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Prof. Martha Roggenkamp and Dr. Edwin Woerdman: ‘Legal uncertainties hinder investment in CO2 capture and storage’

25 November 2009

The EU has introduced a new instrument in its battle against climate change – the capture of CO2 so as to store it permanently underground. The recent European Directive on CO2 capture and storage has not removed all legal barriers and uncertainties, thus investment in this environmental technology is still only sporadic.

‘CO2 capture and storage is controlled by a surprisingly large number of international, European and national laws and regulations and that has resulted in various obstacles and uncertainties’, Martha Roggenkamp of the University of Groningen has discovered. Her colleague Edwin Woerdman: ‘For a company to satisfy its climate targets, it will be cheaper in years to come to buy CO2 emission rights than to capture CO2. The subsidies for CO2 capture and storage demonstration projects are significant, but the investment uncertainties are large and the grants are diametrically opposed to a market-oriented climate policy’.

Roggenkamp and Woerdman base their opinions on the results of a study conducted by fifteen researchers at the Groningen Centre of Energy Law, of which they are joint directors. This week a book edited by the two will appear, entitled Legal Design of Carbon Capture and Storage: Developments in the Netherlands from an International and EU Perspective. This book means that they are the first in Europe to provide an integrated legal analysis of the EU Directive on CO2 capture and storage that came into effect in April 2009.

CO2 storage in old gas fields

CO2 storage in the Netherlands will mainly take place in exhausted gas fields, for which a storage licence is needed. In order to realize CO2 storage, the gas field in question should not be closed down definitively. In addition, the holder of a storage licence would also prefer to use the existing facilities. The EU Guideline on CO2 capture and storage provides no clarity on this matter, however.

Third-party access to CO2 storage and pipelines

This EU Directive also determines that member states must take responsibility for third party access to underground storage locations and transport networks. How exactly they organize this access is up to them, however. In practice, member states can choose between access based on negotiation or regulated access. Variants of the two are also possible. This means that there is no level playing field within the EU. Further, it is not clear how the licence system will relate to the access regime. Will private parties be interested in requesting and holding a storage licence if they can also gain access to underground storage without one, and also therefore without the related responsibilities?

Responsibility for CO2 leakage

If CO2 leaks from a storage field, the administrator of that field is the responsible party. Only twenty years after the field closes can responsibility pass to the state, according to the EU Directive, and then only if there is sufficient proof that the CO2 has been permanently stored. However, member states are allowed to set the criteria for determining whether this is the case, which could lead to different norms within the EU. Furthermore, an administrator could still be faced with certain types of damages claims from third parties based on national law even after twenty years. Finally, companies must also pay an amount to the state before a CO2 storage field can be closed to compensate for possible leaks – which reduces the attractiveness of CO2 capture and storage.

A new EU Directive?

The EU Directive on CO2 capture and storage should be converted into national law in 2011 and must be evaluated after five years. Roggenkamp and Woerdman foresee a large number of different national regulations emerging, thus hindering the cross-border capture and storage of CO2. This problem, together with the problems outlined above, will certainly eventually be reason enough to amend the Directive.

Curriculum Vitae

Martha Roggenkamp is professor of Energy Law at the Faculty of Law of the University of Groningen, joint director of the Groningen Centre of Energy Law and Of Counsel attorney at Brinkhof Advocaten in Amsterdam. She is also the founder and chair of the Dutch Society for Energy Law. Roggenkamp studied Law in Groningen and gained her PhD in 1999 at Leiden University. Before her appointment in Groningen in 2005, she worked in Leiden as an energy law researcher. Her research fields include the legislation and regulations governing the liberalization of the Dutch and European energy markets.
Edwin Woerdman is Associate Professor of Law and Economics at the Faculty of Law of the University of Groningen and joint director of the Groningen Centre of Energy Law. He studied Political Science in Nijmegen, specialized in economic theory and was awarded a PhD in Groningen in 2002. Before being appointed at the University of Groningen in 2004 he worked as a postdoc at the University of Twente. His research interests include the economic consequences of legislation and regulation concerning CO2 emissions trading.

Note for the press

More information:
- Prof. Martha Roggenkamp, m.m.roggenkamp (tel. 050 – 363 33 88)
- Dr Edwin Woerdman, e.woerdman (tel. 050 – 363 57 36). Please use the mail. 
The research was conducted by the Groningen Centre of Energy Law (GCEL), which coordinates legal research into the energy sector by the Faculty of Law.
The authors of the book on CO2 capture and storage are: Anatole Boute, Jan Bouwman, Marcel Brus, Irene Burgers, Oscar Couwenberg, Kars de Graaf, Wilbert Grevers, Avelien Haan, Jan Jans, Dick Lubach, Lennart Luten, Ko de Ridder, Martha Roggenkamp, Hans Vedder, Mark Wissink and Edwin Woerdman. The book is published by Intersentia.

Last modified:12 March 2020 2.38 p.m.
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