report on the implications of the developing framework regulations for ccs for ucg-ccs opportunities

8/18/2019 Report on the Implications of the Developing Framework Regulations for Ccs for Ucg-ccs Opportunities

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EUROPEAN COMMISSION

Directorate-General for Research

Directorate K - Energy

_________________________________________________________________________________________

UCG&CO2 STORAGE ProjectFunded under the Research Program of the RFCS, Coal RTD

Grant Agreement No. RFCR-CT-2010-00003

R EPORT ON THE IMPLICATIONS OF THE

DEVELOPING FRAMEWORK REGULATIONS FOR

CCS FOR UCG-CCS OPPORTUNITIES

(Deliverable D7.2, Task 7.2)

Beneficiary(s) responsible for the Deliverable/MS: GFZ,

Overgas Inc. AD,

UCG Engineering Ltd,

Authors: Prof. A. Angelov, Overgas Inc. AD

Dr. Michael Green, UCG Engineering Ltd.


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UCG&CO2 STORAGE Project

Funded under the Research Program of the RFCS, Coal RTD


Report on the implications of the developing Framework Regulations

for CCS for UCG-CCS opportunities

(Deliverable 7.2)

TABLE OF CONTENTS

1. Introduction

2. UCG Regulations Worldwide

2.1.

Mining Licenses and Environmental Approval

3. European Regulations

3.1. Main international regulations with relevance for CCS

3.2. Overview of CCS regulations in Europe

3.3. Requirements for CO2 storage

3.4. Water Directives

3.5. Pollution control regulations

3.6. Current and Future Requirements for CCS Projects

4. Bulgaria DCD Application of UCG-CCS

4.1.

Mining regulations

3.1. Ground Water Requirements

3.2. Air Emissions

3.3. Interpretation of EU Directives on CCS

3.4. Public Perception issues in Bulgaria to CCS

5. Steps to follow by a potential Bulgarian UCG-CCS project under the existing

regulations5.1.

A licence for prospecting and exploration of mineral resources

5.2.

Granting a concessions set against an eventual UCG project

5.3.

Administrative environmental procedures

5.4.

Water use permitting

5.5.

Wastewater discharge permitting

5.6. Waste-related operations management programme

5.7. Issuing permits for greenhouse gases (GHG permits) and monitoring

5.8. European pollutant release and transfer register

5.9. Mining waste management plan

6. Conclusions

7. References

LIST OF FIGURES

Figure 1: UCG Activity Worldwide (courtesy of UCG Association)

Figure 2: Scheme of the EIA procedure for investment proposals


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(Deliverable 7.2)

R EPORT ON THE IMPLICATIONS OF THE DEVELOPING

FRAMEWORK REGULATIONS FOR CCS FOR UCG-CCS

OPPORTUNITIES 1. INTRODUCTION

Carbon capture and storage (CCS) is a crucial part of worldwide efforts to limit global

warming by reducing greenhouse-gas emissions. The broad deployment of low-carbon energy

technologies could reduce projected 2050 emissions to half 2005 levels – and that CCS could

contribute about one-fifth of those reductions. Reaching that goal, however, would require

around 100 CCS projects to be implemented by 2020 and over 3000 by 2050. CCS

regulations need to manage the risks and liabilities of CCS, distinguishing between risks that

should be assumed by the operator, those that can be mitigated through regulation, and thosethat can be transferred. However, risk and liability are not the only drivers for CCS

regulations. Issues related to competition, climate regime commitments, tax policy, financial

responsibility, property rights and international treaties will also shape the CCS regulatory

framework.

The “UCG and CO2 Storage” project is of significant interest as an effective and long-

term solution to Bulgarian energy demands in compliance with the environmental

requirements that may apply during the implementation of such technologies. The proposed

UCG method has significant environmental and technological advantages over traditional coal

mining. In fact, the traditional extraction of coals is inapplicable in deeply buried coal seams,

and even in shallow layers mining can create unavoidable disorders of the landscape,

substantial amounts of overburden, host rocks and accumulation of other solid wastes. There

are also preconditions to protect the hydrogeological regime, surface and drainage

wastewaters generation, emission of greenhouse gases, sulfur and nitrogen oxides and other

negative environmental effects.

The combination of underground coal gasification with carbon dioxide capture and

storage is one of the most innovative methods to reduce greenhouse gas emissions. Certainly

for the realization of such a technology it is therefore necessary to evaluate the particular

environmental risk in each case.

In the case of Dobrudja coal deposit, one cannot talk at this stage about specific

environmental risk because the project objectives do not set tasks to implement a particular

technology, but rather to make an assessment of deposits of coals appropriate for gasification

by this method and to establish the most suitable areas for its application.

The main environmental risks of this technology are quite specific and they are related

to varying environmental conditions in the gasification area - high temperature and pressure,

forming a high temperature gradient and the zone of stress before and after the impact. These

risks can be defined for the unique geological and hydrogeological conditions of each field.


