CCS: Potential, Challenges and Regulatory Issues IEA – FTS of Russia Workshop Paris, 27 May 2010 Juho Lipponen Head of Unit CCS Technology

Carbon Capture and Storage CCS is a family of technologies that enable the capture of CO2 from large point sources, its transport, and its long-term storage in geological formations. CO2 source (eg. power plant) CO2 transport CO2 injection CO2 storage

Messages from IEA CCS Roadmap* Without new policies, global emissions increase by 130% by 2050, leading to a 4-7 o C temperature rise CCS provides one-fifth of the needed CO 2 reductions in 2050 Without CCS, cost of reaching needed CO2 cuts rises by up to 70% CCS is the only low-carbon solution for gas/coal, cement, and iron & steel sectors CCS has potential for carbon-negative solutions * IEA CCS Roadmap, October 2009, analysis based on ETP 2008 BLUE Map scenario

The ETP BLUE Map Scenario

CCS deployment in the BLUE Map Scenario Number of Projects MtCO2/year Captured Ambitious growth path : projects -145 Gt stored Ambitious growth path : projects -145 Gt stored

CCS is not just a “clean coal” Coal power only makes up around 40% of stored emissions in 2050

CCS is operational today… SleipnerSnohvit Weyburn In Salah Rangely Five large-scale projects are successfully storing CO 2

… and more is planned… Source: GCCSI 80 integrated large- scale projects in various stages of development © OECD/IEA 2009

…but it faces challenges Accelerating R&D for capture technologies Exploring and documenting suitable CO 2 storage sites Developing appropriate legal & regulatory frameworks Ensuring financing and risk-sharing for demonstration Ensuring public engagement Expanding international collaboration © OECD/IEA 2009

Why discuss legal and regulatory issues for CCS? 1.“Making CO2 capture, transport and storage possible” (  a legal activity) 2.“Ensuring transport and storage are effective and safe” (  risk mitigation  public acceptance) 3.“Make it possible for financiers” (  no money if the activity is not legal or too risky)

Legal and regulatory issues: questions? Is CO 2 storage permitted under international law? Do national laws on CO 2 storage exist? Is capture regulated? What about transport? Can CCS be used as a flexible mechanism to import/export carbon credits?

Legal and Regulatory Actions and Milestones The roadmap recommends – Existing legal and regulatory frameworks should be reviewed and adapted for CCS demonstration by 2011 in OECD countries and by 2015 in all countries – All countries should have a legal and regulatory framework suitable for large-scale CCS deployment by 2020 – International legal issues need to be resolved by 2012

Legal and Regulatory Milestones

CAPTURE Incentive: compulsory or not? Safety (?) Environmental issues (?) Legal and regulatory issues for CCS TRANSPORT EHS Purity of CO2 Permitting Access to grid Cross-border tr. STORAGE EHS Exploration Selection & perm. MMV Site closure Cross-border tr LT liability etc. etc.

Legal & regulatory progress to date IPCC 2006 Inventory Guidelines UNFCCC London Protocol OSPAR Treaty EU Directives on CCS and ETS Other Legal & Regulatory Developments IEA CCS Activity

IPCC Guidelines for GHG Inventories Establishes accounting guidelines for CCS Provides a methodology for project development and operation Provides framework for a monitoring plan Based on site specific requirements Annex 1 – Description of monitoring technologies “For appropriately selected and managed sites, supports an assumption of zero leakage unless monitoring indicates otherwise”

UNFCCC – Kyoto Protocol Kyoto Protocol; – Article 2.1 (a)(iv): Recognises “Carbon dioxide sequestration technologies” as a mitigation technology that promotes sustainable development Clean Development Mechanisms (CDM): Marrakech Accords (The CDM rule book) (17/CP.7); – Limits CDM project activities Developed countries “refrain” from using credits from nuclear facilities Land use and forestry projects (LULUCF) limited to afforestation and reforestation CCS is not included in CDM, but not explicitly excluded either!

UNFCCC – Clean Development Mechanism Considering CCS since COP/MOP I Montreal 2005 following submission of 2 methodologies Discussion continued …2006…2007…2008… Decision was expected at Copenhagen 2009 but not achieved Technical advisors (SBSTA) to continue discussion on CCS in Bonn May-June 2010 Decision December 2010?

