservoir. This plan will then be subject to approval by the Ministry of Petroleum and Energy. The new provisions described above will be based on existing requirements in the Petroleum Act pertaining to petroleum activities on the Norwegian Continental Shelf. Recently, the CLIMIT-programme has started (Programme for Power Generation with Carbon Capture and Storage), more information.
Malaysia undertook a scoping study for CCS in Malaysia in 2010, which investigated amongst other areas the legal and regulatory aspects of the implementation of CCS in the country. The scoping study reported that there was a lack of strong existing legal and regulatory structures in Malaysia to address all three components of CCS, i.e. capture, transport and storage.
As a step forward, Malaysia undertook a number of activities in 2011, including participating in the Global CCS Institute Policy, Legal and Regulatory Study Group (PLR-SG) on 5 October 2011. Malaysia also participated in the APEC CCS Regulatory Review in July 2011 to understand the gaps in the current regulatory framework to address CCS implementation. The findings of the study will form a good platform for launching work on the regulatory regime for CCS in Malaysia.
Malaysia also organised a panel discussion session on Carbon Capture and Storage and Low Emissions Strategy on 9 September 2011 in Kuala Lumpur, as part of the capacity development work programme for the Ministry for Energy, Green Technology and Water (KeTTHA) in collaboration with the Global CCS Institute during the Malaysia International Greentech and Eco Products Exhibition and Conference (IGEM-2011). The discussion covered Malaysia’s current energy outlook and insight on how CCS could fit into Malaysia’s Low Emission Strategy, by providing information on costs, industrial uses for CO2 and perspectives on CCS from different industry players.
Finally, together with the IEA KeTTHA hosted a CCS roundtable in Putrajaya, Malaysia on 21 March 2011. The aim of the roundtable was to explore the current status of CCS globally, including legal and regulatory developments, and the status of the technology in Malaysia.
In the next 6-12 months, Malaysia is expected to continue work on capacity building in CCS. Malaysia will also look into establishing an institutional mechanism to move forward work on CCS. A public-private working group will need to be established to further co-ordinate and plan future work on CCS. Apart from work in the regulatory area, Malaysia will also need to look into CO2 storage and transportation issues.
Aspects of the above mentioned activities will continue.
In terms of public engagement activities in 2011, CCUS was presented as part of the energy sector technological development agenda. In November 2011, a review on energy innovation (Especial de Innovación Energética Sustentable) was published by the Secretariat of Energy and the Investment Promotion Unit of the Secretariat of Economy (Promexico), which included a specific article on CCUS (www.laspaginasverdes.com/energia/).
During the remainder of 2012, we expect to consider public engagement activities as follows:
Since the proposed pilot and demonstration projects are CCS-EOR, public engagement will be
influenced by previous experiences in the power and oil industries. The role of state-owned companies in these projects will potentially facilitate transparency and public engagement.
In 2009, the New Zealand Carbon Capture and Storage Partnership (the Partnership) commissioned research on the potential of CCS for New Zealand. The Partnership includes government and industry contributors. The report was developed to inform the early stages of CCS policy development. The Transfield Worley consortium report CCS in New Zealand – Can Carbon Capture and Storage deliver for New Zealand as we head towards a low carbon future? was released on 2 November 2011. The full technical report and companion summary report can be downloaded at www.straterra.co.nz/CCS.
Broadly, the outcome of the case studies was that case study one (retrofitting an existing power station) is currently uneconomic, and that this is likely to remain the case for the foreseeable future. The economics of case study two (developing a processing plant with CCS) were more favourable, but hurdles to overcome include regulatory uncertainty and public acceptance.
Ultimately, for the potential of CCS to be realised, further work is needed to overcome barriers to its adoption. The Ministry of Economic Development (MED) is taking note of this report and will consider it, and any future reports, in order to inform its policy on CCS. MED’s work programme is focused on ensuring an appropriate legislative and regulatory framework is in place to regulate CCS should it be deployed in New Zealand, and to allow for proactive investment decisions.
The Transfield Worley consortium report referenced above states that there may be a number of social perceptions and concerns that adversely impact the future development of CCS in New Zealand, including lack of knowledge of the benefits of CCS; concern about possible issues in relation to New Zealand e.g. seismic issues and leakage; and opposition to technologies associated with the mining and burning of coal.
In last twelve months, work continued on the preparation of regulations transposing the EU CO2 Storage Directive. In March 2011, the assumptions to amend Polish Geological and Mining Law were adopted by the Council of Ministers. A key element is that the provisions concerning CCS will only apply to the demonstration phase in a transitional period to 2026. On the basis of the assumptions a first draft of an Act was prepared. Currently the Polish Government Legislation Centre in co-operation with the Ministry of the Environment is working on the final wording of the draft. The main issues for now are provisions concerning transfer of responsibility to the competent authority and, related to this, property rights.
Work on the draft of the Act should be finalised in the near future and it will be forwarded for additional consultations with trade unions, employer organisations and The Joint Commission of Government and Local Government (KWRiST). Then the Committee for European Affairs should confirm compliance of the Act with European law and it will be laid down for adoption by government (the Committee of the Council of Ministers and the Council of Ministers). Next the Act will be forwarded to the Parliament, where it will be analysed by the Lower House and then the Upper House.
To identify potential CO2 storage possibilities in Poland, the Ministry of the Environment has launched a National Program Assessment of formations and structures for safe CO2 geological storage, including monitoring plans (2008-2012). Within the programme co-operation with a number of industry stakeholders, as well as with European geological surveys and other organisations of relevant expertise was established. The main goal of the programme is to collect and elaborate country-wide geological information necessary for future decisions on exploration and storage permits, according to the EU CO2 Storage Directive. The scope of this programme includes also public acceptance. There were several seminars, meetings and conferences for public, local authorities, schools and media, to inform about CCS technologies, answer questions and clarify doubts about the safety of CO2 storage processes. The Ministry of the Environment also issued The interactive atlas that presents the capacity for geological storage of CO2 in Poland. Nevertheless entrepreneurs planning to develop CCS demonstration projects play the main role in communication with public.
According to the draft regulations, the key moment where public engagement is to occur in the development of CO2 storage projects will be environmental impact assessment processes both before exploration and at the storage phase. It will be required also in the permitting granting procedure (opinion of the local authorities before exploration and consent before exploitation of the storage site). This will be related with public engagement in land use planning. The role of national authorities and next the operator in those processes will be to propose suitable and safe localisations for geological storage of CO2. To achieve transparency of storage projects, all permits (concessions), protocols from inspections and environmental decisions will be available to the public.
Public consultations are also provided for in legislative processes (assumptions, acts, regulations).
There have been no explicit drafting amendments to the Queensland Greenhouse Gas Storage Act 2009 (GHG Act) over the past twelve months. An amendment included in the Geothermal Energy Act 2010, however, changed the definition of authorised activity to be carried out under the GHG Act. Links between the GHG Act and other Queensland legislation have come under review by CCS proponents during development of target work programmes for exploration and site remediation activity. Potential limitations with regard to the production of water during exploration activities have been identified and trigger requirements under the Water Act 2000. Provisions similar to those in the Petroleum and Gas (Production and Safety) Act 2004 regarding water production related to exploration activities have been suggested as requests for amendment to the GHG Act by the proponents. Testing of the GHG legislation has identified the need for a legislative mapping exercise to be conducted, which is intended to identify the interdependencies apparent between the different areas of resource legislation in the state. Queensland has also continued to participate in development of collaborative frameworks to facilitate CCS projects through the Clean Energy Working Group of the Standing Council on Energy and Resources.
The Queensland Government is currently reviewing the IEA working paper Carbon Capture and the London Protocol: Options for Enabling Transboundary CO2 Transfer. The conditions imposed by the London Protocol for cross border transportation and disposal of CO2 are being used to provide context for interstate legislative frameworks that would be required in the event that subsurface migration of injected CO2 has the potential to cross jurisdictional borders.
The Queensland environment and water regulator has identified the need to develop a guideline for managing the potential impacts of CO2 storage. The guideline is to include a legislative mapping exercise to identify interdependencies between the various environmental and resource management acts and a technical requirements framework for impact assessment. The aim of the guideline is to provide clear and transparent instructions for CCS proponents to prepare and evaluate a site for CO2 storage, without causing environmental harm and/ or adverse impacts on the groundwater systems. The guideline will also assist the regulator in evaluating exploration work plan proposals by removing potential ambiguity in the requirements imposed on CCS proponents. The Department of Environment and Resource Management is working in collaboration with the Department of Employment Economic Development and Innovation in the development of a draft guideline. This collaborative effort is intended to provide appropriate regulatory control for CO2 storage projects without imposing restrictions, which may adversely impact the responsible development of a future CCS industry. This approach is an example of the state’s desire to promote exploitation of its rich natural resource endowment, without causing environmental harm or jeopardising essential groundwater resources.
In October 2011, the South African government published the National Climate Change Response White Paper. In the White Paper, CCS has been named as one of South Africa’s eight Near-term Priority Flagship Programmes which seek to address both mitigation and adaptation, thereby making CCS an integral part of South Africa’s climate change response policy. The CCS Flagship Programme will be led by the Department of Energy (DoE) in partnership with the South African Centre for CCS (SACCCS). The programme includes, among other initiatives, the development of a CCS demonstration plant to store the process emissions from an existing high-CO2 emissions facility. This inclusion represents an important development for CCS policy in South Africa. More details on the implementation of the CCS Flagship Programme will be available in due course.
