CCS and legal challenges

Transcription

1 CCS and legal challenges Driving CCS forward Høvik, 10 Sep 2015 Dag Erlend Henriksen Partner, Arntzen de Besche Advokatfirma AS Arntzen de Besche

2 KEY MESSAGE Challenges?? What challenges? Arntzen de Besche 9/16/2015 2

3 LEGAL CHALLENGES A legal challenge: When a desired behavior or action is prohibited by law, or when there is a contract or other legal instrument in place that leads to unreasonable high costs compared to alternative behavior or action Legal instruments: Laws and regulations; prohibits undesired behavior, sets up requirements for permits/licenses for specific activities Treaties and conventions; public international law, prohibits undesired behavior, setting requirements for the states permitting/licensing regime Incentives and support schemes; promotes desired behavior Agreements; allocates responsibilities, risks, rights and obligations, incentivizes or punishes actions Arntzen de Besche 9/16/2015 3

4 WARMING UP Arntzen de Besche 9/16/2015 4

5 WARMING UP SOME MORE What legal challenges are unique to CCS? Is it prohibited as such? Cross-border transportation of CO2 to and from Norway is prohibited under the London Protocol but apart from that? Is there a lack of legislation? Is there a lack of suitable agreements that can be applied or adapted? Arntzen de Besche 9/16/2015 5

6 END OF WARM-UP From a legal point of view, what distinguishes CCS from other industrial processes whether the market for parts of the technology or equipment is commercially mature or not? Is it not mostly the same legal challenges as you would face in any mega-sized industrial project? Arntzen de Besche 9/16/2015 6

7 SOME FACTUAL CIRCUMSTANCES Investing in (some) immature or even unproven technology Upscaling Long term financial conditions uncertain Difficult to establish a business case for CCS Need external funding from a non-commercial source Extremely challenging investment climate Arntzen de Besche 9/16/2015 7

8 LEGAL CHALLENGES WITH RESPECT TO CCS (1) On the basis of the facts these are the legal challenges: Obtain funding; utilizing the legal framework for state aid and public financial contributions to the maximum extent Obtain permits; clarify the requirements carry out EIAs apply and defend against complaints and possible legal actions by NGOs or others Arntzen de Besche 9/16/2015 8

9 LEGAL CHALLENGES WITH RESPECT TO CCS (2) More legal challenges: Plan and procure; identify and mitigate major hazards and risks select and define a procurement process adapted to your project execution model specify the needs of the project qualify technology and vendors but see below.. select the right contractual framework interfaces, IP, confidentiality vs sharing negotiate and conclude necessary agreements Key note for this phase: avoid unnecessary documentation requirements apply technical and procedural standards wherever possible do not apply contractual experience / modus operandi from the oil and gas business with respect to documentation requirements Arntzen de Besche 9/16/2015 9

10 LEGAL CHALLENGES WITH RESPECT TO CCS (3) Even more legal challenges: Completion; getting the technology to work defining key parameters obtain proper guarantees to be applied if it does not implement corrective actions Operation; select the right operation & maintenance framework (incl compensation mechanisms) obtain rights of use to technology consider Freedom to Operate Post-operation; find commercial acceptable solutions to long term liability Arntzen de Besche 9/16/

11 Q&A Question: Are any of these legal challenges specific to CCS? Answer: No, but they still have to be solved!! And that can be challenging. Arntzen de Besche 9/16/

12 GETTING TO THE POINT Legal challenges are not the most important factor for realizing CCS The business drivers are not strong enough insufficient demand = market failure Despite political slogans and speeches: Support schemes / project specific support decisions have been insufficient Governments have not been willing to follow through with sufficient funding Selected the wrong projects? Arntzen de Besche 9/16/

13 THANK YOU FOR THE ATTENTION! Dag Erlend Henriksen P.O. Box 2734 Solli, 0204 Oslo, Norway

14 ADDITIONAL INFORMATION: THE REGULATORY FRAMEWORK FOR CCS EU directives Directive 2009/31/EC CCS Directive Directive 2009/29/EC ETS Directive Directive 2004/35/EC Environmental Liability Directive Public international law London Convention, Protocol to the London Convention OSPAR Convention United Nations Convention on the Law of the Sea (UNCLOS) United Nations Convention on Climate Change (UNFCCC) Norwegian laws and regulations The Continental Shelf Act The Petroleum Act The Pollution Control Act Greenhouse Gas Emission Trading Act Act relating to CO2 tax in the petroleum activity on the continental shelf The Administration Act The Planning and Building Application Act Regulations for transport and storage of CO2 The petroleum regulations The Pollution Control Regulations The Greenhouse Gas Emission Trading Regulations The Environmental Impact Assessment Regulations The Planning and Building Application Regulations The Framework Regulations The Management Regulations The Technical and Operational Regulations The Activities Regulations The Facilities Regulations Arntzen de Besche 9/16/