Uncertain liability and stagnating CCS deployment in the European Union: Is it the Member States’ turn?

• DOI: http://doi.org/10.1111/reel.12235
• Date: 01 July 2018
• Published date: 01 July 2018
• Author: Viktor Weber

ORIGINAL ARTICLE

Uncertain liability and stagnating CCS deployment in the

European Union: Is it the Member States’turn?

Viktor Weber

Correspondence

Email: viktor.weber@nus.edu.sg

Funding information

Seventh Framework Programme

Abstract

Even though the European Union (EU) decided to promote carbon capture and stor-

age (CCS) and it enacted a directive eight years ago to speed up the safe deployment

of this technology, there is no functioning project yet in the EU. While this is a well-

understood technology with an important emission reduction potential, it requires a

legal regime which affords sufficient certainty to operators about their potential

liabilities. However, the European legal framework is perceived as achieving the oppo-

site effect. The operator’s liability is uncertain both in temporal and financial terms.

This article considers that after the 2015 review of the CCS Directive, it is clear that

at least a part in overcoming the industry’s difficulties is more Member State action in

the form of pragmatic interpretation and tailor-made agreements, as it is the case in

the ROAD project. Subsequently, certain technical and financial issues related to

European CCS are analysed with a view to facilitate its deployment.

1

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INTRODUCTION

Carbon (dioxide) capture and storage (CCS) is a technology whereby

carbon dioxide (CO

2

) is separated from flue gases at large emission

sources like power stations and factories, compressed and injected

into geological formations like depleted oil and gas fields, saline aqui-

fers and basalt formations. The technology required is both well

understood from similar operations, such as enhanced oil recovery

(EOR) and natural gas storage, and it is the subject of ongoing research

in the specific CCS context. The main attraction of this technology is

its potential contribution to the reduction of greenhouse gas emissions

necessary for mitigating climate change while allowing for a

later phase-out of fossil fuels.

1

Indeed, it has been shown

2

that the

role of CCS is important in efficiently reducing greenhouse gas

emissions to the required level and meeting the 2°C goal of the Paris

Agreement.

3

However, notwithstanding political support from Brussels, the

deployment of this technology stagnates in Europe. There seem to be

two reasons for this. The first is that CCS is a costly technology. The

compression of CO

2

, its transport (by pipeline or ship) and its injection

all demand energy. Also, there is an energy penalty. As a power plant

capturing CO

2

uses energy for this, its efficiency decreases. These

considerations make the establishment of the business case difficult. It

is hoped that soon the European Union’s (EU) emissions trading

scheme will provide a sufficient financial incentive.

4

However,

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1

Coal, the cheapest but also the most polluting fuel, accounts at present for over 40per-

cent of global power generation. International Energy Agency (IEA), ‘Tracking Clean Energy

Progress 2017 –Energy Technology Perspectives 2017 Excerpt’(IEA 2017) 32.

2

International Panel on Climate Change (IPCC), Fifth Assessment Report, Climate Change

2014 –Synthesis Report (IPCC 2014); IEA, ‘20 Years of Carbon Capture and Storage –

Accelerating Future Deployment’(IEA 2016) Chapter 2.

3

Paris Agreement (adopted 15 December 2015, entered into force 4 November 2016) (2016)

55 ILM 740. The Paris Agreement implements the United Nations Framework Convention on

Climate Change (UNFCCC) by ‘holding the increase in the global average temperature to well

below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase

to 1.5°C, increasing the ability to adapt to the adverse impacts of climate change and foster

climate resilience and low greenhouse gas emissions development, in a manner that does not

threaten food production’, and ‘making finance flows consistent with a pathway towards low

greenhouse gas emissions and climate-resilient development’; ibid art 2.

4

CCS may also be profitable in other ways. For example, where it is deployed to avoid a

carbon tax as is the case in Norway (RA Chadwick and O Eiken, ‘Offshore CO

2

Storage:

Sleipner Natural Gas Field beneath the North Sea’in J Gluyas and S Mathias (eds), Geologic-

al Storage of Carbon Dioxide (CO

2

): Geoscience, Technologies, Environmental Aspects and Legal

Frameworks (Woodhead 2013) 227, 227–228) or where the captured CO

2

is sold for

enhanced oil recovery as it was planned in SaskPower’s Boundary Dam project in Canada

(<https://sequestration.mit.edu/tools/projects/boundary_dam.html>).

DOI: 10.1111/reel.12235

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