During the 2nd South African CCS Week (CCS week) held on 24-28 October 2011, the Minister of Energy announced the formation of an Interdepartmental Task Team (IDTT) on CCS. The IDTT will look at all areas of CCS but will have a special focus on CCS legal and regulatory aspects. The IDTT includes the Department of Energy, Department of Environmental Affairs, Department of Mineral Resources, Department of Trade and Industries, Department of Science and Technology, National Treasury and Department of Transport. However, other government departments and state organs as well as private institutions will be invited as and when required. The DoE is in the process of inviting the Department of Public Enterprise into the IDTT. An inaugural meeting of the IDTT was held on 21 November 2011. The establishment of the IDTT was in part informed by the IEA CCS Model Regulatory Framework and the 2nd Edition of the IEA Carbon Capture and Storage Legal and Regulatory Review, both of which highlight the value of such an inter-agency working group. The IDTT meetings occur bi-annually. The IDTT has recently on 14 June 2012 held its first meeting for this year where parties that contribute on issues of CCS (SACCCS and the World Bank) made presentations to the meeting. The IDTT also resolved to further invite parties involved in a study on legal framework development in South Africa to present at its next meeting and to further finalise its terms of reference before the next meeting.
On 4 May 2012 Cabinet announced that in its ordinary meeting held in Pretoria on 3 May 2012, it endorsed the South African Carbon Capture and Storage Roadmap. The announcement went further to state that one of government’s strategic objectives is mitigation against carbon emissions and adaptation to the impact of climate change. South Africa relies heavily on fossil fuels (coal, gas and oil) for energy production.
The Government’s Long-Term Mitigation Scenarios plan identified CCS as one of the options to mitigate CO2 emissions. In addition, South Africa has voluntarily committed to reduce CO2 emissions by 34% in 2020 and by 42% in 2025, on condition that the requisite technological and financial support is provided. CCS can reduce CO2 emission by 80% to 90%. CCS aims to reduce GHG emissions that contribute to climate change, particularly CO2 from sources such as electricity generation plants, coal-to-liquids (CTL) plants and cement manufacturing plants.
A workshop on CCS legal and regulatory aspects was also held during CCS Week, hosted by the DoE with the support of SACCCS and the financial support of the Carbon Sequestration Leadership Forum (CSLF). The workshop brought together international and South African CCS legal and regulatory experts, officials from various government departments, financial institutions as well as multilateral institutions like the IEA, CSLF and Global CCS Institute. The aim of the workshop was to improve the understanding of how legal and regulatory developments could proceed in South Africa. Presentations from the CCS Week legal and regulatory workshop can be found on the SACCCS website.
In November/December 2011, the South African Government hosted the COP17/CMP7 climate negotiations in Durban. On the agenda was the ongoing issue of inclusion of CCS in the Clean Development Mechanism (CDM). Given the importance of CCS to South Africa, the resolution of this issue was made a priority by the South African Government and the chair of the negotiations, the Minister of International Relations and Co-operation – the Honourable Ms. Maite Nkoana-Mashabane. With the South African position being put forward by the DoE, a resolution was reached on the issue of modalities and procedures after six years of effort. This development is critically important for CCS in South Africa as it cements an internationally agreed approach to CCS in developing countries, clearing the path for international CCS funding via the CDM and other future funding mechanisms.
SACCCS, supported by the DoE, also had a presentation stand at the climate change negotiations aimed at informing the public about the basics of CCS as well as the current status of CCS in South Africa. Over the course of the two weeks, SACCCS was honoured to have the President of South Africa, Dr. Jacob Zuma and the Minister of Energy of South Africa, Honourable Ms Dipuo Peters, visit the stand.
The DoE together with SACCCS hosted the CCS seminar as one of the DoE’s side events during COP17/CMP7 in Durban on 1 of December 2011.The purpose of the seminar was, amongst others, to enlighten the public about the challenges and opportunities on CCS technology; the role CCS can play in the fight against climate change; an international perspective on the status of CCS; CCS-readiness of developing, non-Annex 1 countries; and the South African and international CCS perspectives. The seminar was honoured by the participation of the Minister of Energy of South Africa as well as local and international experts on CCS.
In the last twelve months, the DoE and World Bank with the support from SACCCS have also called for expressions of interest for the DoE - World Bank CCS Study Task 1: CCS legal and regulatory. The study, which commenced in the second quarter of 2012, aims to build on work done to date and assist the DoE in developing a CCS legal and regulatory framework that would allow for execution of the CO2 Test Injection and further commercial application of the CCS technology in South Africa.
In the next 6-12 months, South Africa will be holding the follow-up meetings of the IDTT on CCS. The IDTT on CCS will ensure that all the relevant government departments are involved and play their rightful roles in developing CCS.
During this period, SACCCS will complete three studies looking at CCS legal and regulatory aspects in South Africa. The CO2 Test Injection Scoping Study and the South African – European CCS Study (SAfECCS) will together outline how the proposed CO2 Test Injection relates to existing South Africa law. The outcomes of this work will help inform the DoE – World Bank Study. SACCCS will also see the completion of their CCS Ready study which will suggest an appropriate definition of CCS Ready in South Africa.
The DoE will also engage the Global CCS Institute regarding the use of the Legal and Regulatory Toolkit in its quest to develop a fitting CCS legal and regulatory environment for CCS development in South Africa.
CCS public engagement is seen by the South African Government and SACCCS as a prerequisite for the successful development and deployment of CCS in South Africa. As such, public engagement will form a key topic for discussion in the IDTT.
To date, CCS public engagement has been discussed extensively within the DoE and with SACCCS. SACCCS in now in the process of developing public engagement plans around CCS nationally and around the CO2 Test Injection at both a national and local levels. To support this work, CCS public engagement has been included in the DoE - World Bank CCS study as Task 4: Public Engagement. As such, a contractor has been employed to conduct the study expected to be finalised by end December 2012. This task will also look to develop two public engagement plans for the CO2 Test Injection project, one at a local level and the other at a national level. Similarly to Task 1 of the study discussed above, a call was circulated for expressions of interest for Task 4: Public Engagement, with the study looking to commence in the second quarter of 2012.
During the CCS Week in October 2011, there was also a workshop held on CCS public engagement in South Africa. The workshop involved speakers who have first hand experience developing and implementing public engagement plans around real CCS projects – the Decatur project in the US and the Otway project in Australia. The workshop also involved a presentation from Eskom, the national electricity utility, discussing their public engagement experience with power plants in South Africa. The CCS Week and other seminars/ workshops on CCS have also helped to advance public awareness of CCS.
CCS in South Australia is regulated under the Petroleum and Geothermal Energy Act 2000 (P&GE Act) and associated Petroleum and Geothermal Energy Regulations 2000.
Amendments to the legislation in 2009 implemented special purpose gas storage licences and also specified no royalty payments on injection for storage purposes. Gas storage licences allow storage of petroleum, CO2 and other regulated substances under the P&GE Act. To date, nine gas storage licences have been granted in South Australia, and an additional 42 gas storage licences have been applied for. These gas storage applications will be processed towards grants of licences in due course.
The South Australian Government progresses with CCS regulation and technology through active participation in the Carbon Storage Taskforce, the Federal-State Carbon Dioxide Geosequestration Regulatory Working Group, and the Global CCS Institute.
Given sufficient incentives, the injection and storage of CO2 into the depleted oil and gas fields of the Cooper and Eromanga Basins in the state’s northeast is a possibility.
The state government chose to support the CO2CRC (Cooperative Research Centre for Greenhouse Gas Technologies) last year through funding from South Australia’s Plan to Accelerate Exploration, or PACE, Energy program. The new Department for Manufacturing, Industry, Trade, Resources and Energy (DMITRE) is also providing in-kind support towards the CO2CRC’s Research Centre at the University of Adelaide.
Activities (including CO2 storage projects) regulated under the P&GE Act cannot be carried out unless there is an approved Statement of Environmental Objectives (SEO) in place, prepared on the basis of an Environmental Impact Report (EIR). The environment in the P&GE Act includes natural, social and economic environments and hence deals with all associated risks. The EIR is prepared by the proponent and identifies:
The SEO sets out the natural, social and economic environmental objectives to be achieved to address the risks identified in the EIR and specific criteria to be used (by both the proponent and government) to assess the achievement of the objectives. SEO’s are reviewed by DMITRE once every five years to ensure objectives remain up to date and relevant.
The P&GE Act requires an environmental significance assessment to be undertaken by DMITRE on the basis of information provided in the EIR. This assessment classifies the level of environmental impact of the proposed activities, which is then referred to other state government agencies as relevant for concurrence.
Once agreed, the environmental impact classification is used to determine the level of stakeholder consultation that DMITRE will conduct on the EIR and SEO document. In all cases, consultation on the EIR and SEO is undertaken with other state government agencies. For activities classified as medium environmental impact, DMITRE also consults with directly affected landowners, relevant stakeholders and the general public.
All EIRs, SEOs and environmental significance assessments are publicly available documents.
Through the development of the EIR and SEO documents and consultation undertaken by both the proponent and DMITRE, stakeholders (including other state government agencies and landowners) are provided with opportunities to raise any issues of concern they may have with the proposed activities.
No further developments have occurred since the second edition.
It is not possible at the moment to foresee new regulatory developments in the next 6-12 months.
Spain approved Law 40/2010 transposing the EU CO2 Storage Directive in December 2010. Both contain rules addressing public engagement. In this regard, the Spanish Law is fully in line with the directive.
