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

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 Secretary of State as licensing authority under section 18(2)(a) or section 18(2)(d) or both;

“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(1);

“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(2);

“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(3);

“financial security” includes—

“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—

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

“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—

(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);

“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);

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

“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”;

“substantial change”;

“waste”;

“water column”.

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 Department of Energy and Climate Change, and

(b)accompanied by a fee of £ 2,100.

(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 legislation implementing Article 14 of the ETS Directive;

(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 implementing Article 5 of Council Directive 85/337/EEC(6);

(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) The authority must forward to the European Commission—

(a)the permit application (within one month after receipt); and

(b)any other related material that the authority proposes to take into account in considering the application.

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 territories of the member States,

(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 member 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(7).

(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) If the authority is minded to grant a storage permit—

(a)the authority must forward a draft of the proposed permit to the European Commission, together with any material taken into consideration that has not already been provided under regulation 6(4); and

(b)the authority must before granting the permit consider any opinion on the draft that is issued under Article 10(1) of the Directive.

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.

(2) In 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;

(b)the names and addresses of all past and present licence holders, including the dates on which they became or ceased to be a licence holder;

(c)the names and addresses of all persons (past and present) organising or supervising activities under the licence before the storage permit is granted, including the dates on which they began or ceased to do so;

(d)the terms and conditions of the storage permit;

(e)the names and addresses of all past and present operators under the storage permit, including the dates on which they began or ceased to be the operator;

(f)any written opinion received from the Commission under Article 10(1) of the Directive, and any statement of the authority’s reasons for departing from that opinion under Article 10(2);

(g)any modifications of the terms and conditions of the licence or the storage permit (including the date on which the modification came into effect);

(h)where the licence has terminated or been surrendered, the date of such termination or surrender;

(i)where the storage permit has been revoked, the date of and reasons for such revocation.

(4) The particulars referred to in paragraph (2)(b) are—

(a)the reports, and any notifications, sent to the authority in accordance with the provisions of the storage permit;

(b)details of any directions given by the authority in respect of corrective measures or measures for the protection of human health, and of any such measures taken by the operator or by the authority;

(c)the current amount of the financial security maintained in accordance with the provisions of the storage permit;

(d)where the storage site has been closed—

(i)the date of closure;

(ii)maps and sections showing the spatial extent of the storage site and storage complex;

(iii)the post-closure plan.

(5) In addition, the Secretary of State may include on the register maintained under section 29(1)—

(a)any other information that the authority that granted the storage permit considers relevant for assessing whether the CO₂ will be completely and permanently contained in the storage site (but this is subject to section 29(2)), and

(b)an estimate by that authority of the total storage capacity of the storage site.

(6) In this regulation—

(a)“the authority” means any licensing authority within the meaning of section 18(2);

(b)“licence” means a licence granted by the authority under section 18(1); and

(c)“licence holder”, “operator” and “storage permit” are to be construed accordingly.

Powers and duties of the authority

Corrective measures

10.—(1) This regulation applies where—

(a)a significant irregularity or a leakage has been detected, and

(b)the licence under which the storage permit is granted is still in force,

but does not apply where the storage permit has been revoked.

(2) Without prejudice to the obligations of the operator under paragraph 6 of Schedule 2, or to the powers of the authority under section 24—

(a)the authority may direct the operator to take any corrective measures (and any measures for the protection of human health) that the authority, after consulting the operator, considers necessary; and

(b)if the operator fails to take the measures so directed, the authority must exercise its powers under paragraph (4).

(3) The measures directed to be taken under paragraph (2)(a) may be additional to, or different from, those set out in the corrective measures plan.

(4) Whether or not a direction has been given under paragraph (2) or under section 24—

(a)the authority may at any time take such measures itself (or arrange for another person to take them on the authority’s behalf); and

(b)the costs of doing so are to be paid by the operator.

(5) Section 24(5) to (8) applies to action taken under paragraph (4) as it applies to action taken under section 24(4).

Review, modification and revocation of storage permit

11.—(1) Where a notification is made under paragraph 4(1) of Schedule 2, the authority—

(a)may make such modifications to the storage permit as the authority considers appropriate, and

(b)must notify the operator of—

(i)the date on which any such modifications are to come into effect, and

(ii)the date on which the change in question may be implemented.

