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Lessons from International Practices for the Development of CCS Legal & Regulatory Framework in China

Carbon Capture and Storage (CCS) is one of the most promising technologies to greatly reduce greenhouse gas emissions from stationary fossil fuel use. Governments around the world have been supporting CCS research, development, demonstration (RD&D) and commercialization. Authorities from countries, including the EU, Britain, Australia, the U.S. and Canada, have also been developing the legal and regulatory frameworks needed to address potential environmental and safety risks from CCS development. These countries have garnered a good deal of experience in exploring and establishing clear legal and regulatory frameworks, which can be beneficial to China’s efforts in this area. In the meantime, establishing a clear and thorough legal and regulatory framework will be essential for sound development of CCS in China. Learning from other countries can be the first step. This research summarizes legal and regulatory frameworks of countries that have already made progress in this respect, and raises specific suggestions for the early implementation of CCS projects and the improvement of the CCS legal and regulatory framework in China.

Executive Summary

Through a comparative and qualitative analysis, the working paper considers key issues of CCS legal and regulatory frameworks domestically and globally. This paper consists of four parts. The first part briefly introduces the latest development of CCS projects in China, and describes the challenges to developing the CCS legal and regulatory framework in this country. The second part examines the legal and regulatory experiences in the EU, Britain, Australia, the U.S. and Canada, and identifies four key regulatory issues: the path of developing regulatory framework on CCS; the conflicts of rights for CCS projects; the permitting process and information disclosure; and liability during the post-closure period. The third section discusses lessons learned from international experience that China can apply to establish its own framework. The third section offers the following recommendations: 1) to select different legal approaches based on different regulatory stages of CCS; 2) to deal with rights conflicts by applying principles of affirming rights, setting up a requirement to reach agreement with other rights holders as an anterior procedure and seeking civil mediation; 3) to integrate regulatory components for the full life cycle of a CCS project, and to define the CCS project permitting process and information disclosure policy; and 4) to establish procedural rules of post-closure period, including how to address liability issues. The last part puts forward specific suggestions for multiple stakeholders--law/policy makers, regulators, project operators and the public. CCS is still a technology with a degree of uncertainty, which means the legal and regulatory framework targeting CCS will continue to evolve. To this end, it deserves more in-depth research in the coming decades.

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