Mihai Tomescu

1
Proposed EU Directive on the geological storage
of carbon dioxide
UCL London Special Seminar Current European
Issues in Carbon Capture and Storage
Regulation 16 June 2008

• Mihai Tomescu
• Energy and Environment
• DG Environment
• European Commission

2
EU climate objectivestabilisation of GHG at 450
ppmv

• IPCC 4 Assessment Report
• Globally, emissions will need to peak within the
  next 10-15 years, followed by substantial
  reductions of 50-85 by 2050 to ensure that
  global average temperature increases do not
  exceed pre-industrial levels by more than 2.4C

3
EU-Objectives for 2020

• 20 GHG reduction compared to 1990
• Independent commitment
• 30 GHG reduction compared to 1990
• In the context of international agreement
• 20 Renewables
• 10 Biofuels
• 20 Energy Efficiency

4
What is in the package?

• Revision of EU Emissions Trading System (the ETS)
• Effort sharing in non ETS sectors
• Directive on promotion of renewable energy,
  report on renewable energy support schemes
• Directive on carbon capture and storage, and
  Communication on demonstration plants
• Revised environmental state aid guidelines

5
Background

• CCS contribution in 2030, based on Impact
  Assessment
• 160 Mt captured if CCS included under the EU ETS
• Cutting GHG by some 30 would be 60bn (40) more
  expensive without CCS
• Carbon price would be 46 higher w/o CCS than
  would otherwise be the case
• Sufficient storage capacity in Europe to store
  emissions
• Planning for infrastructure

6
Purpose, Focus, Scope

• Purpose
• ? Legal framework to manage environmental risks
• Removal of legal barriers in existing
  legislation
• Focus on geological storage
• Capture regulated and permitted under IPPC
  (Art. 30)
• Transport regulated at MS level and through
  EIA- Directive (Art.29(1)(a))
• Scope
• Territory of MSs, exclusive economic zones and
  continental shelves
• Doesnt apply to research projects (lt 100kt CO2)
• Storage in water column prohibited

7
Risk management framework main provisions

• Storage - Site selection (Art.4) specific
  criteria conditions (Annex I)
• Exploration and Storage Permits, applications,
  conditions and content (Art.5 to 9)
• Commission review of draft storage permits
  (Art.10)
• Monitoring, Reporting and Inspections (Art.13
  to15)
• Corrective measures (Art.16), Liability and
  Financial Security (Art.19)
• Closure and Post-closure obligations (Art. 17)
• Transfer of responsibility (Art. 18)
• Third-party access (Art. 20-21)
• Removal of barriers for CCS in existing
  legislation
• Recognition of safely stored CO2 under EU-ETS

8
Site selection, Exploration

• Site selection
• essential for integrity and safety of storage
• potential sites assessed based on criteria listed
  in Annex I
• selection only if assessment shows that under the
  proposed conditions of use, there is no
  significant risk of leakage or impacts on human
  health or the environment (Art. 4.2)
• MSs have sole right to decide which areas in
  their territory to make available (Art. 4.1)
• storage site subject to EIA (Art. 29)
• Exploration permit (Art.5)
• where exploration is necessary, an exploration
  permit shall be issued to protect the holder
  against conflicting uses
• where exploration allowed, standard
  non-discrimination provisions apply

9
Storage permits

• Storage permits
• No storage without a storage permit (Art. 6)
• Proposal contains detailed requirements on
  application, conditions and contents of the
  storage permit (Art. 7, 8 and 9)
• Commission review (Art. 10)
• Draft storage permits have to me submitted to the
  Commission, which may issue an opinion within six
  months
• MS may deviate from opinion, but have to provide
  justification
• Purpose harmonization of implementation, public
  confidence, learning
• Permit regularly updated every 5 years or earlier
  if needed, and reviewed or withdrawn as necessary
  (Art. 11)

10
CO2 Acceptance Criteria, Monitoring and Reporting

• CO2 acceptance criteria
• CO2 stream shall consist overwhelmingly of carbon
  dioxide
• no wastes or other matter added for the purpose
  of disposal
• concentration of incidental associated substances
  shall be below levels that would adversely affect
  the security of the storage or transport
  infrastructure, or that would pose a significant
  risk to the environment
• operator to show fulfillment of criteria before
  injection
• Monitoring, Reporting
• operator to carry out monitoring regularly, and
  to report at least once a year to the competent
  authority (Art.13 and 14)
• monitoring plan elaborated based on criteria
  listed in Annex II, and approved by the competent
  authority (Art.13)
• inspection at least once a year, by competent
  authority (Art.15)

