The document summarizes regulatory issues related to carbon capture and storage (CCS) within the United Nations Framework Convention on Climate Change pre- and post-2012. It provides an overview of regulatory trends, with Australia, Canada, the US, and EU identified as leaders in regulatory development. It also summarizes recent developments, including CCS inclusion in the Clean Development Mechanism, amendments to laws in various jurisdictions, and initial policy steps in developing countries. In conclusion, CCS inclusion in the CDM is expected to accelerate regulatory framework establishment in developing countries.

1. CCS Legal and Regulatory Issues
CCS within the UNFCCC – what it all means today and
post-2012
Paul Curnow
Baker & McKenzie
COP 17 Durban
2 December 2011
Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used
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2. Presentation overview
1. CCS regulatory issues
2. Overview of regulatory trends
3. Overview of recent developments
4. Conclusions
2

3. CCS Regulatory Issues
3

4. Regulatory issues
4

5. Overview of Regulatory
Trends
5

6. Leaders in regulatory development
– There is no one template or single "best practice" for end-
to-end CCS regulation with even the most robust existing
frameworks having gaps.
– Australia, Canada, US and EU leaders in regulatory
development.
– CCS development is clearly linked to funding initiatives,
with more progress taking place in jurisdictions where
grants are available.
6

7. Staged approach to legislative and regulatory development
Research and Mapping Brazil, Indonesia, Malaysia, Mexico
Policy Development China, India, South Korea, South Africa
Australia (WA – general), Australia (NSW), EU
Drafting Legislation Member States
Primary Legislation / Australia (Vic, Qld, WA – Gorgon, SA), Canada
Amending Existing Law (Saskatchewan), Japan, US (Illinois, Texas)
Supporting Regulations Australia (Federal), Canada (Alberta), Norway
7

8. Integrated vs piecemeal
– Australian, Canadian and US States developing integrated
laws.
– Pressure of transposition in the EU has lead to:
– Combination of new and amendments to existing laws;
– Smaller MS to implement stand alone storage specific
laws with the intention of later amending existing laws to
regulate other project activities.
– Developing countries (China, South Korea and South
Africa) remain in early stages but steps taken to explore
potential legal frameworks.
8

9. Responsible agencies
– A number of different types of agencies driving
development.
Environment Energy Science &
Japan, US EPA, EU and Alberta, Technology
many Member States Saskatchewan,
Malaysia, Mexico China
Mining &
Petroleum Coal Combination
India South Africa
Australian States,
Brazil, Indonesia
9

10. Overview of Recent
Developments
10

11. International Developments
– COP decision at Cancun to include CCS projects in the
CDM subject to development of modalities and
procedures.
– Draft Modalities & Procedures for CCS in CDM Published
(8 November 2011)
– London Protocol work plan adopted with timelines to
conduct the review of 2007 Sequestration Guidelines – UK
leading correspondant.
– OSPAR Convention amended to allow storage in the
North Atlantic.
– Pledges from developing countries to undertake nationally
appropriate mitigation actions under the Cancun
Agreements and Copenhagen Accord.
11

12. European Union
– Obligation on MS to transpose
CCS Directive by 25 June
2011.
– Resulted in political decisions
regarding whether to allow or
ban storage.
– 12 MS have notified the EC of
transposition.
– Many have only transposed
parts of Directive.
– Discussions on transposition
expected to continue.
12

13. US and Canada
– Alberta: integrated framework for CCS
permitting though the Alberta Carbon Capture
and Storage Statutes Amendment Act 2010
and the Regulatory Framework Assessment
process.
– Saskatchewan: updated a number of
existing laws, such as the Pipelines Act,
Crown Minerals Act and Oil and Gas
Conservation Act, to facilitate CCS as part of
the enhanced oil recovery process.
– Illinois: adopted project specific legislation
for the FutureGen project in the form of the
Clean Coal FutureGen for Illinios Act 2011.
13

14. Australia
– Amendments to Federal
legislation and new regulations
regarding offshore CCS project
developments.
– Developments in facility
operational standards.
– WA and NSW preparing stand-
alone legislation for CCS – h/w
to be based on existing
petroleum exploration and
exploitation regimes.
– Introduction of proposed carbon
price mechanism. 14

15. Developing Countries
– Beginning to undertake CCS mapping.
– Considering policy and regulatory options.
– Actions compliment pledges to undertake nationally
appropriate mitigation actions under the Cancun
Agreements and Copenhagen Accord.
– South Africa is taking prepatory steps towards CCS policy
formulation.
– South Korea has prepared comprehensive national CCS
implementation plan and now working towards legal
framework.
15

16. Conclusions
16

17. Conclusions
– CCS inclusion in the CDM will provide added incentive to
accelerate the establishment of regulatory frameworks in
developing countries.
– Expect regulators to begin to consider ways to address
some of the challenges emerging with early integrated
CCS demonstration projects:
– Managing competing tenures;
– Avoiding monopolies for pipeline transport and storage;
– Converting EOR projects to storage projects;
– Barriers to transportation under international law; and
– Managing public perception and transparency of
process. 17

18. Thank you.
Paul Curnow
Partner
+61 2 8922 5173
Paul.curnow@bakermckenzie.com
Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used
in professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly,
reference to an “office” means an office of any such law firm.