al, Regulatory and Permitting issue
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al, Regulatory and Permitting issue

Ministry of Industry and TradeSocialist Republic of Viet NamEvaluating regulatory challenges forcarbon capture and storageJustine GarrettInternational Energy AgencyAPEC/ADB Joint WorkshopCarbon Capture and Storage in Viet Nam13-14 December 2011Ha Noi© OECD/IEA 2010

CCS Roadmap: an ambitious growth path for CCS© OECD/IEA 2010

CCS Roadmap regulatory actions and milestones• 2009 IEA CCS Roadmap recommends• Existing legal and regulatory frameworks should be reviewedand adapted for CCS demonstration by 2011 in OECD countriesand by 2015 in all non-OECD countries with CCS potential• All countries should have a legal and regulatory frameworksuitable for large-scale CCS deployment by 2020• International legal issues need to be resolved by 2012• Majority of countries still lack CCS regulatory frameworks© OECD/IEA 2010

IEA CCS Model RegulatoryFramework• Released4 November 2010• With supportfrom:© OECD/IEA 2010

IEA CCS Model Regulatory Framework• Tool to assist governments in the development ofnational legal and regulatory frameworks• Draws on current CCS legal and regulatory developmentsin Europe, Australia, the United States, and elsewhere• Proposes key principles for handling regulatory issuesassociated with CCS• Non-prescriptive© OECD/IEA 2010

Where does the Model Framework fit in?• CCS framework development• Identify purpose for CCS framework: demonstration v. deployment• Context: understanding existing legal landscape• “Gap and barrier” analysis: how do existing frameworks match up with whatfuture CCS legislation would aim to achieve?• Amend existing regulation or develop dedicated regulation• Review regulation to ensure fit for purpose• Model Framework synthesises international approach toCCS regulation• Inform governments on current regulatory approaches• Reference point for “gap and barrier” analysis© OECD/IEA 2010

Advisory CommitteeIEA Greenhouse Gas R&DProgrammeInterstate Oil & Gas Compact Commission,USNatural Resources, CanadaGlobal CCS Institute Illinois State Geological Survey, US Department of Energy, Alberta, CanadaThe Bellona Foundation, Norway Marston Law, US Ministry of Environment, GermanyWorld Resources Institute, US Environmental Defence, US Ministry of Economic Affairs, NetherlandsThe Carbon Capture and StorageAssociation, UKNatural Resources Defence Council, USShellDepartment of Energy and Climate Department of Resources, Energy andChange, UKTourism, AustraliaBPHealth and Safety Executive, UKBrazilian Carbon Storage Research Center,BrazilChevronEuropean CommissionVictorian Government Department ofPrimary Industries, AustraliaVattenfallEdison Electric Institute, US StraCO2 ExxonMobilCarbon Sequestration Council, USIMBEWU Sustainability Legal Specialists,South AfricaCO2DeepStore LimitedSchlumbergerEuropean Technology Platform for ZeroEmission Fossil Fuel Power PlantsBRGM© OECD/IEA 2010

Model Framework Development Process• Identification of key issues by Advisory Committee• Identification of documents to feed into ModelFramework by Advisory Committee• Legal instruments• Local• National• International• Guidance documents• Regulatory framework input documents• WRI, IOGCC, CCSA, ZEP© OECD/IEA 2010

Model Framework Development Process cont.• Review of documents by drafting teamDocumentsReviewedKeyIssues• Review of two Model Framework drafts by AdvisoryCommittee, with comments feeding back intosubsequent drafts© OECD/IEA 2010

Scope and structureClassification of CO₂Engaging the public in decision-makingCorrective measures and remediationmeasuresProperty rights CO₂ capture Liability during the project periodCompetition with other users andpreferential rights issueCO₂ transportationAuthorisation for storage site closureTransboundary movement of CO₂ Scope of framework and prohibitions Liability during the post-closure periodInternational laws on protection ofthe marine environmentIncentivising CCS as part of climatechange mitigation strategiesDefinitions and terminology applicable toregulating CO₂ storageAuthorisation of storage site explorationactivitiesFinancial contributions to post-closurestewardshipSharing knowledge and experience throughthe demonstration phaseProtecting human healthRegulating site selection and characterisationactivitiesCCS ReadyComposition of the CO₂ stream Authorisation of storage activities Using CCS for biomass-based sourcesThe role of environmental impactassessmentThird-party accessProject inspectionsMonitoring, reporting and verificationrequirementsUnderstanding enhanced hydrocarbonrecovery with CCS© OECD/IEA 2010

Discussion of key issues• Description (1-2 Paragraphs)• General description introducing the key issue• Explanation (1-5 pages)• Sets out considerations relevant to regulating the key issue• Examples (Varied)• Illustrate how the key issue is addressed in existing CCSframeworks• Model text (Varied)• CCS-specific regulatory issues (storage) only• ‘Starting point’ regulatory framework for consideration byjurisdictions© OECD/IEA 2010

Model text examples© OECD/IEA 2010

CCS Legal and RegulatoryReview• Analyses global CCS regulatoryprogress to support regulatorydevelopment• Released every 6 months• Contributions by governments andinternational organisations• Overview of recent and expecteddevelopments• Discussion of key CCS regulatory theme• IEA analysis of key advances andtrends© OECD/IEA 2010

Edition 2, May 2011• Released 27 May 2011• Progress report from around 30 jurisdictions and 8international CCS organisations• Key theme: long-term liability© OECD/IEA 2010

What do we mean by long-term liability?• “Liability” generic term for• General law liabilities (e.g. under civil law, for damage tothe environment, human health or third party property)• Corrective or remediation measures• “Global” (climate) liability• “Long-term liability”: liabilities arising after• Permanent cessation of injection• Active monitoring• CCS aims to be permanent: implications for liabilitiesassociated with a storage site© OECD/IEA 2010

Traditional focus on question of transfer• Liability transfer or indefinite operator responsibility?• Trend towards liability transfer• Australia, European Union, some Australian, Canadian and USstates and provinces• No outright consensus in existing CCS frameworks© OECD/IEA 2010

Beyond transfer• Much to consider beyond preliminary question oftransfer• Generally three requirements imposed• No significant risk of physical leakage or seepage of stored CO2• Minimum time period elapsed• Financial contribution to long-term stewardship• Marked differences in approach between jurisdictions© OECD/IEA 2010

Measuring stability• Long-term security of storage sites critical• Monitoring and verification to continue post cessation ofinjection• Government must be confident site behaviour isacceptable• Operator to demonstrate:• Stored CO2 behaving in predicable manner• No significant risk to human health or the environment• Further quantitative details site-specific© OECD/IEA 2010

Time to hand over• Minimum period must elapse after cessation of injection• 20-50 year periods, but can be modified at authority’sdiscretion• Is minimum period arbitrary given lack of experience withclosed storage sites?• Behaviour of storage site arguably more importantcriterion© OECD/IEA 2010

Covering costs• Financial contribution to limit government’s financialexposure• Way contribution collected and managed differs• Royalties, fees, trust funds etc• How to calculate financial security amount unclear• Area of ongoing research and discussion• Factors vary between projects• Germany – 3% of avoided emissions trading allowances/year• Further work needed on economic aspects of CCS liability© OECD/IEA 2010

For discussion…• Does financial assurance for long-term stewardship maketransfer of long-term liability non-controversial?• What happens if long-term liability is not managed by aCCS regulatory framework?• Can appropriate mechanisms for long-term liability bedeveloped while there is significant uncertainty overrelevant risk?© OECD/IEA 2010© OECD/IEA 2010

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