Regulations

Before large CCS plants can be built all necessary regulations must be in place. We need international agreements on how and where to store CO2, as well as regulations to ensure that new fossil fuel power plants are built with CCS. Many international regulations were changed in recent years to allow CCS, and many countries and regions have established new regulations facilitating CCS. But there is still a lot of work to be done on new regulations. The most interesting process will be the international climate negotiations in Copenhagen in December 2009. Ideally, these negotiations should result in a new agreement for reduction of global greenhouse gas emissions.

Lack of regulations for CCS have been a main bottleneck for further development of CCS for a long time, but that is about to change. A few years ago industry was reluctant to build large-scale CCS plants because there were no regulations allowing CO₂ storage. In fact, international agreements at that time did not permit the injection of CO₂ underground. In recent years has seen a positive trend in development of legislation on this issue. Politicians have risen to the challenge; existing regulations have been amended to allow CCS and new regulations facilitating CCS are being put into place.

Some hurdles remain and the Kyoto Protocol is the biggest one. The Kyoto Protocol was designed to reduce global greenhouse gas emissions, but when the protocol was agreed upon CCS was too unmature to be included as an emission reduction tool. In December 2009 negotiators will meet in Copenhagen to discuss - and hopefully agree upon - a new international agreement replacing the Kyoto Protocol from 2013. Already, discussions are taking place on the role of CCS in the new agreement. Ideally, CCS should be included as a tool in the protocol's emission reduction mechanisms, but the signals so far are not too promising. If CCS does not become part of the new agreement to be settled in Copenhagen, it could mean a serious delay in building the first large-scale CCS plants.

Many good regional initiatives have been taken in recent years. Australia was the first country to establish regulations for CCS in 2006, and in 2008 the EU adopted a new directive on CO₂ storage. The EU has even established funding mechanisms for building the first large-scale CCS demonstration plants.

California established regulations which strongly favour CCS by specifying emission performance standards that set a limit on CO₂ emissions from power plants. The emission performance standard bans traditional power plants. The only way to build new coal power plants in California is to include CCS in the power plant. Environmental groups are working hard to ensure that the Californian regulations are adapted in other regions.

This more or less summarizes the situation on regulations for CCS; some new regulations are already in place, but hard work remains to further improve these regulations.

The main international regulations with relevance for CCS are listed below:

• The London Convention: A global convention to protect the marine environment from human activities. It was amended in 2007 to allow CO₂ storage under the seabed.
• OSPAR: A mechanism by which fifteen Governments of Europe cooperate to protect the marine environment of the North East Atlantic. It was amended in 2007 to allow CO₂ storage under the seabed.

Some of the most interesting national or regional regulations for CCS are listed below:

• The Australian CCS legislation: As the first country in the world Australia endorsed guiding principles for CO₂ storage in 2005.
• The EU Directive for CO₂ Storage: The EU established a new directive with guidelines for CO₂ storage in 2008.
• The Californian Emission Performance Standard: The Californian power production regulation has an upper limit for how much CO₂ a power plant can emit. Coal power plants are incapable of operating under this limit without CCS.

The Australian CCS legislation and the EU Directive on CO2 Storage represent necessary regulations for CO₂ storage. Hopefully, these regulations can serve as a starting point for similar regulations in other regions of the world.

In addition, new regulations must be established to ensure that fossil fuel power plants and factories are built with CCS. Industry will not invest in large CCS plants without such regulations because of high CCS costs and large financial risks related to CCS. The Californian Emission Performance Standard is a very good example of how regulations should be designed.

Finally, the world needs a global agreement on how to combat global warming. The Kyoto Protocol was a start, but it has not resulted in any emission reduction. The new agreement to be negotiated in Copenhagen in December 2009 must have ambitious emission reduction targets that are legallt binding for all nations, and it must have well designed mechanisms for how to achieve the emission reductions. Ideally, CCS will be a part of these mechanisms.

The London Convention is short for "Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter 1972". The London Convention is one of the first global conventions to protect the marine environment from human activities and it has been in force since 1975. Its objective is to promote the effective control of all sources of marine pollution and to take all practicable steps to prevent pollution of the sea by dumping of wastes and other matter. Eighty-five States have signed the Convention.

Originally, the London Convention did not allow CO₂ storage under the seabed, but in 2007 the convention was amended to permit CO₂ storage. However, some minor issues related to cross border transportation of CCS still need to be addressed.
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The OSPAR Convention is the current legal instrument guiding international cooperation on the protection of the marine environment of the North East Atlantic. The work is managed by the OSPAR Commission, made up of representatives of the Governments of 15 nations and the European Commission.

The objective is to conserve marine ecosystems and safeguard human health in the North East Atlantic by preventing and eliminating pollution; by protecting the marine environment from the adverse effects of human activities; and by contributing to sustainable use of the seas.

The name OSPAR comes from the first letters of Oslo and Paris. OSPAR is the merging of the Oslo Convention against dumping and the Paris convention covering waste from land-based sources and the offshore industry.

