Explanatory Memorandum to COM(2008)18 - Geological storage of carbon dioxide - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2008)18 - Geological storage of carbon dioxide. |
|---|---|
| source | COM(2008)18  |
| date | 23-01-2008 |
Grounds for and objectives of the proposalEnergy efficiency and renewables are in the long term the most sustainable solutions both for security of supply and climate. However, we cannot reduce EU or world CO2 emissions by 50% in 2050 if we do not also use the possibility to capture CO2 from industrial installations and store it in geological formations (carbon dioxide capture and storage, or CCS). Around a third of existing coal fired power capacity in Europe will be replaced in the next 10 years. Internationally, China, India, Brazil, South Africa and Mexico's energy consumption will lead a major global demand increase, which is likely to be met in large part from fossil fuels. This legal framework is designed to ensure that CO2 capture and storage is an available mitigation option, and that it is done safely and responsibly.
General contextThe Commission Communication on meeting the Community's objective of limiting climate change to 2° C clarifies that in the context of the global reduction of CO2 emissions of 50% by 2050, a reduction in emissions of 30% in the developed world by 2020 is required, rising to 60-80% by 2050, that this reduction is technically feasible and the benefits far outweigh the costs, but that, to achieve it, all mitigation options must be harnessed, among them carbon dioxide capture and storage.The Second European Climate Change Programme (ECCP II) set up a Working Group on Carbon Capture and Geological Storage. The Working Group stressed the need for the development of both policy and regulatory frameworks for CCS. The Communication on Sustainable Power Generation from Fossil Fuels of January 2007 set out an action plan for the Commission during 2007, which required the development of a sound management framework for CCS. Following this, the Brussels European Council of March 2007 also urged the Member States and the Commission develop the necessary technical, economic and regulatory framework to bring environmentally safe CCS to deployment.
Existing provisions in the area of the proposalWhere possible, existing provisions have been used to manage the risks of CCS. Directive 96/61/EC concerning Integrated Pollution Prevention and Control (IPPC) is used for regulating the risks of CO2 capture. Directive 85/337/EEC on the assessment of the environmental impact of certain projects (EIA) is used for assessing environmental impact of capture, pipeline transport and storage. Directive 2004/35/EC on Environmental Liability is used for regulating the liability for local environmental damage from CCS. Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading is used for regulating the liability for climate damage by requiring surrender of allowances for leakage.
Consistency with the other policies and objectives of the UnionThe proposal is consistent with the Sustainable Development Strategy, because it reconciles security of supply with climate change objectives. It is consistent with the Strategy for Growth and Jobs because enabling CCS will promote innovation and potentially position the EU in a new technology market.
Consultation of interested parties
Consultation methods, main sectors targeted and general profile of respondentsConsultation was conducted mainly via meetings with stakeholders. The European Climate Change Programme Working Group III on CCS met four times during the first half of 2006. An internet consultation 'Capturing and storing CO2 underground - should we be concerned?' was conducted which received 787 responses. A large-scale stakeholder meeting was held on 8 May 2007 where the Commission presented an outline of its intended regulatory framework and gave the opportunity to comment. Further ad-hoc meetings with smaller groups were held on particular aspects of the proposal.
Summary of responses and how they have been taken into accountThe internet consultation showed strong support for the main objectives set out in the Communication on sustainable power generation from fossil fuels COM(2006) 843. Stakeholders were most concerned about the potential diversion of effort away from energy efficiency and renewables, and about ensuring that stored CO2 remains underground. The targets for a 20% improvement in energy efficiency by 2020 and for a 20% share of renewables in final energy demand will ensure that those initiatives remain at the centre of climate and energy policy. The focus of the enabling legal framework is on the security of storage, which is the major stakeholder safety concern.The Commission's outline of its proposed legal framework was broadly welcomed. There was however concern, on subsidiarity and proportionality grounds, regarding proposed powers for the Commission to accept or reject draft permitting decisions made by national competent authorities. This has been addressed by instituting a review at EU level but ensuring that the national competent authority retains the final say.A requirement for mandatory CCS from a specific date was welcomed by some respondents (principally NGOs) and questioned by others. Those who questioned it did so on the basis that the technology was insufficiently mature to be mandated, and that the implications for the energy mix were unpredictable. The Commission addressed the economic, social and environmental implications of mandatory CCS in the impact assessment and concluded that at this time a mandatory requirement should not be imposed.
An open consultation was conducted over the internet from 19.2.2007 to 30.4.2007. The Commission received 787 response(s). The results are available on ec.europa.eu/environment/climat/ccs/index_en.
