Amendments made to the Federal Government's legislation for Carbon Capture and Storage (CCS) in offshore waters will provide crucial encouragement for CCS projects, leading climate change lawyer Anna Collyer said.
According to Collyer, of Allens Arthur and Robinson, senate amendments to the Offshore Petroleum Amendment (Greenhouse Gas Storage) Act 2008, which was passed last week, will encourage CCS projects by providing certainty on the critical issue of long-term liability.
“The Federal Government has departed from its long held position of remaining silent on long-term liability, leaving this to be determined according to common law principles,” she said.
“The Act now provides a potential 20 year sunset on a proponent’s liability in damages for authorised operations carried out under licence, subject to having met all of the closure obligations and the Minister forming a favourable view of any remaining risks associated with the stored carbon.
“This means that proponents are able to put an outside assessment on potential exposure from undertaking a CCS project, and this should assist with insurability of project risks.
“This increased certainty can be taken into account in making investment decisions to proceed with CCS project development.”
The Act represents the Federal Government’s acknowledgement in the Carbon Pollution Reduction Scheme that the successful commercialisation of transformational technologies is important to Australia as the world's largest coal exporter and fourth largest coal producer.
The Government acknowledges in particular that the early commercialisation of CCS is critical to meeting the target of a 60% reduction in emissions by 2050.