To raise awareness of CCS, the Swiss Federal Office of Energy and Swisselectric research, a private energy research grant-giving organisation, held a workshop titled Carbon Capture and Storage: Current status and future perspectives with a focus on power generation on 31 August 2011. Representatives of Vattenfall, Alpiq, Alstom, various Federal Offices, universities and the Swiss Federal Energy Research Commission discussed CCS in terms of their priorities and the current status in Switzerland. Utility companies underscored that principal hurdles are encountered in storage rather than capture or transport issues. For Switzerland in particular, there does not exist today an enabling political, societal, regulatory and process-oriented framework that would allow planning and execution of CCS projects. Alpiq, a major Swiss utility, concluded that a lack of future for CCS owes to the absence of such a framework rather than technological and geological constraints.
There have been no further developments concerning CCS in the last twelve months.
There are no CCS legal or regulatory developments expected in the next 6-12 months.
In Switzerland, the people are the supreme political authority and have extensive decision-making powers. The longstanding democratic tradition, but also the comparatively small size of the population and the country, as well as a high literacy rate and broad range of media services are crucial to the proper functioning of this particular system of government. Swiss nationals have the following political rights at federal level:
Such extensive rights of participation in decision making and approval procedures not only exist on federal level, but also on a cantonal level.
Public participation under the Spatial Planning Act (SPA)
Although Swiss law does not provide regulation concerning public engagement in the development of CCS storage projects in particular, it provides public participation rights for the development of building projects in general.
Swiss Federal Law only provides the legal framework for spatial planning (article 75 of the Swiss Federal Constitution). The competence for implementation regulation concerning spatial planning resides with the member states of the Swiss Confederation, the cantons (article 10 paragraph 1 SPA). Granting permits for subsurface planning or building fall within the cantons’ remit as well. The mandatory procedures may vary from one canton to another. However, building permits are usually granted by the municipal authorities.
Article 4 of the SPA constitutes a minimal information and participation standard for the public. Authorities entrusted with tasks of planning must inform the public about objectives and procedural processes in accordance with the SPA. Furthermore, they have to make sure that the public has the chance to participate appropriately in the fields of planning. Most cantons and municipalities have established rights of appeal and objection that may be exercised by the public. Furthermore, plans subject to the SPA are public.
Last but not least, SPA articles 33 and 34 stipulate a minimal standard concerning judicial appeal on cantonal and federal level against rulings and planning that are based on the SPA and its implementation regulation.
Public participation under the Environmental Protection Act (EPA)
Furthermore, according to article 55 paragraph 1 EPA and article 12 of the Nature and Cultural Heritage Act (NCHA) environmental protection organisations have the right of appeal against rulings of the cantonal or federal authorities on the planning, construction or modification of installations for which an environmental impact assessment in terms of Article 10a EPA (article 55 EPA) is required or on the planning, construction or modification of installations that lie within the scope of federal tasks (article 12 NCHA), subject to the following requirements:
The right of appeal is available to organisations only for complaints in legal fields that have formed their objects in terms of their articles for a minimum of ten years (article 55 paragraph 2 EPA). The environmental organisations that have the right of appeal are designated by the Federal Council.
The authority notifies the organisations of its ruling under Article 55 paragraph 1 by written notice or by publication in the Official Federal Gazette or in the cantonal organ of publication. If federal or cantonal law provides for an objection procedure, applications must also be published in accordance with paragraph 1 (article 55a paragraph 1 and 2 of EPA / article 12a paragraph 1 and 2 NCHA).
The reference to 268 gigatonnes in Part 1: Developments over the last six months of the Swiss entry in the second edition of the CCS Review should read 2.68 gigatonnes.
In response to Senate Bill 1387 (SB 1387), the statutory impetus and framework for CCS in the State of Texas, the Railroad Commission of Texas (RRC) has promulgated new rules. These rules are codified as 16 TAC Chapter 5 (20 December 2010). These new state rules implement technical, financial, legal, and administrative considerations in accordance with the legislation, and where applicable, in concert with existing state rules. These rules are intended to address issues related to capture and storage of anthropogenic CO2 (CCS-a). Anthropogenic CO2 is approximately defined as “carbon dioxide that would otherwise be released into the atmosphere that has been: separated from any other fluid stream; or captured from an emission source including an advanced clean energy project or industrial source of emission; and any incidental associated substance derived from capture of CO2, and any substance added to CO2 to enable or improve the process of injecting CO2”.
The first phase of these rules dealt with CCS-a as the state analogue of the federally promulgated rules finalised on 10 December 2010. These new federal rules were promulgated under the Underground Injection Control (UIC) Program of the Safe Drinking Water Act (SDWA). The federal rules created a new UIC Class of wells, known as Class VI. These rules are intended for “geologic sequestration (GS)” of CO2 in order to “reduce CO2 emissions to the atmosphere and help mitigate climate change”.
The second phase of the rules was intended to document and quantify CCS-a in association with EOR (UIC Class II) operations. In EOR operations, CO2 is injected at rates less than those expected for commercial storage. The injectate loosens residual oil from mineral grains in the reservoir, thereby assisting in greater oil production. Incidental to the oil production, some of the CO2 is also produced, and some is stored. The CO2 that is produced with the oil is recaptured, and reinjected, rather than released. The CO2 is a purchased commodity and thus is not wasted. Thus, large amounts of CO2 remain in place as a result of EOR operations.
Notwithstanding pending federal rules regarding reporting and management of GHGs, and a potential federal market for carbon credits, there are state incentives for CCS-a in association with EOR. These incentives (e.g.HB 469) allow a reduction in well head taxes levied by the State of Texas on oil production. This part of the rules helps oil and gas operators claim the tax reduction(s).
Another aspect of SB 1387 is a directive to the RRC to pursue state primacy. State primacy is the means by which Texas (or any other state) may gain authorisation from the federal government to administer and enforce federal rules such as those finalised for UIC Class VI. The RRC’s effort to obtain primacy is ongoing.
SB 1387 also required two reports from four state agencies, which were the RRC, the Texas Commission on Environmental Quality (TCEQ), the General Land Office, and the University of Texas Bureau of Economic Geology. These two reports had similar requirements, and thus the four agencies pooled their resources and provided a report to the state legislature that integrated the needs of both. The report published was intended to provide legislative recommendations, commentary pertaining to suitability of certain geologic types of sites within Texas, and insight into the issues of liability and property rights. It was also intended as a policy document for future CCS considerations in the State of Texas.
Staff in the RRC CCS programme have attended and spoken at multiple seminars and workshops regarding history of CO2-EOR and implementation of CCS in Texas. These have included seminars hosted by American Business Conference (San Francisco, June 2011 and Houston, November 2011), the Groundwater Protection Council (Atlanta, September 2011), the Annual Carbon Conference planned by UT-CLE (Austin, February 2012), and the annual TCEQ Environmental Fair (Austin, May 2012). The RRC was part of the impetus for the Global CCS Institute seminar in Austin that was held on 8 November 2011.
Based on comments from the regulated community, in the upcoming months, the RRC expects to receive applications for reduced well-head taxes for oil production as allowed under HB 469. These applications would document CO2 storage in accordance with the second phase of 16 TAC Chapter 5 as described above. Based on additional comments, the regulated community has indicated no desire to undertake Class VI operations in Texas, under current conditions.
Legislatively, there was a recommendation in the above referenced report required in SB 1387 to consolidate jurisdiction of CCS operations in Texas. As currently written, jurisdiction for CCS operations in Texas is split between the RRC and the TCEQ. Jurisdiction is currently given to the RRC in geologic settings that include the production of oil, natural gas, or geothermal resources, as well as in saline aquifers above and below such reservoirs. Other settings are under the jurisdiction of TCEQ. The recommendation made in the report was to consolidate all Class VI operations under the RRC. A bill to achieve that end was filed in the legislature in the past session, but was not adopted. Preliminary indications are that such a bill will be filed in the next legislative session, which is planned for early 2013.
The RRC is working on state primacy in response to the federally promulgated rules finalised in December of 2010. This is a work in progress as described above. Because of decades of rules and established engineering practices in the regulatory purview of the RRC, line by line explanation of equivalence to federal rules (as required in the primacy process) is a complicated endeavour. Also, there is split jurisdiction of Class VI facilities, between TCEQ and the RRC, as described above. Because of split jurisdiction, joint co-ordination, two sets of rules and their reconciliation are required, which further complicates the primacy process.
Public engagement is required by state law in the drafting of rules. Proposed rules are published in the Texas Register, with a comment period of at least 30 days. Each comment must be addressed in the preamble of the rules, and in at least some cases, appropriate changes in the final rules are made to take these comments into account. This process was implemented in promulgation of CCS rules in Texas.
Public engagement in CCS permits is part of the rules promulgated under 16 TAC Chapter 5.
Key points include the following:
Hearing requirements: (1) If the Commission receives a protest regarding an application for a new permit or for an amendment of an existing permit for a geologic storage facility from a person notified pursuant to applicable rules within 30 days of the date of receipt of the application by the Oil and Gas Division, receipt of individual notice, or last publication of notice, whichever is later, then the director will notify the applicant that the director cannot administratively approve the application. Upon the written request of the applicant, the director will schedule a hearing on the application. The Commission must give notice of the hearing to all affected persons, local governments, and other persons who express, in writing, an interest in the application. After the hearing, the examiner will recommend a final action by the Commission. (2) If the Commission receives no protest regarding an application for a new permit or for the amendment of an existing permit for a geologic storage facility from a person notified pursuant to subsection (b) of this section or from any other affected person, the director may administratively approve the application.
The implementation of the EU CO2 Storage Directive entered into force by the following means:
Legislation to amend the Civil Code with regard to long-term liability for CO2 storage is in preparation (see the second edition of the CCS Review).
