The Storage of Carbon Dioxide (Licensing etc.) Regulations 2010

Made: 6th September 2010

Laid before Parliament: 9th September 2010

Coming into force: 1st October 2010

The Secretary of State is designated for the purposes of section 2(2) of the European Communities Act 1972 in relation to the environment.

These Regulations make provision for a purpose mentioned in section 2(2) of that Act, and it appears to the Secretary of State that it is necessary or expedient for certain references to EU instruments, or provisions of those instruments, in these Regulations to be construed as references to those instruments or provisions as amended from time to time.

Accordingly the Secretary of State makes these Regulations in exercise of the powers conferred by section 2(2) of that Act, and by sections 19, 21, 29(1) and (7), and 104(2) of the Energy Act 2008 , as read with paragraph 1A of Schedule 2 to the European Communities Act 1972 .

General

Citation, commencement and interpretation

1

• (1) These Regulations may be cited as the Storage of Carbon Dioxide (Licensing etc.) Regulations 2010, and come into force on 1st October 2010.

• (2) In these Regulations—

• (a) any reference to a numbered section is to that section of the Energy Act 2008;

• (b) any reference to a provision contained in a Schedule includes a reference to a provision having identical legal effect to such a provision; and

• (c) any reference (except in paragraph (4)) to an EU instrument, or a provision of such an instrument, is to that instrument or provision as amended from time to time.

• (3) In these Regulations—

• “appraisal term” has the meaning given by regulation 3(2)(a);

• “the authority” (except in regulation 9) means the Oil and Gas Authority as licensing authority under section 18(2);

• “climate change legislation” means— the Greenhouse Gas Emissions Trading Scheme Regulations 2012; the Greenhouse Gas Emissions Trading Scheme Order 2020; orlegislation which levies a tax in relation to greenhouse gas emissions attributable to a person;

• “CO₂” means carbon dioxide;

• “corrective measures plan” has the meaning given by regulation 7(6);

• “the Directive” means Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide and amending Council Directive 85/337/EEC, European Parliament and Council Directives 2000/60/EC, 2001/80/EC, 2004/35/EC, 2006/12/EC, 2008/1/EC and Regulation (EC) No 1013/2006 ;

• “emissions” (except in the definitions of “the ETS Directive” and “Monitoring Regulation”) has the meaning given by section 97 of the Climate Change Act 2008;

• “entering” in relation to premises includes, where applicable, boarding, and cognate expressions shall be construed accordingly;

• “the Environmental Liability Directive” means Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage ;

• “the ETS Directive” means Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC ;

• “financial security” includes—a charge over a bank account or any other asset;a deposit of money;a performance bond or guarantee;an insurance policy;a letter of credit;

• “general exploration licence” means any licence granted by the authority under section 18(1) which authorises only activities within section 17(2)(c) and the establishment or maintenance of an installation in a controlled place for the purpose of such activities and which—does not grant to the holder or holders the sole right to carry out exploration of a controlled place, andis issued in combination with—a licence under section 4 to explore any controlled place with a view to carrying on activities within section 2(3)(a) to (d) and establish or maintain an installation in a controlled place for the purposes of such exploration, ora licence under section 3 of the Petroleum Act 1998 to search for petroleum in any area below the low water line or in the seaward areas as defined by regulation 3(1)(a) of the Petroleum (Production) (Seaward Areas) Regulations 1988 ;

• “greenhouse gas” (except in the definitions of “the ETS Directive” and “Monitoring Regulation”) has the meaning given by section 92 of the Climate Change Act 2008;

• “injection” means injection of CO₂ into a storage site;

• “inspection” means an inspection of a storage complex for the purpose of discharging a function described in sub-paragraph (a) or (b) of regulation 17(2);

• “inspection report” has the meaning given to it in regulation 18(1);

• “inspector” means a person appointed by the authority under section 27(1);

• “legislation” ... means legislation in force in the United Kingdom (whether passed, or made, before or after the commencement of these Regulations);

• “licence” (except in regulation 9) means a licence (other than a general exploration licence) granted by the authority under section 18(1) in respect of—activities within section 17(2)(a) to (c) and a controlled place which is not in, under or over the territorial sea adjacent to Scotland, orthe establishment or maintenance in a controlled place which is not in, under or over the territorial sea adjacent to Scotland of an installation for the purposes of activities within section 17(2),

