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Status of Policy and Regulatory Frameworks for CCS

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Presentation delivered to a Global CCS Institute symposium on Policy and Regulatory Frameworks for CCS in Tokyo on 3 September 2013. Presentation by Ian Havercroft of the Global CCS Institute.

Presentation delivered to a Global CCS Institute symposium on Policy and Regulatory Frameworks for CCS in Tokyo on 3 September 2013. Presentation by Ian Havercroft of the Global CCS Institute.

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  • 1. CURRENT STATUS OF POLICY AND REGULATORY FRAMEWORKS FOR CCS IAN HAVERCROFT CCS Symposium on Policy and Regulatory Framework, Tokyo, Japan 3 September 2013
  • 2. OVERVIEW  International action on CCS  United States – Federal and State-level regulation  Implementation of the European CCS Directive  Australia – completing the policy and regulatory picture  Canadian regulatory initiatives  Developing country activity  Long-term liability – a critical issue for deployment  Developing frameworks – considerations for policymakers and regulators 1
  • 3. INTERNATIONAL ACTION  Significant developments under the auspices of international and regional agreements have reinforced global commitments to CCS, including: o inclusion of CCS in the London Protocol and OSPAR Convention; o adoption of rules for including CCS in the Clean Development Mechanism (CDM); and o recognition of CCS in discussions leading up to a 2015 climate change agreement.  Establishment of an ISO Technical Committee to progress the standardisation of CCS across the capture, transport and storage phases.  Despite these successes, a number of outstanding issues remain: o ‘transboundary movement’ under the London Protocol. 2
  • 4. UNITED STATES  Federal and State-level governments have implemented a number of policy initiatives, which will impact upon the development and deployment of CCS in the US.  Despite the absence of an over-arching Federal regulatory regime for CCS: o amendments to legislation aimed at protecting underground sources of drinking water; and o provide a regulatory basis for the injection of CO2 (‘Class VI Rule’).  State-level action constitutes a far-greater body of CCS- specific legislation.  Detailed and historical pathways for the regulation of Enhanced Oil Recovery (EOR). Federal and State-level regulation: 3
  • 5. UNITED STATES  Recent announcements in President Obama’s Climate Action Plan include several issues of relevance to CCS: o EPA directed to propose and finalise pollution standards for both new and existing power plants; o End of US support for the public financing of new coal plants overseas – save for those deploying CCS.  Several anticipated legal and regulatory developments remain outstanding: o further guidance documents on the Class VI ‘transition’; and o conditional exemption from the RCRA hazardous waste regulations for geological storage activities. Federal and State-level regulation: 4
  • 6. EUROPE  The Directive on the geological storage of carbon dioxide (Directive 2009/31/EC) provides a comprehensive, but efficient regulatory model: o addresses the novel aspects of the technology; o utilises several familiar concepts to regulate and incentivise; o affords discretion to Member States (MSs) to implement many aspects; and o complemented by a series of guidance documents.  Original transposition deadlines were not met by the majority of MSs, however this position has improved: o Commission is now focusing upon the adequacy of the national implementing legislation. Implementation of the EU CCS Directive: 5
  • 7. EUROPE  Project proponents and regulatory agencies are already using these nascent permitting regimes in many MSs: o divergent approaches to transposing the Directive in many of the jurisdictions.  However, a number of legal and regulatory issues are still to be addressed – particularly evident in the responses to the Institute’s annual survey of LSIPs.  Directive operates as part of a broader policy framework developed to support the deployment of the technology.  Consultative Communication on CCS and broader Green Paper were issued by the Commission in March 2013: o consultation period for the Green Paper ended 2 July 2013. Implementation of the EU CCS Directive: 6
  • 8. AUSTRALIA  Australia is an ‘early-mover’ jurisdiction - substantial policy, legal and regulatory interventions have sought to support the technology’s deployment.  Federal government has introduced a number of direct support programmes for the technology, as well as enacting a regulatory framework: o Offshore Petroleum and Greenhouse Gas Storage Act 2006 governs storage activities in Commonwealth waters; and o secondary legislation provides further detail to the permitting regimes and processes.  States of Queensland, Victoria and South Australia have also developed regulatory models and project-specific legislation in Western Australia. Completing the policy and regulatory picture: 7
  • 9. AUSTRALIA  Australia’s climate change policy approach continues to evolve: o earlier transition to an emissions trading scheme (2014); and o linkages with the EU ETS also brought forward.  Some regulators have indicated their regulatory frameworks are largely complete, however: o further work is necessary to ensure that a nationally consistent approach is adopted; and o legislation has yet to be enacted in New South Wales and Western Australia.  State of Victoria has been working with the Institute to deploy the Institute’s regulatory test toolkit: o final report to be released by the end of the year. Completing the policy and regulatory picture: 8
  • 10. CANADIAN REGULATORY INITIATIVES  Canada committed to CCS, which remains an integral aspect of its climate change policies.  Legal and regulatory development has principally occurred at the provincial level: o Alberta, Saskatchewan, British Columbia and Nova Scotia have all undertaken legal and regulatory activities.  Alberta remains at the forefront of legal and regulatory developments in Canada: o enacted amendments to oil and gas regulatory regime in 2010, which remove barriers to the technology; o multi-stakeholder Regulatory Framework Assessment (RFA) process concluded in December 2012; and o RFA report was published in August 2013. Federal and provincial action: 9
  • 11. DEVELOPING COUNTRY ACTIVITY  Increasing interest from developing countries in reducing their domestic legal and regulatory uncertainties with regard to CCS: o assessment of the capacity of existing regulatory capacity; and o early consideration of the approach to be adopted in regulating the technology.  The Institute has recently worked with the government of Malaysia to undertake an assessment of their existing legal and regulatory regime: o considered the application of existing regulatory regimes to a hypothetical project; o report published by the Institute in July 2013. 10
  • 12. LONG-TERM LIABILITY  Legislation, where it addresses the issue, has largely focused upon managing operational and long-term liabilities across the project life-cycle: o examples to be found in EU and Australian legislation.  Operational liabilities to be largely borne by the operator: o obligations under a permit, remediation of damage to the environment and ‘climate damage’.  Closure of the storage site and potential for transfer to a competent authority: o operator’s obligations for closure of a storage site; and o potential for post-closure transfer of responsibilities for a storage site under some legislation. A critical issue for deployment: 11
  • 13. LONG-TERM LIABILITY  Uncertainties remain in some jurisdictions: o legislation is ‘silent’ on long-term liabilities; o possibility of residual liabilities post transfer (e.g. under the common law); and o ambiguity in some of the terminology and definitions.  Project surveying reveals that some issues around liability remain critical for projects: o ROAD permitting study includes a detailed assessment of the legal liabilities for the project.  Efforts to clarify legislation surrounding long-term liability: o EU Guidance Documents provide expanded analysis of terminology and requirements in the Directive. A critical issue for deployment: 12
  • 14. DEVELOPING REGULATORY FRAMEWORKS  Progress made to date with the development of CCS-specific legislation, reveals several important considerations.  Pathways to regulating the technology are jurisdiction- specific: o Important considerations around how to address the novel aspects of the technology; o Interactions with existing energy and environmental legislation – to regulate or provide incentives; and o Specificities of domestic situation must be addressed.  Body of material which may provide useful examples and models for new legislation: o Work of international organisations in the L&R space – fora for discussion and publication of resources. Considerations for policymakers and regulators: 13
  • 15. GLOBALCCSINSTITUTE.COM