CCS Legal and Regulatory Issues CCS within the UNFCCC – what it all means today and post-2012 Paul Curnow Baker & McKenzie COP 17 Durban 2 December 2011Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology usedin professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly,reference to an “office” means an office of any such law firm.
Presentation overview1. CCS regulatory issues2. Overview of regulatory trends3. Overview of recent developments4. Conclusions 2
Leaders in regulatory development– There is no one template or single "best practice" for end- to-end CCS regulation with even the most robust existing frameworks having gaps.– Australia, Canada, US and EU leaders in regulatory development.– CCS development is clearly linked to funding initiatives, with more progress taking place in jurisdictions where grants are available. 6
Staged approach to legislative and regulatory development Research and Mapping Brazil, Indonesia, Malaysia, Mexico Policy Development China, India, South Korea, South Africa Australia (WA – general), Australia (NSW), EU Drafting Legislation Member States Primary Legislation / Australia (Vic, Qld, WA – Gorgon, SA), Canada Amending Existing Law (Saskatchewan), Japan, US (Illinois, Texas) Supporting Regulations Australia (Federal), Canada (Alberta), Norway 7
Integrated vs piecemeal– Australian, Canadian and US States developing integrated laws.– Pressure of transposition in the EU has lead to: – Combination of new and amendments to existing laws; – Smaller MS to implement stand alone storage specific laws with the intention of later amending existing laws to regulate other project activities.– Developing countries (China, South Korea and South Africa) remain in early stages but steps taken to explore potential legal frameworks. 8
Responsible agencies – A number of different types of agencies driving development. Environment Energy Science &Japan, US EPA, EU and Alberta, Technology many Member States Saskatchewan, Malaysia, Mexico China Mining & Petroleum Coal Combination India South Africa Australian States, Brazil, Indonesia 9
International Developments– COP decision at Cancun to include CCS projects in the CDM subject to development of modalities and procedures.– Draft Modalities & Procedures for CCS in CDM Published (8 November 2011)– London Protocol work plan adopted with timelines to conduct the review of 2007 Sequestration Guidelines – UK leading correspondant.– OSPAR Convention amended to allow storage in the North Atlantic.– Pledges from developing countries to undertake nationally appropriate mitigation actions under the Cancun Agreements and Copenhagen Accord. 11
European Union– Obligation on MS to transpose CCS Directive by 25 June 2011.– Resulted in political decisions regarding whether to allow or ban storage.– 12 MS have notified the EC of transposition.– Many have only transposed parts of Directive.– Discussions on transposition expected to continue. 12
US and Canada– Alberta: integrated framework for CCS permitting though the Alberta Carbon Capture and Storage Statutes Amendment Act 2010 and the Regulatory Framework Assessment process.– Saskatchewan: updated a number of existing laws, such as the Pipelines Act, Crown Minerals Act and Oil and Gas Conservation Act, to facilitate CCS as part of the enhanced oil recovery process.– Illinois: adopted project specific legislation for the FutureGen project in the form of the Clean Coal FutureGen for Illinios Act 2011. 13
Australia– Amendments to Federal legislation and new regulations regarding offshore CCS project developments.– Developments in facility operational standards.– WA and NSW preparing stand- alone legislation for CCS – h/w to be based on existing petroleum exploration and exploitation regimes.– Introduction of proposed carbon price mechanism. 14
Developing Countries– Beginning to undertake CCS mapping.– Considering policy and regulatory options.– Actions compliment pledges to undertake nationally appropriate mitigation actions under the Cancun Agreements and Copenhagen Accord.– South Africa is taking prepatory steps towards CCS policy formulation.– South Korea has prepared comprehensive national CCS implementation plan and now working towards legal framework. 15
Conclusions– CCS inclusion in the CDM will provide added incentive to accelerate the establishment of regulatory frameworks in developing countries.– Expect regulators to begin to consider ways to address some of the challenges emerging with early integrated CCS demonstration projects: – Managing competing tenures; – Avoiding monopolies for pipeline transport and storage; – Converting EOR projects to storage projects; – Barriers to transportation under international law; and – Managing public perception and transparency of process. 17
Thank you.Paul CurnowPartner+61 2 8922 5173Paul.firstname.lastname@example.orgBaker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology usedin professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly,reference to an “office” means an office of any such law firm.