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(Deliverable 7.2)

In general the risks of pollution are well known in world practice and consist of

pollution of the groundwater in the upper aquifers, the risk of uncontrolled migration of the

obtained Syngas, as well as the stored CO2 in aquifers and/or atmosphere, risk of provoking

seismic activity and more. These environmental risks are described in detail in WP6 of the

project, there is a reference to the data for hydrogeological and geological characteristics ofthe deposit in WP4.

Specifically, the data indicate location of coal seams at depths at about 1,200 m in areas

with relatively low permeability and poor filtration properties and significant coal seams

diffusion in the deposit. The width of the carbonate layer over the coal layers range from

several tens to several hundreds of meters below the aquifer, which is also characterized by

significant width. In WP4, data is presented on the chemical composition of coal, their

calorific value, sulfur content, moisture content etc., also within certain limits. The variation

of all these parameters is contained in a 3D model of the field developed under WP3. Based

on this model it is possible to do simulation studies concerning the implementation and future

technological developments and major parameters related to the possible environmental

impact.

It is clear from the data that it is possible to realize the technology at an appropriate site

within the area, by implementation of the best available European and international practices

and observing all environmental requirements listed in European and national legislation,

reflected in the EIA report and the IPPC permit.

The issue of environmental legislation concerning the UCG-CCS technology can be

related to a series of regulations including - Water Framework Directive (2000/60/EC), theGroundwater Directive (2006/118/EC) and the Directive on mining waste management

(2006/21/EC) and Directive 2008/50/EC relating to air quality, and Directives 85/337/EEC

and 97/11/EC for EIA procedures.

In addition, the Directive - 2009/31/EC concerning the storage of carbon dioxide in

geological formations as well as the European Commission Decision of 02.10.2011 of

introduction of a questionnaire for the initial report on implementation of Directive

2009/31/EC are applicable.


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(Deliverable 7.2)

2. UCG REGULATIONS WORLDWIDE

UCG is under consideration or active development in most coal producing countries (cf.

Figure 1) but very few have firm UCG regulations or guidance in place. Jurisdictions have

tended to consider any application for a UCG project in isolation, and are adapting existing

legislation to the new process. Project developers have found that the uncertainties of the

permitting process are a major cause of financial risk and investor decision for UCG project.

Figure 1: UCG Activity Worldwide (courtesy of UCG Association)

The regulatory process, as discussed in the sections for Europe (Chapter 3: European

Regulations), is a multi-layered process involving mineral rights, environmental control, the

regulation of industrial plant and processes, and rules for the control of energy production and

utilisation. Often, the lead is given to one Government Department, typically mining, which

then obtains approval with the other regulatory parties.

2.1. Mining Licenses and Environmental Approval

Mining Law has generally been the basis for the licensing process, although some have

considered using the petroleum licensing option currently applied to coal bed methane and

natural gas production. Authorities are divided on whether to issue specific licenses for UCG

or rely on the existing mining license, suitably adapted. For countries, where UCG projects

are just at the feasibility stage, often no decision has been taken, but those with more

advanced UCG developments, like Australia and Canada, licensing for pilot and

demonstrations studies has been given with certain restrictions.


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(Deliverable 7.2)

The royalty issue for UCG has not been actively addressed to date, but where it has been

considered, the basis has generally been the energy content of the gas produced, which is then

equated to an equivalent tonnage of coal exploited.

Environmental Approval normally follows the local requirements for the approval of ground

water, air quality emissions, and those generally applied to surface plant e.g. noise, visual

impact, night working, lighting, and site restoration.

Public perception and public consultation vary from country to country, and is traditionally be

associated with the local, regional or national planning laws. Most countries require

consultation, local impact studies, and many will require approval by the communities.

United States

The United States associates mineral rights with the land owner, and generally requires no

separate licensing process to use the coal for UCG. The underground process, however, is

subject to the legislation of the Environmental Protection Agency (EPA) which has published

(EPA 1999) requirements for UCG wells. These prohibit injection of contaminants and call

for assessments of the likely effect of UCG on drinking water. States like Wyoming require

one year’s base monitoring of the proposed UCG site, as a condition of approval. The

regulatory process also distinguishes between pilot and commercial operation, and will

generally require a pilot test first. Other conditions include mine and reinstatement plans,

water well and storm permits, and an assessment of subsidence.

India

India has identified specific blocks for UCG, determined by the relevant Government and

State bodies. These blocks are subject to a bidding process, where operators are assessed for

their technical and financial competence, and a royalty payment is required. Furthermore,

each stage of the project, like exploration, pilot and expansion to commercial operation is

monitored and approved separately. At the time of writing, only one test project, in Gujarat

has advanced to the pilot stage.

Australia

All UCG field activity to date has been in the State of Queensland, although feasibility studies

in other areas have been considered. The Department of Environment and Resource

Management (DERM) in Queensland has restricted the piloting of UCG to three UCG

demonstration sites, one of which, Cougar, has been closed down on environmental grounds.

