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Session 3: The EU CCS Directive – three different approaches:
the UK, the Netherlands and Norway
Tuesday 25 March 2014, 09...
Junior Professional Legal and Regulatory Tutorial Group
The Junior Professional Legal and Regulatory Tutorial Group is a G...
Craig Hart
Craig Hart is the ENN Group Associate Professor at Renmin
University of China's School of Environment and Natur...
Pamela Tomski
Pamela Tomski is the Senior Advisor, Policy and Regulatory –
Americas at the Global CCS Institute. She has o...
Diana Poputoaia
Diana Poputoaia has over 7 years of experience of providing legal
advice on structuring, financing and per...
QUESTIONS
 We will collect questions during
the lecture.
 Your tutors will pose these
questions to the lecturer once
the...
The EU CCS Directive – three
different approaches:
the UK, the Netherlands and Norway
24/03/2014
TOPICS
1. The EU CCS Directive
2. Transposition of the EU CCS Directive
3. Main barriers and proposed solutions
4. Conclus...
1. The EU CCS Directive (I)
• The common denominator for the CCS regulatory
frameworks across the EU by setting:
– Princip...
1. The EU CCS Directive (II)
• November 2013 – the European Commission:
– Has requested Austria, Cyprus, Hungary, Ireland,...
2. Transposition of the CCS Directive (I)
• The UK:
– Integration of the CCS Directive into existing
legislation
– Leader ...
2. Transposition of the CCS Directive
(II)
• Norway:
– The CCS Directive entered into force on 1 June 2013 –
it had to be ...
2. Transposition of the CCS Directive
(III)
• The Netherlands:
– Literal transposition of the CCS Directive
– The ROAD pro...
3. Main barriers and
proposed solutions (I)
• Financial security
– Article 19 of the CCS Directive
– The main uncertainty ...
3. Main barriers and
proposed solutions (II)
Barrier Country specific considerations
The UK The Netherlands Norway
Financi...
3. Main barriers and
proposed solutions (III)
• Transfer of responsibility
– Article 18 of the CCS Directive
– Lack of cle...
3. Main barriers and
proposed solutions (IV)
Barrier Country specific considerations
The UK The Netherlands Norway
Transfe...
3. Main barriers and
proposed solutions (V)
• Financial contribution under the financial mechanism
– Article 20 of the CCS...
3. Main barriers and
proposed solutions (VI)
Barrier Country specific considerations
The UK The Netherlands Norway
Financi...
4. Conclusions
• The role of public authorities can be extremely important: driver or
barrier
• No transposition method ma...
QUESTIONS / DISCUSSION
Please submit your questions in
English directly into the
GoToWebinar control panel.
The webinar wi...
Tutorial Extranet Group:
https://inside.cleanenergyconnect.com/groups/junior-professional-legal-
and-regulatory-group-2014
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Junior Professional Legal and Regulatory Group: Session 3 Lecture and Tutorial

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Transcript of "Junior Professional Legal and Regulatory Group: Session 3 Lecture and Tutorial"

  1. 1. Session 3: The EU CCS Directive – three different approaches: the UK, the Netherlands and Norway Tuesday 25 March 2014, 0900 AEDT
  2. 2. Junior Professional Legal and Regulatory Tutorial Group The Junior Professional Legal and Regulatory Tutorial Group is a Global CCS Institute learning opportunity, presented by leading experts, that focuses on developing the CCS legal and regulatory knowledge of junior professionals, recent graduates and students. Session 1 Sallie Greenberg Public Engagement RCSP Project Development and the Legal Issues, Class VI permitting issues Session 2 Steve Carpenter ISO process Session 3 Diana Poputoaia EU Transposition of CCS Directive in Romania Session 4 Andrew Gilder CCS in South Africa
  3. 3. Craig Hart Craig Hart is the ENN Group Associate Professor at Renmin University of China's School of Environment and Natural Resources and a Lecturer at Johns Hopkins University's Energy Policy and Climate program. As a practicing attorney, he has over 15 years' experience practicing law in the fields of project finance, carbon finance and capital markets. He has represented project developers in the United States geologic sequestration demonstration projects, in China on Ingtegrated Gasification Combined Cycle (IGCC) power projects under China's 863 Program, and has advised industry groups and international organizations on CCS policy and regulation in the United States and Asia. He is currently conducting separate studies of CCS regulation for Asia-Pacific Economic Cooperation (APEC) and the Asian Development Bank covering nine developing countries. He holds a PhD from the Massachusetts Institute of Technology and a JD from the University of California at Berkeley.
