These are only given to applications that already have a greenhouse gas assessment permit or a petroleum license Obtain a greenhouse gas injection license.These permits are typically granted through a competitive tender process Obtain a greenhouse gas assessment permit to explore for geologic formations to store greenhouse gases.There are three main statutory requirements for getting CCS projects approved and operational under the Offshore Act: The Commonwealth regulates CCS in the Commonwealth marine area under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth), also called the Offshore Act. State CCS-specific legislation applies onshore and offshore within their respective jurisdictions. Commonwealth CCS legislation only applies to offshore areas that are beyond state jurisdictions, which generally extend three miles offshore. The Commonwealth and some states have established CCS-specific regulations. It is important to acknowledge that CCS remains controversial in Australia, and as a result there may be resistance to legislative efforts called for in the "Statement." Nevertheless, the industry push for CCS as a means to reduce greenhouse gas emissions seems likely to continue for the foreseeable future. The "statement" also commits the government to providing AUD 50 million in research for R&D and for amending legislation to ensure CCS is eligible for support from the Emissions Reduction Fund, the Australian Renewable Energy Agency and the Clean Energy Finance Corporation (all three of these groups are already authorized to provide funding for other Commonwealth climate change objectives).Ī number of energy companies have announced that they are interested in CCS, and the Victorian government has continued work on its proposed CarbonNet CCS project. It proposes a "stretch goal" of reducing the combined cost of compression, transport and hub storage (this does not include capture processes) to AUD 20 per tonne of carbon dioxide equivalent. The "Statement" emphasizes the importance of CCS in sequestering greenhouse gas emissions generated in natural gas processing and hard-to-abate industries (such as steel and aluminum manufacturing). ![]() In September 2020, the Commonwealth published its "First Low Emissions Technology Statement-2020," a proposed greenhouse gas emissions reduction strategy that gives CCS a prominent role. Policy support for CCS is gaining momentum. And it includes a brief section on the outlook for CCS M&A, which we believe will accelerate in coming years. The report has a section on Australian regulations affecting CCS, which covers CCS-specific rules and relevant environmental and other protections in the country. To that end, this report has a section on US incentives for CCS, which zooms in on the 45Q tax credit, and a section on federal environmental and other protections in the US. Our objective is to help companies understand the CCS landscape so they can pursue the best possible course to meet climate change mitigation goals and finance and properly structure CCS projects. Companies will have to navigate a complex network of state and federal protections in both of these countries, and understanding the often complex regulatory context is critical for companies pursuing CCS. The US currently has no CCS-specific environmental laws- but Australia does, especially at the state level. These include protections for habitat and species, drinking water, historic and cultural sites, and other areas. Protections: Governments will ensure compliance with environmental and other protections as companies pursue CCS.In addition, several US states offer state tax incentives for carbon capture projects. It would also increase R&D funding for CCS technologies and provide federal financing for carbon dioxide transport infrastructure. President Biden's climate plan would further enhance the 45Q tax credit and provide other financial incentives for CCS. In a recently enacted bill, these tax incentives were further extended to potentially allow projects that begin construction before 2026 to be eligible for tax credits. At the federal level in the US, this is currently done through a tax credit-detailed in Section 45Q of the Internal Revenue Code of 1986, as amended-that specifically targets CCS. Incentives: Governments may establish mechanisms to encourage adoption of CCS strategies.We see two main ways that authorities will shape the CCS landscape, often acting as catalysts to speed implementation. This report looks at where we are in the journey toward implementing carbon capture and storage (CCS) technologies, with a focus on how laws and regulations in the US and Australia affect CCS adoption.
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