All preparations for CO2 storage projects on land have ceased since February 2011, when the cabinet decided that CO2 storage offshore would probably be sufficient for mitigating climate change. The cabinet decided then not to support onshore CO2 storage projects. The small scale demonstration project planned in the town of Barendrecht had already been cancelled at the beginning of November 2010.
The General Administrative Law Act (Algemene Wet Bestuursrecht) describes the general public engagement requirements for administrative decisions such as licences or spatial plans. There are differences in procedures depending on the type of decision. Other specific legislation determines which procedure will apply. Sometimes draft decisions are published for public engagement and the possibilities to protest final decisions are limited to court appeal. Sometimes there is no public engagement possible on draft decisions but there is then public engagement possible for final decisions. In cases where the national co-ordination procedure (NCP) applies publication of draft decisions with public engagement is mandatory. For a determination whether a project falls under the NCP, the type of project is important.
However, for every permit/licence/administrative decision concerning the installations or uses of installations for the part of the project falling under the NCP the minister in charge of the NCP can decide to include or exclude certain of those. That will have a consequence for the public consultation.
In terms of how these principles apply to CCS projects:
In general the NCP minister (for CO2 storage, this is the Minister of Economic Affairs, Agriculture and Innovation) can decide on a case-by-case basis which licences of administrative decision will be part of the co-ordination.
Preparations for the ROAD-project (Rotterdam Opslag and Afvang Demonstratie) have continued. Recently the draft licence for the capture unit was published for public engagement in accordance with the existing rules for public engagement. Draft decisions (licences and other decisions e.g. spatial plans) for the pipeline and the storage location will follow separately. The ROAD project will store CO2 captured in the Rotterdam area in a depleted gas field some kilometres off the coast (field P18).
In addition to the legal requirements above, the Ministry of Economic Affairs, Agriculture and Innovation is presently considering additional ways to engage the public, both in the context of CCS and broader energy projects, For example, the government is considering how permanent information centres could help better inform local stakeholders about projects and how local discussions on controversial projects could best be organised in the spirit of “investigate, adapt, engage”.
In October 2011 a decision was taken not to proceed with the first proposed project of the UK’s programme of publicly supported demonstration projects at Longannet Power Station in Scotland, as a deal could not be reached within the GBP 1 billion of capital support available from the UK Government. All parties involved in the project believe that other full chain projects can be delivered within the GBP 1 billion. An extensive amount of detailed technical information was gained through the first competition process and all this is freely available on the Department of Energy and Climate Change (DECC) website to support future deployment of CCS (see the section below on knowledge transfer to support the development of CO2 storage projects).
The UK Government remains firmly committed to CCS, as demonstrated in April 2012 when the government launched the UK CCS Roadmap, which sets out a comprehensive package to take the United Kingdom to cost competitive CCS in the 2020s. The Roadmap is made up of five key components:
The UK’s programme of regulatory developments to permit storage is drawing to a close as measures identified since 2007 are progressively put into effect.
During the last half of 2011 national legislation to implement the EU CO2 Storage Directive was substantially completed. In September measures were put into place to facilitate third party access to CO2 pipelines and storage sites, following a formal consultation. Work is now underway to develop detailed guidance on the implementation of these arrangements.
The Energy Act 2011 contains provisions to facilitate re-use of existing pipeline and storage site infrastructure for CO2 transport and storage.
Relatively minor actions required to round off transposition of the EU CO2 Storage Directive were completed over the last twelve months, including: the coming into effect of regulations dealing with inspections required by article 15 of the EU CO2 Storage Directive; amendment of the Infrastructure Planning (Environmental Impact Assessment) Regulations 2009 by the Department for Communities and Local Government (DCLC) to transpose article 31, which came into force in December 2011; and amendment of the Environmental Impact Assessment Regulations (Northern Ireland) 1999 to reflect the requirements of article 31 in Northern Ireland.
During the summer of 2011 DECC published an Energy White Paper setting out a far reaching package of electricity market reforms. These reforms are the biggest change to the UK market since privatisation and will transform the UK’s electricity network and drive investment in low-carbon generation including CCS. The reforms provide (for CCS):
In March 2010, the UK Government awarded funding to both E.ON UK and the Scottish Power CCS Consortium to carry out Front-End Engineering and Design (FEED) studies as part of the procurement process for the United Kingdom’s first commercial-scale CCS demonstration project. The FEED studies involved detailed engineering and design work enabling the bidders to further their designs for the projects at Kingsnorth and Longannet respectively and to improve their understanding of the risks and associated costs.
The government is committed to disseminating the knowledge from the UK CCS demonstration competition to enable the wider commercial deployment of CCS in the United Kingdom and internationally. This is exemplified in the government's commitment to make the products from both E.ON UK and the Scottish Power CCS Consortium FEED studies freely and publicly available. The FEED study material includes details of the stakeholder profiling work to identify key stakeholders and to understand their CCS knowledge requirements. It also includes details of the regulatory work and related consultation with both statutory and non statutory stakeholders. The amount of information made available through the release of these two FEED studies goes beyond anything previously undertaken globally, in the context of CCS knowledge transfer.
Given the United Kingdom’s transposition of the EU CO2 Storage Directive is now complete, no significant developments are expected in the next 6-12 months.
In August 2011, the US Environmental Protection Agency (EPA) proposed to exclude CO2 streams from EPA’s hazardous waste regulations under the Resource Conservation and Recovery Act (RCRA), if they meet certain conditions, including injection for the purpose of geologic storage (GS) into specific wells regulated under the Safe Drinking Water Act. EPA concluded that the management of CO2 streams under the proposed conditions does not present a substantial risk to human health or the environment, and will encourage the deployment of CCS technologies in a safe and environmentally protective manner while also ensuring protection of underground sources of drinking water (USDWs). This proposed rule is complementary to a recently finalised Safe Drinking Water Act rule that sets requirements for GS, including the development of a new class of injection well, termed Class VI, established under EPA’s Underground Injection Control (UIC) Program. The UIC Class VI requirements are designed to ensure that wells used for GS of CO2 streams are appropriately sited, constructed, tested, monitored, and closed in a manner that ensures USDW protection.
EPA will continue its efforts related to the safety and effectiveness of GS, including developing technical guidance materials for the Class VI rule, continuing to evaluate risks to drinking water sources and human health and the environment, and working to address other key policy issues.
Public input and participation in GS projects has a number of benefits, including: (1) providing citizens with access to decision-making processes that may affect them; (2) educating the community about a GS project; (3) ensuring that the public receives adequate information about the proposed GS project; and (4) allowing the permitting authority and owners or operators to become aware of public viewpoints, preferences and environmental justice concerns and ensuring these concerns are considered by decision-making officials.
GS of CO2 is a new technology that is unfamiliar to most people and maximising the public's understanding of the technology can result in more meaningful public input and constructive participation as new GS projects are proposed and developed. Early and frequent public involvement through education and information exchange is critical to the success of GS and can provide early insight into how the local community and surrounding communities perceive potential environmental, economic, or health effects associated with a specific GS project. Owners or operators can increase the likelihood of success by integrating social, economic, and cultural concerns of the community into the permit decision-making process.
The UIC Class VI final rule adopts the existing UIC public participation requirements at 40 CFR part 25 and the permitting decision procedures at 40 CFR part 124. EPA encourages owners or operators and permitting agencies to involve the public by providing them information about the Class VI permit (and any requests for a waiver of the injection depth requirements or an expansion of the areal extent of an aquifer exemption) as early in the process as possible. Under 40 CFR parts 25 and 124, permitting authorities must provide public notice of pending actions via newspaper advertisements, postings, mailings, or e-mails to interested parties; hold public hearings if requested; solicit and respond to public comment; and involve a broad range of stakeholders.
EPA expects that there will be higher levels of public interest in GS projects than for most other injection activities. The Agency believes that encouraging public participation will help permitting authorities understand public concerns about GS projects and will afford the public an opportunity to gain a clearer understanding of the nature and safety of GS projects and technologies. To address comments about stakeholder participation, EPA amended the requirements for public notice of permit actions and public comment period at § 124.10 to clarify that public notice of Class VI permitting activities must be given to state and local oil and gas regulatory agencies, state agencies regulating mineral exploration and recovery, the Director of the Public Water System Supervision programme in the state, and all agencies that have jurisdiction to oversee wells in the state in addition to the general public.
New forms of information technology can improve public participation and understanding of GS projects. EPA recognizes the importance of social media as a public outreach tool. Social media, which are primarily internet and mobile based technologies for disseminating and discussing information, can help provide accessibility and transparency to a wide audience. EPA encourages permit applicants and permitting authorities to use the internet and other forms of social media to explain potential GS projects; describe GS technologies; and post information on the latest developments related to a GS project including schedules for hearings, briefings and other opportunities for involvement.
On 1 January 2012, Victoria’s Offshore Petroleum and Greenhouse Gas Storage Act 2010 came into force and the associated Offshore Petroleum and Greenhouse Gas Storage Regulations 2011 (Victorian Offshore Regulations) commenced. The offshore legislative framework has effect in Victoria’s state waters up to the jurisdictional boundary with the Commonwealth of Australia (Commonwealth).
The commencement of the offshore legislative framework makes Victoria the first state in Australia with a comprehensive legislative and regulatory framework that provides for CCS (GHG injection and storage) activities in both onshore and offshore areas.
The Victorian Offshore Regulations were made on 13 December 2011, following a detailed consultative process involving workshops with key stakeholders, Victorian government agencies and Australian jurisdictions, including the Commonwealth.
The Victorian Offshore Regulations are a single set of regulations which mostly mirror the range of standalone offshore petroleum and GHG storage regulations made by the Commonwealth.
