Climate law Week 5A

What is the legal/technical definition of Carbon Capture and Storage (CCS) and what are the main methods of capture?

• Definition = CCS is the process of capturing carbon dioxide (CO2​) before it enters the atmosphere, transporting it, and storing it permanently

• Capture methods: Capture from industrial process streams, post-combustion technology, oxy-fuel combustion, pre-combustion capture, and chemical looping combustion

• The Energy Penalty: Capturing and compressing CO2​ requires significant energy, which reduces a power plant's efficiency and increases the fossil fuel needed for the same outpu

Does the CCS Directive apply to Enhanced Hydrocarbon Recovery (EHR)?

• Generally, the injection of CO2​ solely to recover hydrocarbons is not included in the Directive

• However, if EHR is combined with geological storage of CO2​, the Directive's provisions apply

What are the requirements for the composition of a CO2​ stream intended for storage?

Under Art 12(1), the stream must consist “overwhelmingly” of CO2​. Trace substances must stay below levels that would:

1. Adversely affect the integrity of transport or storage infrastructure.

2. Pose a significant risk (a combination of probability and magnitude of damage that cannot be disregarded) to the environment or human health.

3. Breach other EU legislation

What new obligations does the NZIA place on oil and gas producers regarding CCS?

• The NZIA identifies CCS as a strategic net-zero technology with a target of 50 Mt CO2​/year injection capacity in the EU by 2030.

• Obligation: Individual oil and gas producers must provide new injection/storage capacity at permitted sites by 2030, proportional to their share of production.

• Reporting: Producers must submit plans by June 2025 and annual progress reports from 2026.

What is the "legal gap" regarding the transport of CO2​ under the CCS Directive?

While transport is technically possible via pipeline, marine tanker, train, or truck, Art 3(22) of the Directive specifically defines transport as a "network of pipelines

How is access to CO2​ transport and storage infrastructure regulated for third parties?

• Member States have the discretion to choose between negotiated or regulated third-party access.

• Refusal of Access: Access can be refused for "technical incompatibility" that cannot be reasonably overcome, though "reasonable" is a vague term that grants states wide discretion.

• Factors: States must consider available capacity and their own emission reduction obligations when designing these regime

What are the two types of permits required for storage, and how are they awarded?

1. Exploration Permit: Necessary for drilling or testing a site.

2. Storage Permit: Necessary to actually operate a storage site.

• Exclusivity: Permits are exclusive; however, holders of exploration permits are given priority when applying for the subsequent storage permit

If CO2​ leaks from a storage complex, what three types of liability does the operator face?

1. Environmental Liability: For damage to protected species, water, land, or habitats.

2. Climate Liability: The operator is liable for leaked greenhouse gas emissions under the EU ETS Directive (must surrender allowances for leaks).

3. Civil Liability: For damage to individuals or property, usually regulated under national law

When and how is responsibility for a storage site transferred to the State?

Responsibility transfers to the competent authority after a site is closed, provided specific cumulative criteria are met.

    ◦ What transfers: Environmental and climate liabilities.

    ◦ What does NOT transfer: Civil liability remains with the operator.

    ◦ Financial requirement: The operator must provide a financial contribution to the authority before the transfer to cover post-transfer costs

What is the main international legal barrier to exporting CO2​ for sub-seabed storage?

• Article 6 of the London Protocol prohibits the export of waste (including CO2​) for disposal.

• The Workaround: A 2009 amendment allows export if the countries sign a formal agreement, but it lacked enough ratifications.

• The 2019 Resolution: Now allows countries to apply the 2009 amendment provisionally if they notify the IMO and conclude a bilateral agreement

How does the EU ETS incentivize CCS, and what is the current limitation?

• Under the EU ETS, every tonne of geologically stored CO2​ is treated as not emitted, meaning the operator does not need to buy or surrender emission allowances.

• The Problem: Currently, the price of an emission allowance is often lower than the total cost of capture, transport, and storage, meaning there is little financial incentive to invest in CCS without additional subsidies.