The Storage of Carbon Dioxide (Termination of Licences) Regulations 2011

Made: 10th June 2011

Laid before Parliament: 15th June 2011

Coming into force: 11th July 2011

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, as read with paragraph 1A of Schedule 2 to, that Act, and by section 31 of the Energy Act 2008 .

General

Citation and commencement

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These Regulations may be cited as the Storage of Carbon Dioxide (Termination of Licences) Regulations 2011, and come into force on 11th July 2011.

Review

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• (1) Before the end of each review period, the Secretary of State must—

• (a) carry out a review of regulations 3 to 19, except in so far as they apply to any licence granted or function exercised by the Scottish Ministers;

• (b) set out the conclusions of the review in a report; and

• (c) publish the report.

• (2) In carrying out the review the Secretary of State must, so far as is reasonable, have regard to how Articles 18 and 20 of the Directive (which are implemented by means of regulations 3 to 19) are implemented in other member States.

• (3) The report must in particular—

• (a) set out the objectives intended to be achieved by the regulatory system established by regulations 3 to 19;

• (b) assess the extent to which those objectives are achieved; and

• (c) assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved with a system that imposes less regulation.

• (4) In this regulation, “review period” means—

• (a) the period of five years beginning with the day on which these Regulations come into force; and

• (b) subject to paragraph (5), each successive period of five years.

• (5) If a report under this regulation is published before the last day of the review period to which it relates, the following review period is to begin with the day on which that report is published.

Interpretation

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• (1) In these Regulations—

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

• (b) subject to paragraph (2), any reference to an EU instrument, or a provision of such an instrument, is to that instrument or provision as amended from time to time.

• (2) Paragraph (1)(b) does not apply to the definitions referred to in paragraph (4), regulation 14(3) or regulation 15(3)(c).

• (3) In these Regulations—

• “abandonment programme”, in respect of a licence, means the abandonment programme (within the meaning of section 29(1) of the Petroleum Act 1998 ) applicable to an installation established or maintained in accordance with that licence for the purposes of an activity mentioned in section 17(2)(a), (b) or (c);

• “applicant” means a licence holder who has made a termination application;

• “appropriate Minister” means either—the Secretary of State, where the OGA is the licensing authority in accordance with section 18(2); orthe Scottish Ministers, where the Scottish Ministers are the licensing authority in accordance with section 18(2);

• “authority” means either—the OGA; orthe Scottish Ministers,as licensing authority in accordance with section 18(2);

• “CO₂” means carbon dioxide;

• “the Directive” means Directive 2009/31/EC of the European Parliament and of the Council 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 ;

• “licence” has the meaning given to it in the licensing regulations (and “licence holder” is to be construed accordingly);

• “licensing regulations” means the Storage of Carbon Dioxide (Licensing etc.) Regulations 2010 or, in respect of licences issued by the Scottish Ministers, the Storage of Carbon Dioxide (Licensing etc.) (Scotland) Regulations 2011 ;

• “notice” means notice in writing (and “notification” and “notify” shall be construed accordingly);

• “operator”, in relation to a storage permit, means the person who carries on or (where different) controls activities at the storage site or, where a storage permit has been terminated or revoked, the person who carried on or (where different) controlled activities at the storage site immediately before such termination or revocation;

• “post-transfer costs” means the costs for which the authority will be liable as a result of the transfer of obligations and liabilities to the authority pursuant to regulations 14 and 15;

• “storage permit” has the meaning given to it in the licensing regulations;

• “termination application” means an application under regulation 4 for termination of a licence;

• “termination notice” means a notice served by the authority as required by regulation 11(2)(a) or regulation 12(2);

• “transfer report” means a report that complies with Article 18(2) of the Directive.

• (4) In these Regulations, the following expressions have the meanings given by Article 3 of the Directive (and cognate terms shall be construed accordingly)—

• “closure”;

• “leakage”;

• “storage site”.