(2) However, where it appears to the authority that the matters so notified would amount to a substantial change, the authority must—

(a)make such modifications to the storage permit as the authority considers appropriate (and make a notification in accordance with paragraph (1)(b)), or

(b)notify the operator that the change may not be implemented.

(3) The authority must make a notification under paragraph (1)(b) or (2) on or before—

(a)the date (“the target date”) on which the operator proposes to implement a change notified under paragraph 4(1) of Schedule 2, or

(b)any later date the authority considers is required in order for it to make such a notification.

(4) The authority shall notify the operator of a later date pursuant to paragraph (3)(b)—

(a)no less than one week before the target date, or

(b)if one or more later dates have already been notified by the authority pursuant to this paragraph, no less than one week before the date last notified.

(5) This paragraph applies where the authority becomes aware of—

(a)any (or any risk of) leakages or significant irregularities;

(b)any breach of the terms or conditions of the storage permit; or

(c)any scientific finding or technological development which appears to have a bearing on the conduct of operations at the storage site.

(6) The authority must consider whether to modify or revoke the storage permit—

(a)where paragraph (5) applies, and

(b)in any event, on the date (“the review date”) falling on the fifth anniversary of the grant of the storage permit, and subsequently on every tenth anniversary of the review date.

(7) Following that consideration, the authority may—

(a)make such modifications to the storage permit as the authority considers appropriate, or

(b)if it decides that modification of the permit would be insufficient in the light of the matters referred to in paragraph (5), revoke the permit.

(8) Before making any revocation or modification under this regulation, the authority must consult the operator and any other holder of the licence.

Consequences of revocation of a storage permit

12.—(1) This regulation applies where the authority has revoked the storage permit under regulation 11(7).

(2) The authority must then either—

(a)close the storage site, or

(b)consider any application for a new licence (and, if such a licence is granted, for a new storage permit) in respect of the storage site.

(3) Following the procedure under paragraph (2)(b)—

(a)if no new storage permit is granted, the authority must close the storage site (but the existing licence continues in force);

(b)if a new storage permit is granted, the existing licence terminates on the date of that grant.

(4) Until the storage site is closed, or the new storage permit is granted, the authority is deemed to be the operator of the site for the purposes of the following obligations—

(a)in relation to the acceptance and injection of CO₂;

(b)in relation to monitoring;

(c)in relation to corrective measures;

(d)in relation to the surrender of allowances under legislation implementing the ETS Directive; and

(e)under legislation implementing Articles 5(1) and 6(1) of the Environmental Liability Directive.

(5) Where the storage site is closed under paragraph (2)(a) or (3)(a), the authority—

(a)is deemed to be the operator of the storage site for the purposes of the obligations referred to in paragraph (4)(b) to (e), and

(b)must ensure that the storage site is sealed and the injection facilities removed (but this is without prejudice to the obligations of any person under Part 4 of the Petroleum Act 1998(8)).

(6) The holder of the existing licence must pay to the authority any costs incurred in meeting the authority’s obligations under paragraph (4) or (5); and section 24(6) and (7) applies to the recovery of such costs as it applies to the recovery of costs under section 24(5).

(7) In this regulation, “existing licence” means the licence under which the revoked storage permit was granted.

Closure of storage site and post-closure period

Post-closure plan

13.—(1) Before applying for a storage permit, the licence-holder must draw up a proposed provisional post-closure plan that is—

(a)based on best practice, and

(b)in accordance with Annex II to the Directive.

(2) Before granting a storage permit, the authority must—

(a)approve that proposed plan, or

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

and the provisional post-closure plan is the plan as so approved or modified.

(3) The authority may—

(a)approve a proposed post-closure plan submitted to it for approval in accordance with paragraph 3(1) of Schedule 1, or

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

and the post-closure plan is the plan as so approved or modified.

(4) Where the authority is deemed to be the operator in accordance with regulation 12(5), the post-closure plan is the provisional post-closure plan with such modifications as the authority considers necessary.

Post-closure obligations

14.  The closure of the storage site is without prejudice to the obligations of the operator—

(a)under legislation implementing Articles 5 to 8 of the Environmental Liability Directive, or

(b)relating to the surrender of allowances under legislation implementing the ETS Directive.

Environmental Liability Directive

Environmental Damage (Prevention and Remediation) Regulations 2009

15.  In Schedule 2 to the Environmental Damage (Prevention and Remediation) Regulations 2009(9), after paragraph 10 insert—

“11.  The operation of storage sites pursuant to Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide.”.