EU Directive on the Geological Storage of Carbon Dioxide ('CCS Directive')
European Commission Guidance Documents
Like many pieces of primary legislation, the EU CCS Directive (2009/31/EC) includes some provisions or general requirements which would be difficult to implement without further interpretation. In some cases, this is deliberate, in order to leave the Member States a measure of discretion about the best way to fulfil the aims and requirements of the Directive. In others, however, provisions are written in a way that needs further detail to help Member States implement them and to achieve coherent implementation throughout the EU.
In that context, several articles in the Directive provide for the publication of guidelines by the European Commission to clarify the options available. In June 2010, the Commission circulated drafts of four guidance documents, inviting comments from Member State experts and stakeholders, including industry, NGOs and academic institutions. The subjects covered were:
CO2 Storage Life Cycle Risk Management Framework
Site Characterisation, CO2 Stream Composition, Monitoring and Corrective Measures
Criteria for Transfer of Responsibility to the Competent Authority
Article 19 Financial Security and Article 20 Financial Contribution
While the overall initiative was welcomed, responses to the drafts proposed changes to aspects of the guidance, and serious concern was expressed about the contents of document 4, in particular. In response to the latter, the Commission produced a Summary Note (GD4 'Article 19 Financial Security and Article 20 Financial Mechanism') during the winter of 2010. This attempted to reassure industry representatives and others that it was not recommending the use of a worst case scenario for determining the amount of financial security that would be required. The Note also, however, rebutted some of the proposals for changing the guidance (narrowing the scope of obligations covered and providing wider defences to liability), indicating that they were not compatible with the terms of the Directive.
Following amendments in response to the submissions, the Commission published final versions of Guidance Documents 1-4 on 31 March 2011. Each document includes a proviso that the guidance it contains does not represent an official position of the European Commission, nor is it legally binding. Member States still have wide discretion on how they transpose the Directive into national law, with final judgments concerning interpretation left to the European Court of Justice.
Nevertheless, these documents contain some passages that look like firm recommendations. They are also important for two other reasons: they give a valuable insight into the thinking of EU policymakers and into interpretations that could be given to key elements of the EU CCS regime; and they are being used as reference documents by policymakers in other jurisdictions, in the development of CCS regulations.
Amongst other steps to help with implementation of the Directive, the European Commission has also established an information exchange between the competent authorities in the different countries and is taking steps to st up a scientific panel to help it review draft storage permits and draft decisions on transfer of responsibility.
What follows is a review of Guidance Documents 3 and 4, relating to transfer of responsibility and financial security/financial mechanism, both issues critical to the liability aspects of the EU regime.