  4. 4. Pamela Tomski Pamela Tomski is the Senior Advisor, Policy and Regulatory – Americas at the Global CCS Institute. She has over 15 years' experience working globally on various aspects of carbon capture and storage (CCS) technologies from building research, development, and demonstration collaborations to education and capacity building, regulatory frameworks, and policy and market development. She is Founder & Director of the Research Experience in Carbon Sequestration (RECS) program, the premier US CCS education and training experience and career network for young professionals; Advisory Board Member of the Southeast Carbon Sequestration Technology Training Program, and CCUS Research Coordination Network. Pamela has been active with the US regional carbon sequestration partnerships, and served as Director of Regulatory Compliance, Education and Outreach in the Big Sky region. She is also a member of the Carbon Sequestration Leadership Forum (CSLF) CCS Academic Task Force, an expert peer reviewer for the International Energy Agency (IEA) Greenhouse Gas Technologies Conference, and stakeholder to the IEA Clean Coal Centre. Pamela serves as a Senior Fellow at the Atlantic Council, a Washington, DC-based think tank, with a focus on clean energy technologies, including advanced fossil energy systems and CCS. She is an Adjunct Professor at Tuskegee University, and Advisor to the Inter-University Student Initiative in Carbon Sequestration.
  5. 5. Diana Poputoaia Diana Poputoaia has over 7 years of experience of providing legal advice on structuring, financing and permitting energy, PPP and infrastructure projects. Under the umbrella of Oxford University, Environmental Change Institute, Diana was the lead author of a report on tradable green certificates in the European Union and investment risks reduction. The report provided an understanding of renewable energy sources – electricity support schemes in the European Union. In the recent years, Diana has also started looking into carbon capture and storage regulations across the European Union. Diana collaborated with the Global Carbon and Capture Institute on revising the carbon capture and storage legislation in Romania, and on examining the lessons learned in the European Union following the transposition of the European Union Carbon Capture and Storage Directive. Diana graduated from the Law School in Iasi (Romania’s oldest university) and holds an MSc in Environmental Change and Management from the Environmental Change Institute, Oxford University, UK.
  6. 6. QUESTIONS  We will collect questions during the lecture.  Your tutors will pose these questions to the lecturer once the lecture has concluded.  Please submit your questions directly into the GoToWebinar control panel. The webinar will start shortly.
  7. 7. The EU CCS Directive – three different approaches: the UK, the Netherlands and Norway 24/03/2014
  8. 8. TOPICS 1. The EU CCS Directive 2. Transposition of the EU CCS Directive 3. Main barriers and proposed solutions 4. Conclusions
  9. 9. 1. The EU CCS Directive (I) • The common denominator for the CCS regulatory frameworks across the EU by setting: – Principles (e.g. no CO2 storage in the water columns, only storage sites with no significant risk of leakage, environmental or health impacts should be selected); and – Rules (e.g. the compulsory set up of a financial provision securing closure and post-closure obligations) that need to be complied with by all Member States • Simultaneously, a number of issues are left to the Member States to regulate in greater detail (e.g. the instruments for the financial contribution for the transfer of responsibility)
  10. 10. 1. The EU CCS Directive (II) • November 2013 – the European Commission: – Has requested Austria, Cyprus, Hungary, Ireland, Sweden and Slovenia to adopt the necessary measures to fully transpose the EU CCS Directive into their national law – Has closed infringement cases against Belgium, Bulgaria, the Czech Republic, Germany, Estonia, Greece, Finland, Luxembourg, Latvia and the United Kingdom • 2015 review of the CCS Directive
  11. 11. 2. Transposition of the CCS Directive (I) • The UK: – Integration of the CCS Directive into existing legislation – Leader in developing regulations and funding mechanisms for supporting the development of CCS projects (e.g. national competition for funding CCS projects, financial support for CCS projects through low carbon Contracts for Difference) – No CCS project operational yet – February 2014: the White Rose and Peterhead projects share £100m funding under UK CCS commercialization programme
  12. 12. 2. Transposition of the CCS Directive (II) • Norway: – The CCS Directive entered into force on 1 June 2013 – it had to be included first into the European Economic Area Agreement, as Norway is not part of the European Union – The first “full” CCS projects at Sleipner (1996) and Snøhvit (2008) are being operated under the Norwegian petroleum legislation, without any specific adaptions – A significant potential for trans-boundary CO2 storage