Scientific/expertise domains concernedThe main areas where scientific expertise were required were: energy modelling to predict the outcome of various options for promoting CCS deployment; assessment of availability and likely use of storage capacity across Europe based on those scenarios; assessment of the environmental impacts of the deployment in question; and development of a risk management framework to minimise those impacts.
Methodology usedEnergy modelling of scenarios was done using the PRIMES model of the National Technical University of Athens (NTUA). The results were then used to develop model capture, transport and storage networks in the EU using the source-sink matching tool developed under the CASTOR FP6 project, and the storage capacity database of the GEOCAPACITY FP6 project. The environmental impacts of these scenarios were assessed using the POLES model of IIASA for air quality, and using a methodology developed by ERM for all other environmental impacts. Technical input on appropriate risk management strategies was derived from approaches developed by ERM and ECN; from the OSPAR Commission deliberations and the resulting Framework for Risk Management (FRAM) adopted at the 2007 OSPAR Commission meeting; and from the FP6 project CO2ReMoVe.
Main organisations/experts consultedThe National Technical University of Athens, for energy modelling; TNO, the British Geological Survey, GEUS and SINTEF and the CASTOR and GEOCAPACITY FP6 projects; the CO2ReMoVe FP6 project; ECN, ERM and IIASA for environmental risk assessment and risk management. Discussion with the European Technology Platform for Zero Emission Fossil Fuel Power Plant (ETP-ZEP) a stakeholder initiative supported by the Commission, was particularly useful. Other significant inputs were papers from the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency, in particular its Greenhouse Gas R&D programme.
Summary of advice received and usedThe existence of potentially serious risks with irreversible consequences has been mentioned. There is no consensus on the existence of such risks.
This does not mean that there are no risks associated with CCS. However, the particular concerns raised in this case (by the University of Science and Technology of Krakow, in a letter to the Commission) are not widely shared. In fact there a broad scientific consensus, best expressed in the IPCC Special Report on CCS, that for properly selected, managed and decommissioned sites, the risk of leakage, and a fortiori of irreversible consequences, is in fact low. It is the task of this proposal to ensure that such procedures are in place.
Means used to make the expert advice publicly availableThe documents used from the IEA and the IPCC are public already. For the impact assessment work, the PRIMES scenarios will be made available on the internet, as will reports of the IIASA, TNO and ECN/ERM projects.
Impact assessmentThe impact assessment considered the best way to regulate capture, transport and storage; and the appropriate option for incentivisation of CCS. The next two paragraphs deal with regulation; the remainder, with incentivisation.For regulation of capture and transport, a conservative approach was taken. On the basis that there is no risk difference justifying a different approach for CO2 capture and transport than for similar activities already regulated (e.g. natural gas pipelines), existing regulatory frameworks will be used for these components.For storage, the options to regulate risks were (i) the Emissions Trading Directive; (ii) to use IPPC; (iii) to use waste legislation; and (iv) to develop a new framework. The ETS is not designed for complete regulation of the environmental risks of CCS, and IPPC and the waste acquis are not well adapted to the specific requirements of regulating CO2 storage, and could be made so only by extensive amendment. It was thus decided to develop a new framework.For incentivisation, the options were (i) to enable CCS under the Emissions Trading Scheme, and allow the carbon market to determine deployment; and (ii) in addition to (i), to make CCS deployment mandatory (and retrofit also mandatory) after a specific date. Mandatory CCS stimulates earlier deployment but at substantial additional cost; under the carbon market, CCS will be deployed if and when it is cost-effective. It was decided not to make CCS mandatory at this stage.
The Commission carried out an impact assessment listed in the Work Programme, whose report is accessible onec.europa.eu/environment/climat/ccs/index_en.
Contents
Summary of the proposed actionThe proposal ensures that CO2 capture is regulated under Directive 96/61/EC and that both CO2 capture and pipeline transport are regulated under Directive 85/337/EEC. But its main scope is the regulation of CO2 storage and the removal of barriers in existing legislation to CO2 storage.
Legal basisArticle 175 i
Subsidiarity principleThe subsidiarity principle applies insofar as the proposal does not fall under the exclusive competence of the Community.
The objectives of the proposal cannot be sufficiently achieved by the Member States for the following reason(s).
Action by Member States alone would not be sufficient to ensure a comparably high overall level of environmental integrity of CO2 storage across Europe. Action at Member State level would not be capable of covering the permitting of transboundary storage sites, or of ensuring equal access to the transport and storage network across Europe. The setting of permit conditions and conditions for transfer of responsibility for the storage site to the state at Member State level could also lead to distortion of competition.