Initially, OSPAR did not allow CO₂ storage, but these regulations were amended in 2007 to permit CO₂ storage under the seabed.
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Australian is one of the countries that has taken the lead in developing CCS technologies, and they have launched many interesting research and pilot projects. In 2009 Australia will also establish an international CCS institute that will facilitate building CCS demonstration projects worldwide.

At an early stage Australia realized that there was a need for a nationally consistent framework for CCS activities. In 2005, as the first country in the world, the government endorsed new regulatory guidelines for CO₂ capture and storage.

The Australian regulatory framework focuses on six main areas:

• Approval processes
• Access and property rights
• Transportation issues
• Monitoring and verification of storage sites
• Liability and post-closure responsibilities
• Financial issues

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Today there are no full-scale coal or gas power plants with CCS. All existing power plants emit all their CO₂ directly into the atmosphere. The reason that there are no power plants with CCS is simple: CCS is expensive, and in most places in the world there are no regulations that ban power plants with large CO₂ emissions.

There are a few exceptions however. In the EU the emissions trading scheme (EU ETS) puts a price on CO₂ emissions, but at the moment the price of buying an emission allowance is cheaper than the cost of building a coal or gas power plant with CCS. The EU will reduce the number of emission allowances gradually in the years to come, and that will increase the price of emission allowances. Eventually, the cost of emitting CO₂ will be higher than the cost of CCS, and when that happens, industry will start to build CCS projects.

An emission trading system may not be sufficient to accelerate the development of CCS technology. Additional regulations might be required. When the EU endorsed the energy package in 2008, the possibility of including an Emission Performance Standard (EPS) that sets a ceiling on CO₂ emissions from power production was discussed. A suggestion was made to include an EPS of 350 grams CO₂ per kWh, which would have banned coal power plants without CCS. However, the sugggestion to include EPS in the EU energy package failed.

When it comes to regulations and incentives for CCS one should look to California. In 2007 California endorsed a regulation for base load power production that includes an Emission Performance Standard (EPS) of 500 grams CO₂ per kWh. This prohibits construction of traditional coal power plants without CCS because they would emit more than the EPS limit.

Read more about the Californian EPS

The European Parliament endorsed a new Directive for CO₂ Storage in December 2008. The new directive contains a set of guidelines ranging from exploration and storage permits to liabilities and closure procedures for CO₂ storage sites.

The CO₂ storage directive was part of an energy package that also includes a new directive and a revision of the European emission trading scheme (EU ETS).

One of the most interesting aspects of this energy package when it comes to regulations for CCS is that the revision of the emission trading scheme, the EU ETS, provides for financing of CCS. A total of 300 million emission allowances are set aside to co-finance up to 12 selected CO₂ capture and storage projects. This will equal about € 6-9 billion.
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The most important event in 2009 when it comes to climate change will be the international climate negotions taking place in Copenhagen in December. The aim of the negotiations is to agree to a new protocol for reducing global CO₂ emissions. The new protocol will replace the Kyoto Protocol from 2013.

The Kyoto Protocol is the first international agreement on the reduction of greenhouse gas emissions. However, the protocol is not a success since several nations have not signed it. Another proof that the Kyoto Protocol is not working is that global greenhouse gas emissions have been constantly increasing since the Kyoto Protocol was agreed upon. At beste, the Kyoto Protocol might have limited the growth in greenhouse gas emissions, but the agreement is too weak to produce a reduction in global emissions.

A successful process in Copenhagen means creating a new protocol with the following three key elements:

• an ambitious emission reduction target
• good emission reduction mechanisms
• the signature of all nations

The UN International Panel on Climate Change, the IPCC, has said that global greenhouse gas emissions should be reduced by 50 to 85 percent by 2050. This recommendation must be reflected in a new deal which all nations should agree upon in Copenhagen.

Reducing global greenhouse gas emissions by as much as 50 to 85 percent by 2050 is a very ambitious goal. This target can only be achived if all nations agree to the new protocol and commit to national emission reduction targets.

The Kyoto Protocol has two important mechanisms for emission reduction: the Clean Development Mechanism (CDM) and Joint Implementation (JI). CDM and JI are based on the principle that emission reduction strategies are implemented where they are most cost effective. In practice this means that developed countries pay for emission reduction projects in developing countries because this is the cheapest way to obtain emission reductions.

The negotiations in Copenhagen in 2009 are very important with regard to CCS regulations. CCS was a very unmature technology when the Kyoto Protocol was negotiated, and as a result CCS was not included in the CDM and JI mechanisms. Therefore, the Kyoto Protocal gives no incentives for promoting CCS.

Whether or not to include CCS in the emission reduction mechanisms is already a topic of discussion. At the moment it is very unclear what the outcome of the Copenhagen negotiations will be.

The argument for including CCS in mechanisms like CDM is that CCS has a large potential for CO₂ emission reductions, and that it is not possible to cut global CO₂ emissions sufficiently without CCS. But some negotiators question the safety of CO₂ storage.

Read more about the Copenhagen 2009 Climate Conference

• EU Energy package

• London Convention
• OSPAR
• Australian CCS regulations
• Californian EPS
• Copenhagen 2009 Climate Conference
• Overview of regulatory framework in the US - Report by P. M. Marston & P. A. More