Regulations for CCS

The EU endorsed a new directive for CO2 storage in December 2008. The challenge in 2009 will be to implement the new directive in laws and regulations in the membar states. Bellona has carried out a study on how the new directive should be implemented in Norway.

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The paper from the study was published 31 January 2009. The paper can be downloaded as PDF, and the summary of the paper is given below.

Summary

The Directive does not make CCS mandatory but enables it by providing a legal framework to manage environmental risks and remove barriers in existing legislation. Whether CCS is taken into practice will be determined by the carbon price and the cost of the technology. To achieve commercialisation by 2020 and demystify CCS for all players, the ZEP concluded that a total of 10-12 demonstration projects were required.

In this report we have given a picture of the new EU legal framework on the geological storage of CO₂, in order to anticipate some of the legal issues and challenges that Norway might meet when implementing the Directive in its national legislation.

Implementation in Norway will first happen if and when the Directive is integrated into EEA, as Norway is not part of the EU but is part of the EEA. The attributions given to the Commission by the Directive will then probably belong to ESA with the challenge that ESA might not have the same competence as the Commission.

In Europe Norway is one of the countries with best experience in the field of CCS. It is therefore important that Norway is given the possibility to actively participate in the system of ”information exchange” between competent authorities from Member States. Similarly, it is important that Norway and other EFTA countries receive from ESA the same level of competence/assistance as the one that the Scientific Panel will provide to the Commission. A solution could be to provide that the Scientific Panel also reviews permit of EFTA countries. Experts from Norway should also be given the possibility to participate in the Scientific Panel.

Although Norway has more than 10 years experience with CCS, no specific rules exist in Norway to regulate the activity. The implementation of the Directive on geological storage will give Norway an opportunity to build a solid and well considered legislation. CO₂ storage activities (Sleipner and Snøhvit) have so far been addressed on a case by case basis with support from existing legislation, particularly the Petroleum Act and the Pollution Control Act. However because they do have not have CCS in mind, this results in a complex and confusing regime.

In this report we have made several recommendations on how Norway could regulate CO₂ storage following the adoption of the Directive and which considerations should be taken into account. Our main recommendations are the following:

• Norway should implement the Directive by way of a free standing legislation and not through amendments to existing legislation. The free standing legislation should cover all aspects of the CCS chain, and not only geological storage, and clearly identify rights and duties of all actors involved.
  
• The distinction between activities connected to petroleum activities and activities not connected to petroleum activities should be removed. The source of the CO₂ (regardless of whether is a waste from petroleum activities) should not have any incidence on the applicable regime.
  
• The appointment or establishment of the ”competent authority” should be primarily motivated by environmental considerations and to a less extent by petroleum considerations. Most of the obligations stipulated by the Directive should be delegated to the Ministry of Environment (through the Pollution Control Authority - SFT) and only to a lesser extent to the Ministry of Oil and Energy. We foresee
  
• Creation of a new Ad Hoc Authority, gathering representatives from SFT and OED, for site selection and issuance of permits (exploration and storage)
  
• Designation of SFT as the competent authority during the operational phase of the site (from injection to transfer of responsibility)
  
• Designation of the Ministry of Environment or Ministry of Commerce and Industry as the entity taking over the storage site after transfer of responsibility.
  
• Norway should involve an accredited independent entity at all stages of the storage projects, not only to secure sufficient environmental integrity (monitoring) but also to allow and promote equal and fair treatment of storage.
  
• A governmental body should establish official standards for site characterisation and selection.
  
• Norway should provide guidelines for remediation actions to stop leakages as soon as possible.
  
• Norway should provide a robust system of penalties in case of leakage.
  
• Norway should create incentives to encourage States’ involvement in transboundary CO₂ storage.