Victoria has sought to mirror the Commonwealth’s offshore CCS legislative and regulatory framework as far as practicable to mitigate policy and regulatory problems associated with divergent requirements applying to operations that straddle jurisdictional boundaries.
The Victorian Offshore Regulations differ from the Commonwealth regulations in some respects to align with the Victorian-specific regulatory context. For example, the construction of offences aligns with Victorian regulatory drafting conventions and criminal law policy requirements. The limited number of more substantive differences in drafting approaches between Victoria and the Commonwealth are not significant enough so as to jeopardise the mirror nature of the Victorian regulations. Developments expected in next 6-12 months
To underpin the operation of the Victorian Offshore Regulations, Memorandums of Understanding between the Department of Primary Industries (DPI) and other state regulatory agencies will be developed to enhance administrative efficiency and co-operation between those agencies in relation to CCS activities.
Additionally, the onshore Victorian CCS legislative framework, encompassing the Greenhouse Gas Geological Sequestration Act 2008 (Onshore Act) and associated 2009 regulations, is jointly regulated by the DPI and the Victorian Environment Protection Authority (EPA). Under the Onshore Act and regulations, DPI is the primary regulator for CCS operations during the exploration and injection phase, while the EPA becomes primary regulator post-site closure during the monitoring and verification phase of a CCS operation. A Memorandum of Understanding between DPI and the EPA will likely be concluded at some stage this year.
DPI places great importance in community engagement as a means of educating communities, providing community assurance around specific CCS projects and CCS more generally.
Public engagement associated with the Cooperative Research Centre for Greenhouse Gas Technologies (Otway Project) and the CarbonNet Project are well underway.
DPI’s CarbonNet Project commenced a targeted engagement and consultation programme in 2011. This programme is expanding in 2012 as the project progresses.
The Otway Project has undertaken pre-project and post-project public surveys allowing them to compare public perceptions before and after the project.
In 2012, DPI is undertaking social research to enhance existing community engagement approaches and inform the development of a community engagement strategy specific to CCS.
The social research is expected to identify how best to engage the Victorian community in CCS projects. The research will also investigate how best to manage communications and media matters relating to CCS.
Further information on the CarbonNet Project and the Otway Project can be obtained from the DPI Website (www.dpi.vic.gov.au) and The Otway Project website (www.CO2crc.com.au).
Approval to draft a bill amending the state’s Petroleum and Geothermal Energy Resources Act 1967 to include provisions for the onshore transport and storage of GHG was received in August 2010. The bill, titled the Petroleum and Geothermal Energy Legislation Amendment Bill 2011 has reached draft 4 stage. Draft 4 is the initial consultation stage of the bill. Many of the clauses in the bill are modelled on GHG provisions in the Commonwealth’s Offshore Petroleum and Greenhouse Gas Storage Act 2006, including the approach taken for identifying storage formations, site closure and long-term liability.
A consultation draft of the bill, together with an outline of the main provisions of the legislation, was circulated to stakeholders for a five week period for comment on 8 September 2011. The exposure draft of the bill was in a mark-up format to assist consideration of the proposed amendments. Comments received during the consultation process are under consideration in order to complete drafting of the bill, which will then be circulated for final consultation.
It is anticipated that the bill will be introduced into parliament shortly.
Western Australia does not expect to include specific legislation requiring community engagement for CCS projects. However, the Environmental Protection Authority as part of its project assessment expect there to be public engagement. A stakeholder engagement plan was developed with the objective of supporting the business case for the Collie Hub project. Implementation of the stakeholder engagement plan has commenced and will continue throughout the life of the project. The Commonwealth Scientific and Industrial Research Organisation (CSIRO) held a workshop in February 2011 in Harvey. Following the workshop CSIRO compiled a report on the participant views towards low emission technologies and the potential for CCS in Western Australia’s South West. To ensure the community plays a critical role in the assessment and evaluation of The Collie Hub, the WA Minister for Mines and Petroleum the Hon. Norman Moore MLC, established the Lesueur Community Consultative Committee (LCCC). The first meeting of the LCCC was held on 31 August 2011 and regular meetings will be held on a quarterly basis.
This APEC project, currently in progress, is reviewing current activities regarding legal, regulatory, and permitting aspects of CCS implementation in national administrations and international bodies, and synthesising the elements of these that are likely to require particular attention by permitting bodies in developing APEC economies contemplating future CCS implementation.
The project specifically examines permitting regimes in nine developing APEC economies: China, Chinese Taipei, Indonesia, Malaysia, Mexico, Philippines, Republic of Korea, Thailand, and Viet Nam. It assesses regulations that could apply to CCS in five of the economies in depth, and relies on assessments completed for the Asian Development Bank for the other four economies.
The final report, due shortly, will include the results of this review and analysis, identifying the essential elements of a permitting process for CCS projects in these economies, as well as additional mechanisms and structures that might need to be put in place to support the CCS permitting process and monitoring of CCS projects. The report will also include a set of recommendations for cost-effective capacity building in this area for developing APEC economies.
At present, without specific regulatory requirements and/or some form of carbon pricing, the economics of CCS do not favour deployment unless a project receives some form of financial support. There are however some situations where the disposition of the captured CO2 can serve a useful purpose, rendering the project economics more feasible. The most short-term economically practicable example of CCUS is in EOR.
This new project received approval from APEC in late 2011, with the detailed project proposal being developed early in 2012. Its objectives are:
To produce a feasibility assessment for CCUS-EOR in APEC developing economies, including: data and information needs for evaluating CCUS-EOR opportunities; barriers to exploitation of these opportunities; policies and programmes to facilitate the development of large-scale CCUS-EOR demonstration projects; elements of CCUS-EOR permitting frameworks that are likely to require particular attention by the relevant authorities in developing APEC economies; and recommendations for cost-effective capacity-building activities in the area of CCUS-EOR in these economies.
To produce a feasibility assessment for CCUS-EOR in APEC developing economies, including: data and information needs for evaluating CCUS-EOR opportunities; barriers to exploitation of these opportunities; policies and programmes to facilitate the development of large-scale CCUS-EOR demonstration projects; elements of CCUS-EOR permitting frameworks that are likely to require particular attention by the relevant authorities in developing APEC economies; and recommendations for cost-effective capacity-building activities in the area of CCUS-EOR in these economies.
To share experiences in and disseminate the most up-to-date information from APEC, the CSLF and other international fora concerning the identification of potential opportunities for reuse of CO2 from fossil fuel power generation in developing APEC economies, in particular for enhanced oil or gas recovery.
The project should be completed by the end of 2012.
Established in 1989, Asia-Pacific Economic Cooperation (APEC) is a 21-member association of economies from the Asia-Pacific region working together to advance regional economic integration and prosperity. Working Groups carry out APEC's work in specific sectors as directed by APEC Economic Leaders, APEC Ministers, APEC Sectoral Ministers, and Senior Officials. The Energy Working Group (EWG), launched in 1990, seeks to maximise the energy sector's contribution to the region’s economic and social well-being, while mitigating the environmental effects of energy supply and use. The EWG is assisted by four Expert Groups, including the Expert Group on Clean Fossil Energy (EGCFE), which is chaired by the United States. The EGCFE promotes clean and efficient production and use of fossil fuels through gathering and sharing timely information regarding the technical, economic, and policy aspects of clean fossil energy and technologies within the APEC region. The EGCFE implements a variety of activities, including projects, studies, workshops, conferences and other meetings.
The APEC region is the fastest growing region of the world with regard to CO2 emissions, especially from coal power generation. The main objective of the EGCFE’s CCUS activities is knowledge transfer to and capacity building in developing APEC economies to prepare them for when CCS implementation becomes necessary. There is a clear need for capacity building in this area in these economies, and for bringing their representatives into the international discussion. This is especially the case for Southeast Asian economies, which not only have rapidly increasing CO2 emissions, but also potentially significant CO2 storage opportunities.
The Final Declaration of the ninth Meeting of APEC Energy Ministers (EMM10), held in St. Petersburg, Russia, in June 2012, instructed the APEC Energy Working Group (EWG) “to continue its analysis of technologies for carbon capture use and storage (CCUS) and its dissemination of best practices for applying these technologies to new and existing power plants and industrial processes using fossil fuel energy.” The legal and regulatory framework that applies in APEC developing economies will have a key influence on the technology options and best practices.
During the past 7 years APEC has held a successful series of CCS capacity-building workshops in South Korea, China, Indonesia, Mexico and Vietnam. The workshops engage senior cadres of government, industry and academia and are based on the use of extensive CCS workshop training materials developed early in the programme and periodically updated. The materials cover different aspects of CCS in a number of training modules, one of which deals with legal and regulatory aspects of CO2 storage. The latest two workshops in Mexico have focused on training undergraduate students in the geosciences in the area of CO2 storage and on facilitating the implementation of a CCS curriculum in the Mexican educational system.
This APEC project report was published in March 2010. It identifies a number of issues that potentially impact the development and implementation of capture-ready plants both globally and within developing APEC economies. These include some legal and regulatory issues. The final report may be downloaded from the APEC website:
While CSLF activities over the last 12 months have not specifically focused on legal and regulatory issues, activities of the CSLF Policy Group have brought together policymakers and stakeholders to address issues that have implications for legal and regulatory decision making. In particular, the Policy Group’s Task Force on Financing Carbon Capture Utilization and Storage (CCUS) has held a series of workshops to address various models for financing CCUS, which have highlighted legal and regulatory barriers to the financing of CCUS projects.