CO2 captured and stored will be credited as not emitted under the Emissions Trading Scheme. If comparable security of storage is not achieved across Europe, there would be distortion of the carbon market and failure to effectively achieve the Member States' climate objectives.
Community action will better achieve the objectives of the proposal for the following reason(s).
EU action can ensure that the above issues are addressed consistently, by establishing common permit conditions, a common condition on transfer of responsibility to the state, provisions on equal access to transport and storage, and provisions for permitting of transboundary sites. A consistently high level of protection of the environment and human health across Europe can be ensured, and distortion of the carbon market avoided.
The approach is consistent with precedent in other areas, since activities of comparable environmental risk and competition implications (for instance landfills) are regulated at EU level for similar reasons.
The requirements on permitting, operation and monitoring, and closure are restricted to those needed to ensure a comparable level of environmental protection across the EU. Other measures are limited to areas where action by Member States alone may induce distortion of competition: transfer of responsibility to the state, financial provision for liabilities, and access to the transport and storage network.
The proposal therefore complies with the subsidiarity principle.
Proportionality principleThe proposal complies with the proportionality principle for the following reason(s).
The chosen legal instrument is a Directive, as it establishes objectives and general requirements for CO2 storage whilst leaving the details of the implementation to the Member States.
The requirements for permitting of storage sites, and the requirements for characterisation, monitoring and closure, are essential provisions for ensuring environmental integrity and to avoid risks of distortions of competition. In particular the requirements on site selection and monitoring must be appropriately detailed to ensure the highest level of environmental protection and public confidence from the start. The review of permits by the Commission is justified by the additional confidence it will provide on the safety of the first generation of storage sites, and by the experience it will provide on site characterisation and monitoring. This experience will enable the Commission to establish further implementation rules or guidelines in due course. The Commission will by 2015 assess the continued need for permit review and may propose appropriate measures.
Proposed instruments: directive.
Other means would not be adequate for the following reason(s).The permitting regime must be legally binding to ensure the required level of environmental protection. A regulation is not appropriate because the requirements are specified in a way that leaves the discretion on implementation to the Member States.
Commission review of permitting decisions will entail budgetary implications of around €0.76 million per year.
Simplification
The proposal provides for simplification of legislation, simplification of administrative procedures for public authorities (EU or national).
If no action were taken, many pieces of existing legislation on waste, water and industrial emissions could apply to CCS and the situation would be legally uncertain. This proposal establishes clearly what provisions of existing legislation should apply to which aspects of carbon dioxide capture and storage.
Rather than having to adapt transposing legislation for water, waste and industrial emissions to regulate CO2 storage, one single framework will be sufficient.
The proposal is included in the Commission's Work and Legislative Programme under the reference 2007/ENV/004.
Correlation tableThe Member States are required to communicate to the Commission the text of national provisions transposing the Directive as well as a correlation table between those provisions and this Directive.
European Economic AreaThe proposed act concerns an EEA matter and should therefore extend to the European Economic Area.
Detailed explanation of the proposalChapter 1 covers subject matter, scope and definitions. In particular, these articles specify that the objective of geological storage is permanent containment, and that storage in the water column is prohibited.Chapter 2 covers site selection and exploration permits, clarifying that Member States determine the areas to be made available for storage, the condition for site use, and including provisions governing exploration. Chapter 3 covers storage permits. Article 10 provides for review of draft permit decisions by the Commission. The Commission may provide an opinion which the competent authority would take into account in making its permitting decision. A further provision relevant in this context is the conferring of the Environmental Impact Assessment Directive (85/337/EEC as amended by 97/11/EC) on CO2 storage sites in Article 29 paragraph 1 point b, thus ensuring impact assessment and public consultation.Chapter 4 covers operation, closure and post-closure obligations, including CO2 acceptance criteria, monitoring and reporting obligations, inspections, measures in case of irregularities and/or leakage, closure and post-closure obligations and provision of a financial security.Chapter 5 sets out provisions on access to transport and storage. Chapter 6 covers general provisions on the competent authority, transboundary co-operation, penalties, reporting, amendments and the relevant comitology procedures. Chapter 7 collects the required amendments to other legislation, including the necessary adaptations to the water and waste legislation, and Chapter 8 collects the standard final provisions.Annex I specifies detailed criteria for the requirements on site characterisation and risk assessment of Article 4. Annex II specifies detailed criteria for the requirements on monitoring of Article 13.
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