  13. 13. 2. Transposition of the CCS Directive (III) • The Netherlands: – Literal transposition of the CCS Directive – The ROAD project received the storage license in 2012 • Most controversial points: – financial security – transfer of responsibility – financial contribution under the financial mechanism
  14. 14. 3. Main barriers and proposed solutions (I) • Financial security – Article 19 of the CCS Directive – The main uncertainty relates to the price of EUAs in the long run – Potential solution to address the uncertainty over the EUAs price: Member States to agree on a “ceiling and floor” price per EUA – Such a shared liability scheme may be interpreted as a deviation from the “polluter pays principle” and may also require the EC’s approval as it may amount to state aid – Other issues include: calculation method, instruments, activities covered
  15. 15. 3. Main barriers and proposed solutions (II) Barrier Country specific considerations The UK The Netherlands Norway Financial security - Amount high enough to cover the operator’s obligations - In force before injection until transfer of liability - Adjustable by relevant authorities - No regulation of calculation method, terms & conditions, triggering procedure - No regulation of calculation method or activities covered - ROAD: cost of monitoring, contingency monitoring, abandonment, financial contribution & cost of EUAs in case of leakage - The uncertainty over the cost of EUAs in case of leakage remains - Amount and other terms and conditions established by the parties, on a case by case basis - Potential solution: amount depending on the cost for government to cover all duties and obligations in a worst case scenario - Parent guarantee
  16. 16. 3. Main barriers and proposed solutions (III) • Transfer of responsibility – Article 18 of the CCS Directive – Lack of clear criteria for determining whether the transfer of responsibility can operate or not – Competent authorities assess whether the transfer of liability can operate based on the documents produced by license holders – The 20 years rule which involves high costs for monitoring, insurance, etc.
  17. 17. 3. Main barriers and proposed solutions (IV) Barrier Country specific considerations The UK The Netherlands Norway Transfer of responsibility - Wider extent of the permitted transfer of responsibility, i.e. any leakage liabilities (e.g. personal injury, damage to property and economic loss) - March 2013 – lack of clear criteria for the transfer to operate - Lack of sufficient clarity on the conditions for the decrease in the 20 years rule to operate: Which evidence that the CO2 stored is completely and permanently contained? Will authorities be impartial in assessing this evidence? - Existing legislation does not address this concept - Conditions for the transfer of responsibility will have to be determined at the time of decommissioning
  18. 18. 3. Main barriers and proposed solutions (V) • Financial contribution under the financial mechanism – Article 20 of the CCS Directive – It should cover monitoring costs for 30 years and costs borne by the competent authority for ensuring that the CO2 is permanently contained – Challenge: determining the amount of the financial contribution for the transfer of liability to actually operate – ROAD project (the Netherlands): the financial contribution covers only the cost of monitoring – Norway: the financial contribution depends on the specific conditions for each storage facility, and how much CO2 is stored, thus enabling the calculation of the potential leakage and associated costs
  19. 19. 3. Main barriers and proposed solutions (VI) Barrier Country specific considerations The UK The Netherlands Norway Financial contribution under the financial mechanism - Coverage of post – transfer costs, i.e. the costs for which the authority will be liable as a result of the transfer of liabilities and obligations to the authority - What amount? Difficult to estimate the post-transfer costs to ensure that the CO2 is completely and permanently stored - ROAD – only monitoring costs - Existing legislation does not regulate this concept - Criteria & amount may be determined on a case by case basis - No financial contribution for Sleipner & Snohvit
  20. 20. 4. Conclusions • The role of public authorities can be extremely important: driver or barrier • No transposition method may be considered better than the other • Unclear time framework for regulations addressing the main barriers: before or after the 2015 review of the CCS Directive • The development of CCS regulatory frameworks in the EU is dependent upon practical experience • Despite all uncertainties and associated risks, some CCS demo projects across the EU make progress in their permitting
  21. 21. QUESTIONS / DISCUSSION Please submit your questions in English directly into the GoToWebinar control panel. The webinar will start shortly.
  22. 22. Tutorial Extranet Group: https://inside.cleanenergyconnect.com/groups/junior-professional-legal- and-regulatory-group-2014

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