The CSLF has initiated a project to understand the relationship between geologic risk and legal liability. The relationship between risk and liability is at present often poorly defined or understood. Liability is a legal, accounting and financial concept for a responsibility, duty or obligation. It could be money owed (e.g. to compensate for financial damages) or the obligation to do something (e.g. remediate a release of CO2 from a storage operation), or both. Liability may arise from contracts, either expressed or implied, from torts (i.e. wrongful acts) committed, or from the provisions of legislation or regulation.
In the case of geologic storage, liability will be set primarily by legislation and regulation based on perceptions and assessments of risks, as well as other factors such as perceptions of equity among various stakeholders and the public. A clear gap exists between geologists and policy makers. The project will facilitate interactions and creative analyses to bridge that gap and will produce a report to the CSLF and its member governments. It will kick off with a Workshop on Risk and Liability of Geologic Storage, sponsored in conjunction with the IEA and Global CCS Institute, at the IEA in Paris in July 2012.
The CSLF does not engage the public directly, but rather supports its members in their public engagement activities. It provides this support in three ways – through the development of public outreach materials, through its capacity-building activities, and general stakeholder engagements.
The CSLF Public Outreach Task Force is following a strategic plan to address the barriers to public awareness and acceptance of CCS technology. The principal objectives of the strategic plan are to engage key audiences in a timely manner and meet CSLF Strategic Plan requirements for communications and outreach. The Task Force conducts proactive efforts to engage the public, media and stakeholders. It has developed DVDs and a communications kit and talking points on CCUS. This includes a standard speech and a PowerPoint presentation. These informational materials are used by CSLF members and others. The Task Force maintains the CSLF website, provides news clips to CSLF members and stakeholders on a daily basis and co-sponsors conferences and meetings based on an event recognition agreement. The CSLF is now starting to use social media, including Twitter and Facebook, to convey messages about CCUS.
The CSLF has an extensive programme of capacity building for its developing country members. One area of this support is public engagement. Public engagement activities supporting CSLF member countries include development of a Chinese website on CCUS and workshops in South Africa. The CSLF is working with China to establish the first website focusing on CCS technologies and its development in China. The website will be in both the Chinese and English languages. The aims of the website are to serve as a platform to share information and knowledge on technology advancements and good practices and to educate the public. In South Africa, two workshops were held in October 2011 for South Africa’s CCS week to disseminate information on CCS to relevant stakeholders. In addition, the CSLF is funding a study to improve the understanding of how CCS impacts South Africa’s national priority issues beyond CO2 mitigation and climate change, such as sustainable development, improved local infrastructure, job creation and protection, poverty alleviation, and social upliftment.
CSLF activities are open to stakeholders from both industry and civil society. Stakeholders are active participants in CSLF projects and attend CSLF events, where they can learn about CCUS. For example, approximately 300 stakeholders participated in the 2011 CSLF Annual Meeting in Beijing, China.
CSLF is an organisation of national governments that provides a framework for international cooperation in research, development, demonstration, and commercialisation for the separation, capture, transportation, utilisation and storage of CO2. The CSLF seeks to realise the promise of CCUS over the coming decades, and to ensure that CCUS is both commercially competitive and environmentally safe.
The CSLF is currently comprised of 25 members, including 24 countries and the European Commission. CSLF member countries represent over 3.5 billion people, or approximately 60% of the world's population. Membership is open to national governmental entities. The CSLF also collaborates closely with other international organisations working to advance CCUS, including the IEA, the Global CCS Institute and the Major Economies Forum CCUS Working Group.
The CSLF Policy Group has engaged in many activities related to legal and regulatory issues since the inception of CSLF in 2003. In its early years, the CSLF focused directly on legal and regulatory issues by providing a platform for members to exchange information about regulatory development. A CSLF Task Force developed a report on regulatory issues in 2004 that provided the basis for further consideration by member governments. The CSLF held joint workshops with the IEA on legal and regulatory issues, including workshops in 2006 and 2007 that led to recommendations to the G8 on how to advance CSS, including developing legal and regulatory frameworks. In recent years, the focus of the CSLF activities has not been directly on legal and regulatory issues. Rather the focus has been on working with the IEA, which has the lead in multilateral collaborations in this area, and developing information on relevant topics (such as liability) which have legal and regulatory implications.
The objective of the CCS Regulatory (CCSReg) Project was to develop recommendations that, if adopted, would create a US regulatory environment conducive to capture, transport, and deep geological sequestration of CO2. Anchored in the Department of Engineering and Public Policy at Carnegie Mellon University, the project involved co-investigators at the Vermont Law School, the Washington, DC law firm of Van Ness Feldman, and at the University of Minnesota. The project was launched in early-2010 by a USD 1.85 million grant from the Doris Duke Charitable Foundation. Additional support came from the National Science Foundation (NSF) Center for Climate Decision Making, which supported more fundamental technical and decision analytic work on CCS.
Since the last edition of the CCS Review, the CCSReg project has finalised its draft legislation and prepared a book that builds on the interim report and the six policy briefs from the project. The book is titled Carbon Capture and Sequestration: Removing the Legal and Regulatory Barriers and was published by RFF Press in 2012. The book identifies current law and regulation that applies to geologic sequestration in the United States, the regulatory needs to ensure that geologic sequestration is carried out safely and effectively, and barriers that current law and regulation present to timely deployment of CCS. The authors find the three most significant barriers to be: an ill-defined process to access pore space in deep saline formations; a piecemeal, procedural, and static permitting system; and the lack of a clear, responsible plan to address long-term liability associated with sequestered CO2. The book provides legislative options to remove these barriers and address the regulatory needs, and makes recommendations on the best options to encourage safe, effective deployment of CCS.
The CCSReg project has now fulfilled its objective of developing comprehensive, US-focused recommendations for CCS and the project is winding down. However, participants in the project will continue to work on CCS-related law and policy through other endeavours. For example, work in the NSF sponsored Center for Climate and Energy Decision Making (CEDM) will examine the role of adaptive regulation for energy technologies. The CCSReg website will be preserved and publications from the project, such as the interim report and policy briefs, will continue to be available.
In the United States, injection of CO2 for the purposes of geologic storage (GS) is regulated according to the Underground Injection Control (UIC) programme, Class VI rule or a state-level equivalent, where a state has primary enforcement responsibility (i.e. primacy) for Class VI wells. In the preamble to the Class VI rule, which was promulgated in December 2010, the US EPA acknowledges the importance of early and frequent public participation. However, the public participation requirements for the Class VI well are largely the same as for wells injecting other fluids. A wealth of literature exists that examines the general approach to risk communication, which could be applied to CCS. Furthermore, best practice for community engagement for CCS projects has been examined by the World Resources Institute and the U.S. Department of Energy, National Energy Technology Laboratory. We believe key elements of these guidelines should be incorporated into GS permitting rules, to insure that all GS projects plan for community engagement, just as they plan for well testing, monitoring, and remediation. This could be accomplished using a two-tiered approach that makes expectations clear for both project developers and regulators. First, development and approval of a site-specific community engagement plan should be a requirement for a Class VI permit. Second, the permitting agency should communicate with the local community about geologic sequestration, how geologic sequestration and CCS fit into broader climate change mitigation policy, and the steps in the permitting process.
In the past 12 months, the Global CCS Institute has continued to examine and address the variety of legal and regulatory issues that impact upon the global deployment of CCS. The Institute’s legal and regulatory activity has focused upon the following areas in particular.
The Institute’s annual flagship review of global project developments and key issues affecting CCS deployment worldwide was published in early October 2011. The report contains a detailed Institute-authored chapter addressing the policy, legal and regulatory developments and challenges for the technology, which for the first time also includes a project-level perspective of the legal and regulatory environment.
Extensive surveying and interviewing of projects revealed a number of significant legal and regulatory issues that have either been positively or negatively addressed by the nascent permitting regimes enacted in many jurisdictions. The Institute has continued to work closely with project proponents and regulators since the report’s publication to monitor how these issues have been addressed. A new edition of the Status Report will be published in October 2012; however the 2011 report may be downloaded from the Institute’s website.
Following its publication in early February 2011, the Institute successfully completed the first deployment of the Carbon Capture and Storage Regulatory Test Toolkit (regulatory test toolkit) with the Romanian government, which also builds upon our engagement in the 2010 Scottish exercise. The toolkit exercise was undertaken by the Romanian government to test and improve the legislative framework governing the implementation of CCS projects in Romania; the Getica project’s application for funding under the European Commission’s NER300 was used as a case study.
The project ran from April to September 2011 and culminated in a workshop, which was held in Romania in July 2011. A final report, detailing the processes involved in this deployment and outcomes of the workshop, was published on the Institute’s website in November 2011.
Building upon its earlier reports and briefing paper, the Institute has continued to play an active role in discussions surrounding carbon capture and storage ready.
In July 2011 the Institute hosted a CCS Ready workshop as a side-event to the Asian Development Bank’s Clean Energy Forum. The workshop included presentations from Institute staff, which provided an overview of CCSR and the minimum legal and regulatory requirements associated with the concept. The workshop also provided an opportunity for governmental representatives from Thailand, Philippines, Vietnam and Indonesia to discuss the issue in greater depth, as well as the potential for the implementation of CCSR in their jurisdictions.
The Institute’s Policy, Legal and Regulatory team is presently developing a report, which provides a global status update of CCSR policy development and considers its potential to deliver government climate objectives. The report, which is to be released later this year, is aimed at providing a reference resource for those governments seeking to further develop CCSR policies as part of their broader climate mitigation policy agenda, as well as enhance the understanding of Institute members, potential project proponents and the broader CCS community on CCSR related matters.
The Institute has played a significant role in the United Nations Framework Convention on Climate Change dialogues since 2010, including processes leading up to and following the recent inclusion of CCS in the Clean Development Mechanism (CDM) at COP 17 in Durban.
