From CO2 sources to sinks: Regulatory challenges for trans-boundary trade, shipment and storage

Abstract

Carbon Capture and Storage (CCS) technologies have been hailed as a solution to climate change with capacity not only to reduce atmospheric carbon di-oxide (CO2) but also to achieve net-zero emission by the mid-21st century. CO2 captured (either directly from the atmosphere or from large point sources), is compressed and transported to storage sites, either via pipelines or through shipping. Often, the CCS projects are deployed nationally where capture, transport and storage take place within the jurisdiction of one State. However, wide scale deployment of CCS projects is imperative for global matching of CO2 sources to sinks. To that end, the outreach of CCS technology needs to go beyond the developed world. Studies have indicated that developing countries have vast storage resource potential. Internationalization of CCS projects where CO2 is captured in one State and is then transported to another State for storage raises a number of challenges particularly in terms of trans-boundary transport and storage. This paper explores some of these challenges particularly in terms of international trade law, liability framework for shipping and storage and potential of insurance to act as a stop-gap arrangement until a regulatory regime is in place. It examines questions such as: whether CO2 and CCS technologies are environmental goods and services under trade law; are there any regulatory frameworks in place to ensure liability against long-term health and safety as well environmental risks, and; what role can insurance industry play in promoting global deployment of CCS projects?