• (and “licence holder” is to be construed accordingly);

• “licensed area” means the area within which activities are authorised under the licence;

• “monitoring plan” has the meaning given by regulation 7(5);

• “Monitoring Regulation” means Commission Regulation (EU) No 601/2012 of 21 June 2012 on the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council;

• “operator”, in relation to a storage permit, means the person who carries on or (where different) controls activities at the storage site;

• “post-closure plan” has the meaning given by regulation 13(3) or (4);

• “premises” includes—any carbon storage installation; andany land, vehicle, vessel, aircraft, hovercraft or movable structure, excluding any such thing or part thereof that is used as a dwelling;

• “provisional post-closure plan” has the meaning given by regulation 13(2);

• “routine inspection” has the meaning given to it in regulation 16(1);

• “storage permit” means a consent granted under a licence, authorising the use of a place as a storage site;

• “target date” has the meaning given by regulation 11(3)(a).

• (4) The following expressions have the meanings given by Article 3 of the Directive (and cognate expressions are to be construed accordingly)—

• “closure” (in relation to a storage site);

• “corrective measures”;

• “CO₂ plume”;

• “CO₂ stream”;

• “exploration”;

• “hydraulic unit”;

• “leakage”;

• “migration”;

• “significant irregularity”;

• “significant risk”;

• “storage complex”;

• “storage site”;

• ...

• “waste”;

• “water column”.

• (5) In these Regulations, for the purposes of any reference to Annex II to the Directive, Article 13(2) of the Directive shall be read as if for the words “guidelines established pursuant to Article 14 and Article 23(2) of Directive 2003/87/EC” there were substituted “ Monitoring Regulation ”.

Licences

Limitation on licensing powers

2

A licence may not be granted for the purpose of storing CO₂ in the water column.

Applications for a licence

3

• (1) An application for a licence must be—

• (a) made in writing and sent to the Oil and Gas Authority, ...

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) The application must include—

• (a) a request that the licence specify a period (the “appraisal term”) during which the licence holder has the right to explore the licensed area before making an application for a storage permit, or

• (b) if no such period is requested, a statement of the reasons why such exploration is not considered necessary.

Appraisal term or initial term

4

• (1) The appraisal term may not exceed the period necessary to—

• (a) generate the information necessary to select a storage site, and

• (b) prepare the documents required for an application under regulation 6.

• (2) Subject to paragraph (1), the appraisal term may be extended by the authority at the written request of the licence holder, under the conditions laid down by the licence, provided that the authority is satisfied that any exploration so far carried out has been in accordance with the licence.

• (3) If the licence does not include an appraisal term—

• (a) the licence must specify a period as the “initial term” for the purpose of paragraph (4)(a), but

• (b) that initial term may be extended under the conditions laid down by the licence.

• (4) The licence expires (unless sooner terminated in accordance with its provisions)—

• (a) at the end of the appraisal term or the initial term, if no application for a storage permit is made before that date, or

• (b) if such an application is refused, when that refusal is notified to the licence holder.

Content of a licence

5

A licence must include the provisions contained in Schedule 1.

Storage permits

Applications for a storage permit

6

• (1) The licence holder may, under the conditions laid down by the licence, apply to the authority for a storage permit in respect of a storage site within the licensed area.

• (2) Where the licence includes an appraisal term, the application may not be made unless the exploration required by the licence has been completed, and all other terms and conditions of the licence have been complied with.

• (3) An application must contain at least the following—

• (a) the name and address of the proposed operator;

• (b) evidence of the matters referred to in regulation 7(1)(a) to (d);

• (c) in relation to the CO₂ that is to be contained within the storage site—

• (i) the total quantity that is to be injected and stored;

• (ii) a proposed date on which injection is to commence;

• (iii) the prospective sources and transport methods;

• (iv) the composition of the CO₂ streams that are to be injected;

• (v) the proposed injection rates and pressures;

• (vi) the proposed location of the injection facilities;

• (d) a description of measures to prevent any significant irregularities;

• (e) a proposed monitoring plan drawn up in accordance with Annex II to the Directive and that takes into account the obligations imposed on the operator under the Monitoring Regulation;