London Convention and Protocol Global agreement regulating disposal of wastes and other matter at sea Convention 1972 (86 countries) Protocol 1996 – ratified March 2006 (37 countries) CCS – Prohibited some configurations of CO 2 storage below the subsurface – Prohibits the trans-boundary transfer of CO 2

London Protocol Amendment Assessed by LC Scientific Group Risk Assessment Framework for CO 2 – 2006 Amended to allow all configurations of CCS – Passed in 2006 – Now allows disposal of CO2 in geological formations – Entered into force in 2007

London Protocol Amendment CO 2 specific guidance – “CO 2 streams may only be considered for dumping, if: 1.Disposal is into the sub-seabed geological formations, and 2.They consist overwhelmingly of CO 2. They may contain incidental associated substances derived from the source material and the capture and sequestration processes used, and 3.No wastes or other matter are added for the purpose of disposing of those wastes or other matter.” – Acceptability of incidental associated substances depends on their potential impacts on: integrity of the storage sites and relevant transport infrastructure the risk they may pose to human health and the marine environment

London Protocol Amendment 2 Article 6 prohibits export of waste, including CO 2 – Transport or migration Working Group 2008 agreed that amendment to Article 6 is necessary – Also decided that transboundary migration is not export Amendment proposed and passed by vote 10/2009 – “Export of CO2 for disposal in accordance with Annex 1 may occur, provided an agreement or arrangement has been entered into by countries involved.” Adoption needs two thirds of all Parties ratifying

OSPAR Marine Treaty for NE Atlantic 15 nations and EC Prohibited some CCS configurations Considered CCS and CO 2 impacts on seas Amendments to allow prohibited CCS configurations (June 2007) – Requirement to use guidelines (‘FRAM’) when permitting Ratification by 7 parties needed – One completed, EC pending, EU Member States 9/2010?

EU Developments Action Plan for Energy Policy for Europe – Stimulate up to 12 CCS demonstrations by 2015 – Strengthen R&D and develop technical, economic and regulatory framework to bring environmentally-safe CCS to development by 2020 EU CCS Directive – 2009 – Transposition into national laws by 2011 CCS inclusion in EU ETS Directive – 2009

EU CCS Directive (1) Directive 2009/31/EC Establishes a legal framework for the environmentally safe storage of carbon dioxide to contribute to the fight against climate change Site selection Exploration and storage permitting CO2 stream Monitoring & reporting

EU CCS Directive (2) Measures in cases of leakages Post-closure obligations Transfer of responsibility Financial security and mechanism Third-Party Access

EU CCS Directive – Capture Ready Capture-ready for plants >300MW, from date of CCS Directive 1.Assess availability of suitable storage sites 2.Assess transport is technically and economically feasible 3.Assess technical feasibility of retrofitting capture equipment – Based on 1-2-3, leave space for capture equipment on plant site

Regulatory developments in other regions Australia – Offshore Petroleum and GHG Storage Act 2008 – Victoria and Queensland GHG Storage 2008/9 USA – US EPA has developed Federal level regulations “Draft Rule” for CO 2 storage (Jul 08) – Many states implementing regulation

Regulatory developments in other regions Canada – Canada – acid gas injection and CO2-EOR already permitted in states like Alberta – Federal/Alberta Task Force recommendations for CCS regulations (Apr08) Japan – Adapted marine laws UK – Mandatory CCS demonstration on 300MW of all new coal plant

Legal and regulatory issues: questions Is CO2 storage permitted under international law? – Many hurdles have been cleared; awaiting ratification Do national laws on CO2 storage exist? – Yes, but process must be speeded up Is capture regulated? – Varying emphasis; capture-ready plant in EU framework; UK retrofit 2025-; US discussion What about transport? – Some regulation exists (EU Directive), but not emphasis Can CCS be used as a flexible mechanism to import/export carbon credits? – No it cannot. Change in ?

The IEA CCS Regulators’ Network Launched May 2008 in Paris Aim is to create a forum for the sharing of experiences, harmonization of efforts Host web events – Long-term liability (January 2009) – Financing/Integration with ETS (March 2009) – Public consultation (July 2009) – Site handover (September 2009) – CCS developments from Copenhagen (January 2010) Network of over 750 contacts Contact us to share your thoughts and ideas

Thank you!