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Leakages

• Corrective measures (Art.16)
• operator to notify immediately the competent
  authority and to take the necessary corrective
  measures
• should operator fail to take measures, the
  competent authority shall take the measures
  itself and recover the costs from the operator
• in addition
• Environmental Liability Directive applies for any
  local damage (Art.33)
• Emissions Trading System Directive applies for
  any global impacts to climate
• safely stored emissions regarded as not emitted
  under ETS, but
• ETS allowances must be surrendered for any
  leakages
• financial security for future liabilities (Art.
  19)

12
Closure, Post-closure, Transfer of responsibility

• Closure ( cessation of injection) (Art.17)
• if the relevant conditions in the storage permit
  have been met, or following the decision of the
  competent authority
• Provisions for the post-closure phase
• operator remains responsible for the storage site
  (maintenance, monitoring, control, reporting,
  corrective measures all ensuing legal
  obligations) as long as the site represents a
  significant risk
• post-closure plan (Annex II)
• Transfer of responsibility (Art.18)
• to competent authority, when all available
  evidence indicates complete containment of CO2
  for the indefinite future
• Commission has the right to review and to give
  opinion

13
Financial security Third party access

• Financial security (Art.19)
• to be made available prior to submission of
  application for storage permit
• to ensure that all obligations under the CCS-D
  ETS-D can be met
• shall be kept until transfer or responsibility to
  competent authority
• Third party access (Art.20 and 21)
• principle is fair and open access to transport
  and storage
• MSs to determine modalities, and can limit access
  in certain cases (e.g. available storage
  capacity, national climate policy, etc.)
• dispute settlement arrangements also for
  cross-border

14
Removal of legal barriers

• EU law
• Water Framework Directive amended to allow CO2
  storage in saline aquifers (Art. 31) (same
  env. conditions as for natural gas)
• Waste legislation adapted to remove from scope
  CO2 transported and stored in accordance with
  this framework (Articles 34 and 35)
• International context
• 2006 amendment of the London Protocol (1996) to
  the London Convention (1972) on the Prevention of
  Marine Pollution by Dumping of Waste and Other
  Matter
• 2007 amendment of the Ospar Convention (1992) for
  the Protection of the Marine Environment of the
  North-East Atlantic

15
Enabling versus mandating CCS

• Enabling
• Member States determine whether and where CCS
  will happen
• Companies decide whether to use CCS on the basis
  of conditions in the carbon market
• Capture-ready assessment required to avoid
  lock-in of high-emissions technology (Article 32)
• By amendment of the Large Combustion Plants
  Directive
• No mandatory CCS at this stage
• Let the market work The revised ETS will ensure
  a robust carbon price and action on
  demonstration will bring CCS costs down

16
Progress in Council

• Co-decision procedure Art.251 EC
• discussion in env working group under SL
  Presidency
• majority of MSs positive
• many technical questions/details on the file
• open issues
• COM revision of draft storage permits (Art.10)
• CO2 purity criteria (Art.12)
• Transfer of responsibility to MS (Art.18)
• Financial security (Art.19)

17
Progress in the European Parliament

• Rapporteur Chris Davies (ALDE, UK)
• Report (beginning of June) proposes
• Shorten duration of COM review procedure
  introduce early information procedure (Art.10)
  at the same time strengthened
• Min. 90 purity of the CO2 stream
• New provisions for CO2 export to third countries
  (Art. 11a)
• CCS provisions for power plants with a rated
  output capacity gt 300 MW and emitting over 350g
  CO2/kWh
• Plants licensed after entry into force of CCS-D
  planning for CCS
• Plants licensed from 2015 onwards 90 CO2
  captured
• Plants referred in point 1, from 2025 onwards
  90 CO2 capture
• 2015 revision of possibility to extend Art.32 to
  installations other than power plants

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Outlook

• Upcoming FR Presidency July 2008
• Objective Adoption of CCS-D before end 2008
• to ensure safety and security of CO2 storage
• to provide legal certainty to operators
• to stimulate international regimes accepting CCS
• Focus on supporting early demonstration and on
  finding new funding opportunities for early
  projects
• Substantial finance available from ETS
  auctioning revenues

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(No Transcript)
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Communication on Early Demonstration of CCS

• Demonstration in power generation as next
  milestone
• Outlines initiatives to stimulate early
  large-scale CCS demonstration projects
• an EU structure to support CCS demonstration
  projects
• catalyzing the finance for CCS
• industry commitment
• Member States involvement
• EU-level financing
• preparing infrastructure needed for wide-scale
  deployment

21
EU structure to stimulate early demonstration of
CCS

• SET-Plan proposes EU Industry Initiatives (EII)
  in technologies needed for a decarbonized
  baseload
• Commission action
• proposes launching EII on CCS
• will launch a support action under FP7 to
  establish project network (operational on 1
  January 2009)
• Added value to first movers
• Coordination of demonstration projects
• Knowledge experience exchange, identification
  of best practises
• Common European identity
• Consulting services
• Taking care of public acceptance, international
  cooperation