Review of the legal and regulatory framework for CO2 shipping as part of carbon capture and storage in the United Kingdom

Abstract

Non-pipeline transportation (NPT) of carbon dioxide (CO2) can play an important role in upscaling Carbon Capture and Storage (CCS) in the United Kingdom (UK) and meeting His Majesty’s Government’s (HMG) Net Zero objectives. Given the mismatch of industrial clusters and carbon sink locations in the UK, Transport & Storage (T&S) networks need to be able to accept CO2 from dispersed sites where no pipeline networks are in place. This includes CO2 transport by ship, road or rail. Additionally, there are opportunities for the UK to provide geostorage services in the North and Irish Seas for other European Union (EU) countries who have limited storage capacity, taking advantage of the established industrial infrastructure already in place through the gas network and the extensive experience of the oil and gas sector. Following the cancellation of two major CCS funding competitions in 2011 and 2015 due to a lack of understanding of commercial risks and costs, HMG has been developing a framework for the economic regulation of CO2 T&S networks to ensure the continuity of T&S services in support of CCS in the UK.The Energy Bill is envisaged to deliver this framework which will allow T&S operators to receive revenues from their investments into T&S networks. However, it only applies to transportation by pipelines for geological storage operations. HMG is now considering whether NPT should be accommodated into the T&S business model. Particularly, it is seeking to achieve a better understanding of the role which NPT services could play in the UK’s CCS plans, of the likely levels of competition between different modalities of transport in the provision of these services, and of the potential corresponding implications for economic licencing.

This report adds to existing literature comparing the modalities of transporting CO2 as part of CCS by examining the public law aspects of the regulatory and liability regimes governing the transport of CO2 from port to port, taking the Solent Industrial cluster as an example. Relying on the assumption that the CO2 shipping chain, including port infrastructure, is expected to be owned and operated by one entity through a joint venture, the report underlines the range of duties incumbent upon CO2 shipping stakeholders and the role and remit of competent authorities in enforcing these requirements, and to propose action to simplify what is a highly complex landscape to navigate. Moreover, it provides an updated overview on recent developments surrounding offshore CO2 storage, which could bear indirect consequences on decisions to upscale CO2 shipping as a modality of transportation to support CCS.

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Identifiers

ORCID for Wassim Dbouk: orcid.org/0009-0003-7583-2717

ORCID for Damon Teagle: orcid.org/0000-0002-4416-8409

ORCID for Alexandros Ntovas: orcid.org/0000-0001-5310-7117

ORCID for Stephen Turnock: orcid.org/0000-0001-6288-0400

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