CCS Directive to Enter into Force in EEA countries on 1 June 2013 (Norway, Iceland and Liechtenstein)

The directive on the geological storage of carbon dioxide, Directive 2009/31/EC (so-called CCS Directive), was adopted on 23 April 2009 by the EU legislator. After the clearance on 11 April 2013 by the Icelandic authorities of some constitutional requirements, the Directive is now binding on the three states of the European Economic Area Agreement (EEA Agreement), which are Norway, Iceland and Liechtenstein. Date of entry into force and deadline for transposition are 1 June 2013.

Main components of the CCS Directive

The CCS Directive establishes "a legal framework for the environmentally safe geological storage of CO2"  in the European Union, as an integral part of EU's climate change policy (Art. 1.1). It regulates the whole CCS chain, i.e.:

- evaluation of the available storage volumes, once decision to start storage is made by the state;

- selection of the storage sites, assessment and characterisation of the suitability of the sites, storage complex and surrounding area;

- exploration permitting rules (mandatory), under the supervision of the national competent authority (CA);

- storage permit (mandatory) to the sent to the CA. Information obligations towards the European Commission as regards received permit applications and draft storage permits (non-binding opinion on the latter).

- CA has review obligations as to the permit delivered (particular circumstances for withdrawal include: leakages, irregularities, non-respect of permit conditions, technological progress adaptations);

- storage site operator's duties as to CO2 streams monitoring (monitoring plan) and register;

- third party access rules for the CO2 transport networks and CO2 storage sites;

- financial security to be constituted by the operator before submitting its storage permit application and maintenance of the security;

- closure and post-closure obligations;

- operator's responsibility and transfer of responsibility to the CA after closure.

The directive entered into force on 25 June 2009, and the deadline for transposition into the national legislation of the EU Member States was 25 June 2011. Most of the EU Member States have communicated their national executive measures to the Commission.

The Directive, now binding on the EEA states

Through the Agreement on the European Economic Area (EEA Agreement), the EEA states (Norway, Iceland and Liechtenstein  are committed to transpose into their national legislation the EU legislative acts that are incorporated into the Agreement. The date for entry into force should be as close as possible to the one set for the EU Member States, but in some circumstances, the date can be postponed, either due to political reasons or due to the existence of constitutional requirements in the national states. The general rules for entry into force of legislation incorporated into the EEA Agreement are set in Article 103 of the Agreement.

In the present case, the EEA Committee agreed on the incorporation of the directive into the EEA Agreement by its decision of the EEA Joint Committee dated 15 June 2012. The text was adopted without any particular reserve. However, the date for entry into force was left "pending", which left the three states in a particular situation of not being formally bound as to the entry into force of the text.

With the final clearance by Iceland on 11 April 2013, the date for entry into force of the directive in EEA states is now set to 1 June 2013, which is also the deadline for transposition of the text into the national legislation of the three states in the present case. The adoption of national implementation measures is consequently expected before the summer.

Some forthcoming challenges

Getting commercial projects - CCS is technically viable, but finding commercial projects in addition to R&D is currently challenging in Europe and internationally. The European Commission just launched on 3 April 2013 its second call of NER300 programme (see previous post). At international level, the US leads the market, and China is expected to follow in a little decade. In Norway, Gassnova SF published a report as to the conditions for full scale CCS in Norway (press release here, in Nor.). VTT released a report in 2010 as to the Potential for carbon capture and storage in the Nordic region, which includes both Norway and Iceland.

Identifying the reservoirs and directive's scope of application - The Directive applies to storage of CO2 within the territory of the Member States, their exclusive economic zones and their continental shelves. Depending on the location of the reservoirs as decided by the EEA states, their might be some legal issues to sort out as to the geographical applicability of the directive.

Permanent storage and/or Enhanced Oil/Gas Recovery (EOR) - Although the directive aims to the "permanent storage" of CO2, it opens for EOR activities. EOR is seen as a manner to beneficially reuse CO2 and great hopes are put in EOR with storage. But uncertainties remains as to the real level of CO2 volumes for EOR, and, technically and financially, whether EOR feats petroleum exploitation activities. It is notable, as observed by the Global CCS Institute, that CCS has been advancing as two speeds: oil and gas-related projects which are making progress (including with EOR), and industrial and power plants related projects which are advancing slowly and even "locked in the commercial 'valley of death' ". CCS costs will also remain constant compared to decreasing costs for other low carbon technologies such as renewables.

Reporting obligations - Simultaneously to the entry into force of the directive, reporting obligations defined in a Commission decision from February 2011 will also enter into force at EEA level on 1 June 2013 (Commission Decision 2011/92/EU of 10.02.2011; EEA Committee Decision of 29.09.2012). EFTA Surveillance Authority (ESA) will take over reporting obligations control given to the European Commission by the directive. 

Picture: "Carbon capture and storage"