Cabinet adopts CCS act

The German government today adopted the draft act on the demonstration and application of technologies for the capture, transport and permanent storage of carbon dioxide (CO2).

This has created the prerequisite for CCS testing projects in Germany to receive EU support.

Agreement was reached on the contentious issue of options for influence on the part of individual Federal States (Länder) regarding demonstration storage. In a technical assessment process the Länder can designate areas in which CO2 storage is permissible and in which it is not. The draft act thus takes due account of the different regional circumstances and contributes to increasing acceptance of CCS.

Federal Environment Minister Norbert Röttgen noted: "I am very pleased that a solution has been found that considers the different interests of the Länder. The possibility for testing CCS technology enables Germany to make use of an internationally recognised climate protection option which can also have major economic significance as an export product. The draft act allows testing in line with the highest environmental standards and with broad public participation as a prerequisite. A decision on large-scale application will only be taken if the testing phase reveals that CCS technology is safe."

CCS testing offers major prospects for climate protection, especially low-carbon industrial production. This is particularly significant for Germany as an industrial location since steelworks and chemical plants will not be able to operate without emitting at least some CO2, even in the long term. Irrespective of the accelerated transformation in energy systems and the accelerated increase in energy efficiency and expansion of renewable energies, coal-fired power plants will continue to be part of electricity production in Germany and worldwide in the medium to long term. CCS can contribute to reducing emissions from these plants. It can also be used to reduce greenhouse gases from the use of biomass.

CCS is a contentious issue in Germany. Nevertheless it is important to facilitate testing where desired. Demonstration projects in these areas can determine whether CCS can actually achieve the hoped-for contribution to climate protection, guarantees the necessary safety and proves to be affordable. However, there will not be testing or introduction of CCS technology against public wishes.

The German government has therefore decided on a step-by-step process. In the area of CO2 storage the draft act initially only regulates testing and demonstration. Broad public participation is required for the licensing of demonstration storage facilities. By doing this the German government ensures that the special features of this new technology and public concerns are given due consideration. A decision on a large-scale introduction of CCS will only be taken once there is sufficient proof of storage safety. The act will be thoroughly evaluated in 2017. To this end, the Government will prepare a report for the German Bundestag. The CCS process will only continue if the findings are positive.

The key elements of the draft act include:

• Restriction of storage to demonstration purposes: Storage facilities may only be licensed if the application for the license is filed by the end of 2016 and the annual storage volume per facility does not exceed 3 million tonnes, and the overall volume nationwide does not exceed 8 million tonnes of CO2 per year.
• Licensing of demonstration storage facilities: This requires prior investigation and a plan approval procedure with an environmental impact assessment. The highest possible precautionary standard will apply. Precautionary measures must be taken against negative impacts on human beings and the environment in line with the state of the art in science and technology.
• Protecting other uses: Other uses of the underground, e.g. geothermal energy and energy storage, will be given adequate protection. This ensures that CCS does not have a detrimental effect on other uses of the underground.
• Transfer of liability: One prerequisite for the transfer of liability prescribed by European law is proof of long-term safety to be provided by the operator. This ensures that the state does not have to take over unsafe storage facilities with unresolved risks.
• Financial security: The operator must provide financial security for the entire cycle (from the investigation to the transfer of liability). For the period after the transfer the operator must set aside funds for aftercare from the first tonne stored. This ensures that sufficient funds are available after liability has been transferred to continue monitoring storage and to tackle potential risks.
• Further regulations: The act also regulates the establishment and operation of carbon dioxide pipelines on the basis of energy industry law and capture facilities on the basis of federal immission control law. Additionally, all CCS facilities will be subject to emissions trading law.

The draft CCS act will form a legal framework for testing and demonstrating carbon storage that ensures planning and investment security. The restriction to testing and demonstrating permanent storage, the application of the highest environmental and safety standards and effective financial security ensure that the launch of this technology is regulated in a gradual, risk-aware way and with an open outcome. The goal is to implement at least one of up to twelve demonstration projects planned EU-wide on this legal basis.

The parliamentary procedure for the draft act is now being initiated with the goal of entry into force of the act in autumn this year.