Applications and information

Applications for termination

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• (1) Where a storage site has been closed in accordance with the terms of a licence, the licence holder may apply to the authority for the licence to be terminated.

• (2) An application for termination of a licence must—

• (a) be made in writing to the authority; and

• (b) include a transfer report in respect of the storage site permitted under the licence.

Request for a transfer report

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• (1) Where—

• (a) a storage site has been closed in accordance with the terms of a licence, and

• (b) no termination application has been made to the authority,

the authority may request the operator to provide a transfer report within the period specified in the request.

• (2) Where the authority requests a transfer report under paragraph (1), the operator must, within the specified period, provide to the authority—

• (a) a transfer report; or

• (b) a statement of the reasons why the operator is unable to provide a transfer report.

Information to be provided to the European Commission

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Termination where a storage site has been closed in accordance with the terms of a licence

Minimum period

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• (1) When the authority approves a proposed post-closure plan in respect of a storage site in accordance with the licensing regulations, the authority must determine the minimum period (the “minimum period”) that must elapse between the date of closure of the storage site and the termination of the licence.

• (2) Subject to paragraph (3), the minimum period must be no less than twenty years from the date of the closure of the storage site.

• (3) Where the minimum period has not elapsed and the authority considers that the condition set out in regulation 8(a) has been met, the authority may reduce the period determined under paragraph (1), which reduced period becomes the minimum period.

• (4) The authority must notify the licence holder, as soon as reasonably practicable, of the minimum period determined under paragraph (1) or (3).

Transfer conditions

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For the purposes of regulations 9 to 11, the transfer conditions are that—

• (a) all available evidence indicates that the stored CO₂ will be completely and permanently contained;

• (b) the minimum period (determined under regulation 7) has elapsed;

• (c) the operator has provided the financial contribution notified to it under regulation 10(4);

• (d) the storage site has been sealed and the injection facilities have been removed; and

• (e) the abandonment programme has been carried out in accordance with Part 4 of the Petroleum Act 1998 .

Issuing a draft termination notice

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• (1) Paragraph (2) applies where the authority receives a transfer report under regulation 4(2)(b) or 5(2)(a).

• (2) Where this paragraph applies, the authority must prepare a draft termination notice if it is satisfied that—

• (a) the transfer report complies with Article 18(2) of the Directive; and

• (b) the conditions listed in regulation 8(a) and (b) have been met in respect of the storage site.

• (3) Where a draft termination notice is prepared under paragraph (2), the authority must prepare a statement of—

• (a) the method by which the authority will determine whether or not the conditions listed in regulation 8(d) and (e) have been met; and

• (b) whether any part of the abandonment programme remains to be carried out.

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

• (5) Where the authority is not satisfied under paragraph (2), the authority must as soon as reasonably practicable notify the licence holder of the reasons for its decision.

Financial obligations

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• (1) Where the authority prepares a draft termination notice under regulation 9(2), it must determine the amount and form of financial contribution from the operator that the authority considers will be sufficient to cover the expected post-transfer costs.

• (2) In determining the amount and form of financial contribution, the authority must—

• (a) take into account the factors set out in Article 20(1) of the Directive; and

• (b) consider any representations received from the operator pursuant to paragraph (3).

• (3) The authority must—

• (a) notify the operator of the determination it intends to make;

• (b) in that notification give the operator at least 28 days in which to make written representations to the authority.

• (4) The authority must notify the operator of—

• (a) the authority's determination of the amount and form of the financial contribution; and

• (b) the date by which the financial contribution must be provided to the appropriate Minister.

• (4A) Where the OGA is the licensing authority in accordance with section 18(2), it must provide to the Secretary of State a copy of any notification given under paragraph (4).

• (5) The operator must provide the financial contribution to the appropriate Minister in accordance with the notification made under paragraph (4).

Serving a termination notice

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• (1) Where the authority has prepared a draft termination notice under regulation 9(2), it must—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) determine whether or not each transfer condition set out in regulation 8 has been met.