A representative of the Institute’s Policy, Legal and Regulatory team participated in the meeting of CCS experts in Abu Dhabi in September 2011, where experts engaged in a two-day discussion on the range of technical options for addressing outstanding issues as identified by the Subsidiary Body on Scientific and Technological Advice (SBSTA) on CCS.
Following on from its successful engagement at COP 16, the Institute hosted a number of successful side events at COP 17 in Durban and launched several factsheets and commissioned reports clarifying some of the key considerations for implementing CCS projects under the CDM.
More recently, the Institute attended the second and third meetings of the Technology Executive Committee and participated in the UNFCCC Subsidiary Bodies meeting in Bonn (SB36), where continued negotiations focused upon the practicalities of CCS’s inclusion in the CDM, the Technology Mechanism, the Green Climate Fund (GCF), and establishment of New Market Based Mechanisms. In addition, the Institute has made three formal submissions to the UNFCCC’s Subsidiary Body for Scientific and Technical Advice (SBSTA) regarding modalities and procedures for new market based mechanisms, further consideration on the eligibility of transboundary CCS projects and the establishment of a global reserve of emission reduction units, and pre-COP 17 issues relating to CCS in the CDM.
The Institute has a well-established regulatory work plan, interacting with projects, member countries and its strategic partnership organisations, to examine a range of key legal and regulatory issues. The Institute, in collaboration with the IEA, has been providing Secretariat support to the Carbon Capture, Use and Storage Action Group and provided a final report to the Clean Energy Ministerial in April 2012. The Institute has been tasked with a further programme of work following the meeting.
The Institute expects to undertake further deployments of the regulatory test toolkit in the next 6-12 months and has entered into discussions with a number of developed and developing jurisdictions worldwide. Several other key areas of interest for the Institute, and the focus of its work in the legal and regulatory field in the next six to twelve months, include: project-related long-term liability; engagement in the development of international CCS standards; and addressing those issues that will continue to impact upon the deployment of CCS projects.
The Institute has long recognised the significance of effective public engagement and the importance of embedding public engagement best practices as a fundamental part of CCS project development. Working in collaboration with a number of international partners and project proponents, the Institute has produced a library of over 50 reports, case studies and toolkits, capturing real project experiences and identifying and explaining public engagement best practices in the context of CCS demonstration delivery.
In recognition of the growing importance of this topic to the CCS community, public engagement formed a key theme of the Institute’s 2011 Members Meeting in Melbourne, and is set to remain on the agenda of the Institute’s key events throughout 2012. CCS education, and communicating the risks and benefits of CCS, will form particular areas of focus throughout 2012.
The 2011 Status Report recognised the multiple areas of stakeholder interaction being referred to in any discussion on public engagement, distinguishing between stakeholders with a key influence over project progress such as regulators and site communities, and stakeholder interaction with a much more broadly defined public, including media and environmental NGOs.
Chapter four of the report identifies the final stages of the development planning process as a crucial period for managing public engagement risk. Previous experiences will undoubtedly prove a valuable factor here and the report suggests that, ‘lessons learnt from existing projects will help other project proponents or developing country governments to implement more effective approaches’. The Status Report also solicited project-level information around public engagement this year, enabling a number of valuable conclusions, including the positive finding that 75% of all projects interviewed confirmed they had a public engagement strategy in place or in development.
There have been some key additions to the variety of public engagement themed reports the Institute has been developing, funding and collaborating on. Most important was the completion of a suite of practical guidance documents created in collaboration with CSIRO and the IEA-GHG Social Researchers Network, that provide expert guidance and tools around topics such as stakeholder mapping, creating a stakeholder and communication plan, and communicating CCS risk. These documents will continue to be updated and developed as the Institute receives more project feedback. Each of these documents and the international study that created them are available to download from the Institute website.
IEAGHG is an international R&D programme established as an Implementing Agreement of the IEA in 1991, funded by 21 countries and 25 organisations. It aims to provide impartial and independent information on the role and issues around technologies to reduce GHG emissions from fossil fuel use, focussing primarily on CCS. One of IEAGHG’s objectives is to provide information to ensure that CCS legal and regulatory developments can be based on a sound evidence-base. IEAGHG is involved in many activities to undertake this. It is an actively- contributing observer to the London Convention and UNFCCC meetings when CCS is under discussion or negotiation.
Consequently IEAGHG used its Research Network meetings in 2011 (Modelling, Monitoring, Risk Assessment) to consider the relevant parts of the UNFCCC Cancun Decision on CCS in the CDM, and contributed these into the UNFCCC Workshop on Modalities and Procedures for CCS in the CDM in Abu Dhabi (September 2011). IEAGHG also presented on transboundary issues. Each of the Research Network meetings includes regulatory considerations, and this time the Monitoring Meeting (June 2011, Potsdam, hosted by GFZ) specifically focussed on the role of monitoring (with modelling) in addressing the EU criteria for liability transfer, specifically the conformity of actual CO2 behaviour with modelled behaviour and absence of any detectable leakage. The meeting report and presentations are available on the Monitoring Network web page under www.ieaghg.org/index.php?/networks.html. The Research Networks that cover storage will have held a Joint Networks Meeting in June 2012, in the United States.
IEAGHG also attended the London Convention meeting of Parties in October 2011 as an observer, contributing to the CCS-related discussions (progress and transboundary issues).
Studies that are underway most relevant to the IEA International CCS Regulatory Network include:
One of the international research networks run by IEAGHG is the Social Research Network, which focuses on the social science around public awareness and communication on CCS. However, the three meetings to date (November 2009, November 2010 and April 2012) have not covered regulatory aspects around this area. In terms of general work in the public communications area, as well as producing technical reports, IEAGHG produces more general, information glossy publications for a wider audience. These are used by others in specific public communication activities. These can be found on the web site. In addition, IEAGHG have recently commissioned work on key messages required for public communication needs, which will draw upon information in the IEAGHG technical reports, and produce information briefs, for use by others in their communication activities.
In early 2011, UCL-CCLP launched its European Union Case Studies Project. The objective of the project was to analyse the transposition of the EU CO2 Storage Directive in selected European jurisdictions: the United Kingdom, Germany, Poland, Romania, Spain, and Norway. Reports for each country were released at a one-day workshop on 7 November 2011, entitled Implementing the CCS Directive: Challenges and Opportunities.
September 2011 marked the publication of a new book, Carbon Capture and Storage: Emerging Legal Issues, edited by UCL-CCLP Director, Professor Richard Macrory, along with Ian Havercroft (Global CCS Institute, UCL-CCLP Visiting Fellow) and Richard Stewart (New York University). The book brings together some of the world's leading practitioners and scholars working in the field of CCS law and regulation to provide a critical assessment of progress to date and challenges on the horizon.
UCL-CCLP staff were also invited to contribute to the following international CCS events:
UCL-CCLP continued to add new material to the Legal Resources section of its website, including pages on CCS legislation in onshore Australia, property rights in Canada, the EU CO2 Storage Directive transposition, as well as a new Think Piece on the role of enhanced oil recovery in the CCS debate.
In addition to ongoing analysis of global legal and regulatory developments published in the Legal Resources section of its website, UCL-CCLP will be focusing on the following projects:
Financial Security Study that will explore the issues surrounding mandatory financial security
UCL-CCLP’s November 2011 workshop also focused on practical examples of public engagement in CCS and the extent to which legal procedures can or cannot assist the public participation process. The session was a follow-up to UCL-CCLP’s 2009 Public Participation and the Law conference, where lessons for CCS public engagement were drawn from previous experience with other novel technologies. The 2011 workshop brought together a unique mix of speakers and participants, attracting – in addition to the usual CCS stakeholders – leading environmental lawyers and public participation specialists who were able to bring insights from the implementation of other EU directives and the introduction of other new technologies.
Key points that emerged from the workshop included the following:
Over the last six months, the World Bank has published its cross regional analytical study entitled Carbon Capture and Storage in developing countries: a perspective on barriers to deployment: Regional Perspective in Developing Countries. One of the four programme elements of the report focused on regulatory and institutional frameworks related to CCS in the case study regions, namely in the Southern African and Balkan regions. The objectives of this programme element were two fold: 1) to identify gaps in the existing legal and regulatory frameworks that may prevent the development of cross-boundary and national CCS projects; and 2) to suggest approaches to address the identified gaps to remove the regulatory and legal barriers to CCS deployment. For the Southern African region, the review analysed the relevant laws at the multilateral, regional, and national levels in the Republic of Botswana, the Republic of Mozambique, and the Republic of South Africa, and within the regional electricity network, the Southern African Power Pool (SAPP). For the Balkan region, the same analysis was conducted for Bosnia and Herzegovina, Kosovo, Serbia and relevant EU Directives. The analysis focused on the following eight issues:
One conclusion that emerged from the review of these two regions is that at present, there is no international convention that specifically addresses issues related to CCS. However, the study also noted that certain sectoral agreements and conventions are of general relevance to the CCS context (such as those agreements related to the transport of hazardous wastes or oceans) while some could be applied to regulate certain aspects of CCS activities (including conventions related to marine pollution and climate change). Furthermore, the study concluded that while none of the countries examined in the study has dedicated legislation on CCS or laws that include any explicit references to CCS, most of the countries appeared to have basic elements in their existing legal framework that could address certain aspects of the key issues. Moreover, the study found that, even with the absence of any specific laws or regulations, general rules and concepts (e.g. common law principles) relating to relevant issues, such as pollution control and liability, are often applicable to certain aspects of CCS activities.
