Thought Leadership – CCS Policy, Legal and Regulatory Review

CCS Policy, Legal and Regulatory Review

Purpose and Focus of the Report

This report provides an overview of global carbon capture and storage (CCS) policy, legal, and regulatory developments over the past two decades, focusing on the Americas, Europe, Asia Pacific (APAC), and the Middle East and Africa. It highlights key trends and challenges in the deployment of CCS technologies.

Key Takeaways and Observations

Regional Highlights and Messaging

The Americas

• North America: One of the most mature policy and regulatory environments for CCS, with ongoing improvements and adjustments. The U.S. and Canada are seeing enhanced fiscal incentives and direct financial support for large-scale CCS deployment. The U.S. federal government is reviewing and finalizing regulatory programs for offshore storage and CO2 pipeline transportation. Specific initiatives like the Joint Policy Statement and principles for responsible participation in voluntary carbon markets and the Voluntary Carbon Dioxide Removal (CDR) Purchasing Challenge reflect a commitment to decarbonization.
• Brazil: Emerging as a leader in CCS with supportive legislation, including the Fuels of the Future Bill 528/2020, which establishes obligations for operators of geologic storage sites. This could drive further CCS developments in South America.
• Trinidad and Tobago: Received the first-ever funding for CCS from the Green Climate Fund (GCF).

Asia Pacific (APAC) and India

• Southeast Asia and Australia: Key jurisdictions for CCS due to promising storage reservoirs. Private sector alliances are forming for cross-border CCS value chains involving companies from Australia, Japan, South Korea, and Malaysia. Bilateral agreements are crucial for cross-border transport and offshore storage, adhering to the London Protocol.
• Regulatory Challenges: Countries must ensure compliance with the London Protocol. Non-contracting parties can use the 2009 amendment but must meet certain provisions. Cross-border CCS value chains face uncertainties related to liability allocation, accounting, and verification requirements.

Regional Analysis

The Americas

• Overview: Ongoing policy and regulatory improvements to support large-scale CCS deployment.
• Key Trends: Enhanced fiscal incentives, direct financial support, and commitment to the Carbon Management Challenge.
• Specific Developments: U.S. federal government reviewing and finalizing regulatory programs for offshore storage and CO2 pipeline transportation. Joint policy statements and initiatives for voluntary carbon markets.

Asia Pacific (APAC)

• Overview: Increasing focus on decarbonization with supportive policies and regulatory frameworks.
• Key Trends: Formation of private sector alliances for cross-border CCS value chains, particularly in Southeast Asia and Australia.
• Specific Developments: Bilateral agreements under the London Protocol are essential for cross-border transport and storage. Compliance with the London Protocol and its 2009 amendment is critical.

Europe

• Overview: Supranational and national policies, legal, regulatory, and commercial developments.
• Key Trends: Various policy and regulatory initiatives to support CCS deployment.
• Specific Developments: Detailed policy and regulatory frameworks for CCS, including monitoring, reporting, and verification (MRV) systems.

Middle East and Africa

• Overview: Emerging interest in CCS with specific national policies and initiatives.
• Key Trends: Growing focus on CCS deployment in various countries.
• Specific Developments: Specific national policies and initiatives to support CCS, including regulatory frameworks for post-closure transfer of liabilities and pore space ownership.

Conclusion

A coherent and well-established policy, legal, and regulatory environment is crucial for the successful deployment of CCS technologies globally. While some regions like the U.S., Canada, and Australia have made significant progress, others still face challenges in developing supportive frameworks. Bilateral agreements and adherence to international protocols like the London Protocol are essential for cross-border CCS activities.