• (2) Where the authority determines that each transfer condition set out in regulation 8—

• (a) has been met, it must serve a termination notice in accordance with regulation 13(1); or

• (b) has not been met, it must notify the licence-holder of that determination and the reasons for it.

• (2A) Where the OGA is the licensing authority in accordance with section 18(2), it must provide to the Secretary of State a copy of any notification given under paragraph (2)(b).

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) Where—

• (a) paragraph (2)(b) applies;

• (b) the operator has provided the financial contribution notified to it under regulation 10(4); and

• (c) the operator requests the return or release of that contribution from the appropriate Minister,

the appropriate Minister must comply with that request within 90 days of receipt of the request.

Termination where a storage site has been closed after the revocation of a storage permit

Serving a termination notice after revocation of a storage permit

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• (1) Paragraph (2) applies where a storage site is closed pursuant to regulation 12(2)(a) or (3)(a) of the Storage of Carbon Dioxide (Licensing etc.) Regulations 2010 or regulation 11(2)(a) or (3)(a) of the Storage of Carbon Dioxide (Licensing etc.) (Scotland) Regulations 2011.

• (2) Where this paragraph applies, the authority must serve a termination notice in accordance with regulation 13(1) if it is satisfied that in respect of the storage site—

• (a) all available evidence indicates that the stored CO₂ will be completely and permanently contained; and

• (b) the storage site is sealed and the injection facilities have been removed.

Content and effects of a termination notice

Termination notices and the provision of information

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• (1) A termination notice must be served on the licence holder and must specify the time and date when the licence terminates.

• (1A) Where the OGA is the licensing authority in accordance with section 18(2), it must provide to the Secretary of State a copy of any termination notification served under paragraph (1).

• (2) Where the authority serves a termination notice, the appropriate Minister may by written notice to the licence holder require the licence holder to provide the appropriate Minister with all records, returns, plans, maps, samples, data and other information that the licence holder holds in respect of the storage site.

• (3) The appropriate Minister may use any information provided ... under paragraph (2) for the purposes of carrying out the obligations transferred ... under regulation 14 or discharging the liabilities transferred ... under regulation 15, or such ... other functions as the appropriate Minister considers appropriate.

Transfer of obligations

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• (1) Except as provided in paragraph (2) and regulation 15, the termination of a licence does not affect any obligation imposed upon, or liability incurred by, the licence holder.

• (2) Immediately on the termination of a licence, there are transferred from the licence holder to the appropriate Minister the licence holder's obligations in relation to—

• (a) monitoring, pursuant to Articles 13 and 18(6) and Annex II of the Directive;

• (b) corrective measures;

• (c) the offset of emissions which are leakage under climate change legislation (if any); and

• (d) preventive and remedial action under legislation which before IP completion day implemented Articles 5(1) and 6(1) of 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 .

• (3) In this regulation—

• (a) “climate change legislation” means—

• (i) the Greenhouse Gas Emissions Trading Scheme Regulations 2012;

• (ii) the Greenhouse Gas Emissions Trading Scheme Order 2020; or

• (iii) legislation which levies a tax in relation to greenhouse gas emissions attributable to a person;

• (b) “corrective measures” has the meaning given to it by Article 3 of the Directive;

• (c) “emissions” (except in sub-paragraphs (d) and (g)) has the meaning given to it by section 97 of the Climate Change Act 2008;

• (d) “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;

• (e) “greenhouse gas” (except in sub-paragraphs (d) and (g)) has the meaning given to it by section 92 of the Climate Change Act 2008;

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

• (g) for the purposes of the references to Article 13 of the Directive and Annex II to the Directive in paragraph (2)(a), Article 13(2) 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 “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”.

Transfer of liabilities

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• (1) Immediately on the termination of a licence, there are transferred from the licence holder to the appropriate Minister any leakage liabilities incurred by the licence holder prior to termination of the licence, subject to paragraph (2).