• (f) a proposed corrective measures plan;

• (g) the proposed provisional post-closure plan drawn up in accordance with regulation 13(1);

• (h) the information required to be provided in relation to the storage site under legislation which before IP completion day implemented Article 5 of Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment;

• (i) details of financial security that will satisfy the requirements in paragraph 7(1) of Schedule 2, including proof that (if the storage permit is granted) such a security will be in force before the proposed date on which injection is to commence.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Grant of storage permits

7

• (1) Before granting a storage permit the authority must be satisfied that—

• (a) the storage complex and surrounding area have been sufficiently characterised and assessed in accordance with the criteria set out in Annex I to the Directive,

• (b) no part of the storage complex extends beyond the territory of the United Kingdom or another state which is party to an agreement with the United Kingdom concerning cross-boundary cooperation in relation to the complex,

• (c) under the proposed conditions of use of the storage site, there is no significant risk of leakage or of harm to the environment or human health, and

• (d) the conditions in paragraph (3) are met.

• (2) For the purposes of paragraph (1)(b), the territory of a state includes its exclusive economic zone and continental shelf within the meaning of Articles 55 and 76 of the United Nations Convention on the Law of the Sea .

• (3) The conditions are that the proposed operator—

• (a) is technically competent (including in the operation of environmental management systems), financially sound, and can be relied upon to carry out the functions of an operator, and

• (b) has in place an appropriate programme of professional and technical development and training.

• (4) Where more than one proposed storage site is contained within the same hydraulic unit, before granting a storage permit for either site the authority must be satisfied that the requirements for the grant of such a permit can be met simultaneously.

• (5) In considering the application for the storage permit the authority may—

• (a) approve the proposed monitoring plan, or

• (b) require the applicant to make such modifications to it as the authority (after consulting the applicant) considers necessary,

and (if the permit is granted) the monitoring plan is the plan as so approved or modified.

• (6) In considering the application for the storage permit the authority may—

• (a) approve the proposed corrective measures plan, or

• (b) require the applicant to make such modifications to it as the authority (after consulting the applicant) considers necessary,

and (if the permit is granted) the corrective measures plan is the plan as so approved or modified.

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Content of storage permits

8

• (1) A storage permit must include at least the following—

• (a) the name and address of a single person who is a holder of the licence and who is designated as the operator of the storage site;

• (b) the precise location and delimitation of the storage site and the storage complex, and any relevant information concerning the hydraulic unit;

• (c) the operational requirements for storage, including—

• (i) the total quantity of CO₂ authorised to be stored;

• (ii) the reservoir pressure limits; and

• (iii) the maximum injection rates and pressures;

• (d) the provisions relating to acceptance and injection of CO₂;

• (e) any other requirements relating to injection and storage that the authority considers necessary, in particular to prevent significant irregularities;

• (f) requirements designed to prevent any undue interference with other uses of the area surrounding the storage site;

• (g) the provisions relating to monitoring, including the monitoring plan;

• (h) the provisions relating to reporting, and notification of leakages and significant irregularities;

• (i) the provisions relating to notification and implementation of changes, and to review and modification or revocation of the permit;

• (j) the corrective measures plan, and the provisions relating to corrective measures;

• (k) the conditions for closure of the storage site;

• (l) the provisional post-closure plan; and

• (m) the provisions relating to financial security.

• (1A) If the operator is a company, a storage permit must also include the provisions contained in paragraph 6(2) to (11) of Schedule 1, read as if—

• (a) any reference to a company were to the operator,

• (b) the reference in paragraph 6(8)(b) to the licence were to the storage permit, and

• (c) paragraph 6(10)(c) were omitted.

• (2) In paragraph (1) of this regulation, “provisions” means provisions contained in Schedule 2.

Public register

Information to be published on the register

9

• (1) The information prescribed for the purposes of section 29 is the information to which paragraph (2) applies.

• (2) This paragraph applies to the following information—

• (a) the particulars of each licence and storage permit granted;

• (b) the particulars of each storage site (including a storage site that has been closed).

• (3) The particulars referred to in paragraph (2)(a) are—

• (a) the terms and conditions of the licence;