MarIus 537: Carbon Capture, Transport and Storage Under the EU Emissions Trading System – Accommodating Mobile CO2 Transport

This thesis analyses the primary economic incentive for applying Carbon Capture and Storage Technologies in Europe:  the European Union Emissions Trading System. Carbon capture and storage (CCS) represent a key climate mitigation technology in all the major emission pathways towards the Paris Agreement temperature targets. Major CCS projects are underway in Europe, with the Norwegian 'Longship'-project spearheading the development. Investment decisions from both the private parties and the Norwegian Government are now in place, aiming for operation launch in 2024. A significant part of the business model of these emerging 'cluster'-projects is how they rely on mobile CO2 transport to connect decentralised capturing points to a centralised pipeline and storage network.

Omslag

MarIus 537: Carbon Capture, Transport and Storage Under the EU Emissions Trading System – Accommodating Mobile CO2 Transport 

Simply put, the Emission Trading System Directive incentivises CCS because emission allowances need not be surrendered for stored CO2. However, the important implementing rules on monitoring and reporting of emissions only includes provisions on how to account for emissions associated with the pipeline transport segment. In other words, there are no provisions accounting for emissions occurring during a mobile CO2 transport segment, i.e. by ships or trucks.

This legal 'gap' prompts the unnerving question of whether employing mobile CO2 transport disqualifies a CCS project from the incentive set forth in the Emission Trading Directive. This question is the main research question of the thesis. Whether and how the trading system accommodates mobile CO2 transport is important for the long-term commercial viability of these forthcoming projects.

The analyses focus on the problematic provisions of the Monitoring and Reporting Regulation and how they should be interpreted within the context of the superior norms of the Emissions Trading System Directive. The analysis identifies the key legal issues and suggests a teleological interpretation that makes the incentive for CCS available for projects that employ mobile CO2 transport. Amending the legal framework would, however, provide more clarity and prompt investor confidence. Suggestions for possible amendments are therefore provided.

The conclusion in this thesis is now supported by an opinion issued by the European Commission relating to the Norwegian Longship project. The brief Commission opinion shares the view that the use of shipping or trucks does not deprive any operators within the CCS value chain from the right to deduct CO2 that is eventually stored. The opinion does not address the legal issues associated with such a conclusion but prompts that tailormade monitoring plans must be issued to account for any emissions. The analyses in this thesis may serve as a basis of reference for the issues and suggested solutions that enable this conclusion.

Emneord: CCN, Karbonfangst og -lagring Av Forfatter: Heidi Sydnes Egeland
Publisert 29. jan. 2021 11:27 - Sist endret 4. mars 2021 09:21