Three workshops were held (May 2011, in Dubrovnik, Croatia; June 2011 in Johannesburg, South Africa; and September 2011 in Washington, DC) to present the findings of the study and to discuss the work programmes of other multilateral development banks, international organisations and research institutes relevant to CCS in developing countries.
During the next 6-12 months the World Bank plans to launch a new project focusing on assessing potential for realisation of CCUS in industrial applications in selected developing countries. The objective of the proposed activity is to identify and inform government and industry about available low cost early opportunities for CCUS in industry sectors to enable the deployment of CCUS through public-private business models, and appropriate incentive regulations and policies to support such activities. The selection of countries for the subject assessment will be finalised based on the level of interest and data availability from potential counterparts.
In addition to development of this third edition of the CCS Review, key IEA activities relevant to CCS law and regulation since publication of the second edition include: the fourth meeting of the IEA International CCS Regulatory Network (Network); continuation of the Network web conference series; publication of the IEA Carbon Capture and Storage and the London Protocol: Options for Enabling Transboundary CO2 Transfer paper (London Protocol paper); initiation of the IEA International CCS Law and Regulation Database project (CCS Database); publication of the Tracking Progress in Carbon Capture and Storage: International Energy Agency/ Global CCS Institute report to the third Clean Energy Ministerial; and release of IEA flagship publication Energy Technology Perspectives 2012. The IEA continued to engage with both IEA member and non-member country governments that are developing or planning to develop CCS regulation. We have also released several other reports on broader aspects of CCS policy, including A Policy Strategy for Carbon Capture and Storage (see section 6 above), Combining Bioenergy with CCS, and CCS Retrofit.
The fourth meeting of the Network was held at the IEA in Paris on 9 and 10 May 2012. The objective of the meeting was to: provide an update on government efforts to develop and implement CCS legal and regulatory frameworks; and consider ways in which governments are dealing with some of the more difficult or complex aspects of CCS regulation.
The meeting was organised into eight topical sessions spread over two days, in addition to opening and closing sessions. Each topical session was chaired by an expert in the field and included time for either open discussion or a panel discussion. Presentations on the first day provided updates on CCS regulatory developments in Africa, the Americas, Asia, Australia and Europe, as well as international legal developments relevant to CCS. Presentations and panel discussions on the second day focused on key CCS regulatory issues, including: assessing risk and managing liability; third party access to CCS infrastructure; competition between resources; transboundary issues; pore space management; calculating financial contributions to long-term stewardship; and regulatory issues associated with enhanced oil recovery.
In addition to the fourth face-to-face meeting of the Network, the IEA hosted three web conferences: Transposition of the EU CO2 Storage Directive: Current Status and Outstanding Issues (21 March 2012); CCS outcomes from Durban and next steps for CCS in the CDM (2 February 2012); and Talking process: Steps in Developing Regulatory Frameworks for CCS Demonstration and Commercial Deployment (18 July 2011).
For CCS to reach its emissions reduction potential, the 2009 IEA publication Technology Roadmap: Carbon capture and storage recommends, amongst other things, that international legal obstacles associated with global CCS deployment be removed by 2012 – including the prohibition on transboundary CO? transfer under the London Protocol.
The London Protocol was amended by contracting parties in 2009 to allow for cross-border transportation of CO? for sub-seabed storage, but the amendment must be ratified by two-thirds of contracting parties to enter into force. It is unlikely that this will occur in the near term, given: the required number of ratifications; the number of ratifications to date; current contracting party interest in CCS; and difficulties associated with the ratification process.
The IEA therefore released the London Protocol paper in October 2011, which identifies and evaluates options that might be available to contracting parties under international law to overcome the barrier to deployment presented by Article 6, pending formal entry into force of the 2009 amendment. The paper was presented to London Protocol contracting parties in October 2011.
This year, the IEA began developing a publicly-available, internet accessible database of existing CCS law and regulation. The IEA International CCS Law and Regulation Database (CCS Database) will consolidate and make more accessible information on key global approaches to a broad range of CCS regulatory issues, building on IEA progress tracking and facilitating CCS regulatory developments world-wide. It is intended to:
The target audience for the CCS Database will be CCS policy makers, policy analysts and other individuals who are likely to support or advise governments in the development of CCS regulation, including lawyers, academics and industry. The CCS Database will catalogue, both in high-level summary form and by inclusion of relevant legislative extracts, how relevant legal instruments address key regulatory issues associated with CCS, as derived from regulatory issues identified in the IEA’s 2010 Carbon Capture and Storage Model Regulatory Framework (Model Framework). Users will be able to gain an understanding of whether and how a particular jurisdiction deals with any particular regulatory issue, and how specific issues are addressed across multiple frameworks. The CCS Database is being developed in collaboration with Baker & McKenzie (Sydney) and UCL-CCLP, amongst others.
Legal and regulatory aspects of CCS deployment were addressed in the IEA/ Global CCS Institute CEM 3 Progress Report: see section 4 above.
In June 2012, the IEA released its biennial future energy scenarios study, Energy Technology Perspectives (ETP 2012). ETP 2012 aims to identify the technology and policy needs that will enable a global decoupling of economic activity, energy demand and emissions, limiting energy-related CO2 emissions to those consistent with a 2°C global average temperature rise. The study examines the role that fuels and technologies – including CCS – will play in the 2°C scenario (2DS) across all sectors of the global economy. The study sees CCS contributing one-fifth of the total emissions reductions globally through 2050 in the 2DS. It also concludes that CCS is the only currently available technology that could allow industrial sectors, such as iron and steel, cement, natural gas processing, etc., to meet deep emissions reduction goals and that, in some regions, CCS plays a larger role in reducing emissions from industry than from electricity generation. Given the large role for CCS, ETP 2012 makes seven specific recommendations for policy actions, from better developing information on the distribution and cost of storage capacity to engaging the public at both project and policy levels.
ETP 2012’s key conclusion on CCS law and regulation is that great strides have been made in the last few years in regulating CO2 storage, but the absence or incomplete implementation of laws and regulations still present barriers to development of storage projects. Therefore, in jurisdictions that plan to undertake CCS, governments must ensure that legal and regulatory frameworks, or a lack thereof, do not unnecessarily impede demonstration and deployment of CCS.
The IEA continues to engage with member and non-member countries on development and implementation of CCS regulation as part of the IEA CCS Unit’s broader outreach programme.
On 28 July 2011, the IEA hosted a CCS legal and regulatory working meeting with the Indonesian Ministry of Energy and Mineral Resources (Directorate General Oil and Gas) in Jakarta, Indonesia. The aim of the working meeting was to support the Indonesian government’s efforts in developing CCS regulation and associated policies. The working meeting addressed this aim by bringing together key Indonesian government stakeholders, regulators from countries advanced in CCS regulation and other experts, to: share experience and knowledge around some of the most challenging CCS legal and regulatory issues; and discuss and work through key technical issues relevant to CCS regulation and policy, as identified by Indonesian CCS agencies. The first half of the meeting provided an update on legal and regulatory developments in Indonesia, internationally and in a number of specific jurisdictions advanced in CCS regulation. The second half of the day involved focused discussions around four key CCS issues selected by the Indonesian government, both legal and technical.
In February 2012, the IEA and the Mexican Ministry of Energy (SENER) jointly hosted a workshop to discuss policy strategy options for CCS in Mexico, further develop understanding of CCS activities in the country, and identify key drivers and challenges for CCS in Mexico’s national context. The workshop brought together approximately 40 participants from Mexican government, industry, and academia, and external experts from international organisations, companies and government. The meeting was two days long, the first day consisting of multiple panel sessions on topics of interest to SENER, while the second day was a roundtable discussion that addressed detailed aspects of policy and regulatory development.
The IEA provided expert input into the Alberta RFA process, participating in the RFA’s Regulatory Working Group, and also the work of the London Protocol contracting parties to update the 2007 Specific Guidelines for Assessment of Carbon Dioxide Streams for Disposal into Sub-seabed Geological Formations to reflect the 2009 amendment to enable transboundary transfer of CO2 for sub-seabed storage.
The IEA also engaged directly with key stakeholders in South Africa, Mexico, Canada, Vietnam, Indonesia and several EU member states through a series of bilateral meetings.
In addition, the IEA presented IEA CCS legal and regulatory work and global developments in CCS regulation at numerous conferences and events globally.
The IEA will continue efforts to support national level CCS framework development over the next 6-12 months.
The IEA’s key, anticipated output is the launch of the CCS Database, which is scheduled for the end of third quarter 2012.
The IEA will continue the activities of the IEA International CCS Regulatory Network, including holding a fifth face-to-face meeting in the first half of 2012, and quarterly web conferences.
The IEA is currently leading projects on long-term liability and CO2-EOR. These projects seek to provide advice to our member governments, as well as others, on the possible options to manage long-term liability associated with CCS and their relative merits, and the technical, regulatory, and policy needs if CO2-EOR is to be undertaken for the purposes of emissions mitigation (i.e. CCS). Both projects have expected completion dates in 2013.
The IEA welcomes suggestions for additional work in the area of CCS legal and regulatory analysis.
Carbon Capture and Storage Legal and Regulatory Review © — OECD/International Energy Agency, 2012.
Disclaimer: The CCS Review contains contributions from various governments and other organisations. Users of this publication should note that the CCS Review contains only selected updates on CCS regulation. It is not intended to be exhaustive and does not constitute any form of advice, including legal, on any specific issue or situation. The IEA makes no representation or warranty, express or implied, in respect of the CCS Review's contents (including its completeness or accuracy) and shall not be responsible for any use of, or reliance on, the CCS Review. The CCS Review does not necessarily represent the views or policies of the IEA Secretariat or individual IEA member countries. Terms and conditions of use here.