The Storage of Carbon Dioxide (Licensing etc.) Regulations (Northern Ireland) 2015

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations form part of the implementation in Northern Ireland of Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide (OJ No L140, 5.6.2009, p. 114) (“the Directive”).

Part 1, Chapter 3, of the Energy Act 2008 (c.32, as amended by S.I. 2011/2453) (“the Act”) establishes a licensing regime for the storage of carbon dioxide. Section 17 of the Act prohibits the storage of carbon dioxide (with a view to its permanent disposal) except in accordance with a licence granted under section 18(1) of that Act. The Department of Enterprise, Trade and Investment (“the Department”) is the licensing authority for storage onshore Northern Ireland and within the internal waters of the United Kingdom adjacent to Northern Ireland. The Secretary of State is the licensing authority for storage in the territorial sea adjacent to Northern Ireland but the Department, as well as the Secretary of State, is also the licensing authority for storage in a place part of which is within Northern Ireland or its internal waters and the rest of which is in the territorial sea adjacent to Northern Ireland. These Regulations relate solely to licences granted by the Department and do not apply to the category of licence which authorises the exploration of areas generally. Permits for the operation of carbon dioxide storage sites are granted under section 18(1) licences.

These Regulations implement Article 2 (in part) and Articles 3 to 17 and 19 of the Directive concerning: (1) the granting of permits for the operation of carbon dioxide storage sites (and related exploration activities); (2) the obligations of the storage operator (for example in relation to monitoring, reporting and corrective measures) whilst storage activities are taking place; (3) the operator’s continuing obligations for a period after the closure of the storage site; and (4) the inspection of carbon dioxide storage complexes.

Regulation 2(3) and (4) provides definitions for terms used in the Regulations.

Regulation 3 prevents the licensing of carbon dioxide storage in the water column.

Regulation 4 sets out the requirements for applying for a licence under the Act. The application may be for a licence with, or without, an “appraisal term” (during which the holder will have the right to carry on exploration activities with a view to selecting a site for carbon dioxide storage). If an application is made for a licence without an appraisal term, reasons must be given in the application.

Regulation 5 limits the length of the appraisal term to the minimum necessary and identifies when the licence shall cease and determine.

Regulation 6 requires a licence to include the provisions set out in Schedule 1.

Regulation 7 sets out requirements for an application for a permit to store carbon dioxide.

Regulation 8 sets out conditions for the grant of a storage permit, and Regulation 9 sets out minimum requirements for the content of such permits. In particular, a storage permit must designate a single licence holder as the operator of the storage site, provide details of the storage site and surrounding complex, and of the operational requirements for injection and storage. Also to be included are the provisions set out in Schedule 2.

Regulation 10 enables the licensing authority to direct the operator to take corrective measures, in the event of a significant irregularity or leakage, and enables (or in some cases requires) the authority to take such measures itself and to recover reasonable costs from the operator. This is in addition to the operator’s obligations to take corrective measures under the storage permit, and to the authority’s powers under section 24 of the Act (which allows directions to be given following the breach of a licence). Such measures also include measures for the protection of human health.

Regulation 11 enables the licensing authority to modify or revoke the storage permit in certain circumstances. By regulation 11(1) such a modification may be made where a change is planned by the operator, and by regulation 11(2) a modification must be made where the change appears to the authority to be substantial; alternatively in such a case the authority may prohibit the change. (Such planned changes are required to be notified under paragraph 4 of Schedule 2). Regulation 11(5) and (6) set out circumstances in which the authority must consider whether to modify or revoke the permit. This duty arises where the authority receives certain information – for instance that permit conditions have been breached or that there have been leakages or significant irregularities – and in any event five years after the grant of the permit (and then every ten years).

Regulation 12 deals with the consequences of a storage permit being revoked. The licensing authority may either close the storage site immediately, or first consider applications for a new licence and a new storage permit in respect of the site. If a new storage permit is granted, the existing licence terminates and with it the previous operator’s obligation to meet the authority’s costs. In all other cases that obligation continues in respect of the store that is now closed, but the authority takes over responsibility for performing the post-closure obligations.

Before a site is closed, the definitive version of a “post-closure plan” must be approved by the authority under Regulation 13.

Regulation 14 deals with liabilities of the operator after the site has been closed. Its obligations to remedy environmental damage under the Environmental Liability Directive will continue, as will those to surrender allowances under the greenhouse gas emission trading scheme established by Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003. Such obligations continue until the licence is terminated, as does the obligation to maintain a financial security (see paragraph 7 of Schedule 2).

Regulations 15 to 17, provide for the routine inspection of carbon dioxide storage complexes and for additional inspections. Reports of the results of those inspections must be produced, provided to the operator and made available for public inspection. The licensing authority may appoint inspectors, whose powers are set out in Schedule 3.

Regulation 18 creates offences concerning the obstruction of inspectors, failure to comply with requirements imposed under the regulations and the provision of false information in connection with an investigation.

Schedule 1 contains provisions which must be included in any licence granted by the licensing authority. These are provisions concerning the circumstances in which the storage site is to be closed by the operator, the preparation of the post-closure plan and the liabilities of the operator after the site has been closed. Closure takes place either under the conditions laid down in the storage permit, or on application to the authority (paragraph 1). The proposed post-closure plan submitted by the operator to the authority for approval must be based on the provisional version that was approved when the storage permit was granted, updated as necessary (paragraph 2). The operator must continue to monitor the site, and to comply with its reporting and notification obligations and its obligations to take corrective measures (paragraph 3). The operator must seal the site and remove the injection facilities, where applicable, in accordance with its decommissioning obligations under Part 4 of the Petroleum Act 1998 (c. 17) (paragraph 3).

Schedule 2 contains provisions which must be included in any storage permit granted by the licensing authority. These are provisions concerning: the composition of the carbon dioxide streams that may be injected into the store, including the obligation of the operator to maintain a register of the quantities and properties of the streams injected (paragraph 1); the monitoring of the storage complex and injection facilities, including the drawing up and approval of a monitoring plan (paragraph 2); the submission of periodic reports on monitoring, injection, financial security, and any other information that the authority considers relevant, and the notification of leakages or significant irregularities (paragraph 3); the notification and implementation of changes concerning the operator or the operation of the storage site (paragraph 4); the review and modification or revocation of the permit (paragraph 5); the measures that are to be taken in the event of leakages or significant irregularities (paragraph 6); and the financial security that is to be maintained by the operator (paragraph 7).

Schedule 3 sets out the powers and duties of inspectors appointed under section 27 of the Act. An inspector has power to enter any premises which the inspector has reason to believe it is necessary to enter, and may be accompanied and take any necessary equipment or materials. The powers exercisable by an inspector on entering any premises are set out in paragraph 1 of the Schedule. The inspector must, if requested, exercise the power to dismantle any thing found on the premises or to subject it to any process or test in the presence of a person who at the time is present and has responsibilities in relation to the premises (paragraph 2). The inspector must also, before exercising the power to dismantle the thing or subject it to any process or test, consult with such persons having duties on the premises and such other persons as appear to the inspector appropriate for the purpose of ascertaining what dangers, if any, there may be in doing anything under the power (paragraph 3).