A government panel is now assessing the environmental results of the other two sites, namely

Chinchilla, and Bloodwood Creek, with a view to approving commercial operations, with

appropriate conditions, in the future. The process has repeatedly been delayed due partly to

the competing claims for resources between the coal seam gas industry and UCG interests.


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(Deliverable 7.2)

Canada

UCG, or ISCG as it is known in Canada, has largely focused on the Province of Alberta,

where all the current trials and commercial development has so far taken place. The process is

controlled by the Energy Resources Conservation Board (ERCB) which regulates the safe,responsible, and efficient development of Alberta’s oil, natural gas, coal and oil sands

resources.

Alberta Energy manages the commercial development of all non-renewable resources, grants

rights to explore and develop energy resources, and monitors royalty systems. Currently, in-

situ coal schemes are required to have coal, petroleum and natural gas rights for the targeted

coal seams, although this is being reviewed.

The ERCB recently changed the Coal Conservation Act, the Oil and Gas Conservation Act,

and the Pipeline Act, to include provisions for experimental or commercial ISCG and theirmeasurement and reporting requirements.

Safety approval of ISCG in Alberta is a three step process for:

• Production and injection wells

• Gas processing facilities

• Off lease pipelines

There are rigorous surveillance and enforcement procedures to ensure compliance with

regulations by teams of inspectors, including professional engineering and environmental

staff, monthly production reporting and quarterly and annual reports, presentations, and

meetings.

China

The approval process in China is not clearly stated, but those overseas companies who have

attempted Chinese UCG projects, have found legal ownership of the relevant coal license,

which must be a Chinese entity, sometimes difficult to establish. Project approval is given

subject to an extensive technical review by a central committee, and thereafter, all activitiesare closely monitored. In the past, UCG was only permitted for coal of a certain depth,

typically >1,000m, but this may vary between Provinces.

New Zealand

New Zealand Petroleum and Minerals is the agency within the Ministry of Economic

Development that regulates allocation of rights to petroleum, mineral and coal resources. It is


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(Deliverable 7.2)

complicated however, by complex patterns of coal ownership, and the State only regulates the

use of coal it owns. Land access rights need a separate agreement.

There is no specific regulatory regime for UCG in New Zealand but UCG can be carried out

in existing mining licences (Coal Mines Act 1979) under a variation to existing conditions,

which is currently being reviewed. Coal seam gas (CSG/CBM) is managed under the

petroleum regulations, and any conflicts arising between CSG and UCG are expected to be

resolved on a case by case basis.

Environmental regulation is managed under the Resource Management Act 1991. Local

government authorities require a district plan and they issue consents for all environmental

effects on land, air and water including potential environmental impacts of UCG. The act is

also the vehicle for public participation in the consenting process.

Conclusions

Countries outside the European Union with established UCG programmes are well advanced

in the development of UCG regulatory regimes. They have generally used the mining laws for

licensing of the resource, and existing Regulation to cover the environmental impact

assessment and approval.

Currently Alberta, Canada has been the most proactive and transparent in UCG regulation,

with a well established approval and compliance programme. Two pilot projects have been

approved under the process.

Queensland has approved pilot and demonstration projects under its licensing and

environmental legislation, and is currently assessing its requirements for commercial UCG

operation in Queensland.

Wyoming leads the United States in UCG project approval, and other States tend to follow

and use their approval procedures.

India, China, and South Africa are active at the pilot and demonstration stage and are using

the knowledge gained to evolve their approval procedures.

No country, inside or outside the European Union, has yet approved a fully commercial UCG project and further development of the legislation can be expected as experience from the

UCG demonstration scheme is made available.

3. EUROPEAN REGULATIONS

In summary, the CCS Directive is concerned with the safety of storing CO2

underground, and ensuring that the risk of leaks are minimal and fully understood.


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(Deliverable 7.2)

Directive 2009/31/EC lays down requirements for the lifetime of a CO2 storage site. It

covers measures for dealing with potential CO2 leakage, the need for storage site permits, and

the responsibility for storage sites once they are closed. Operators of CO2 storage will need to

apply to the competent Authorities in the Member State for the exploration permit, the storage

permit, and the application for closure and transfer to the Competent Authority (CA).

The storage permit requires:

•

Proof of technical competence,

• Characterisation of the storage site and storage complex

•

Specifications related to CO2 streams (total quantity to be injected and stored,

composition, injection rates and pressures),

• Description of preventive measures to prevent significant irregularities,

•

Monitoring plan for the storage complex and the injection facilities,

• Corrective measures plan for leakages or significant irregularities,

•

Provisional post closure plan,

• Proof of financial security.

The cycle of injection under the CCS Directive consists of 5 phases, each with its own

programme and milestone. The milestones by the CA are Exploration permit, storage permit,

operations, closure and transfer of responsibilities to CA. The whole process may take 50-70

years.

Coal is specifically identified as a permanent storage medium for CO2. The others are

EOR, hydrocarbon reservoirs and saline aquifers.

And at a high level, storage opportunities will need to satisfy three principle

requirements:

• Capacity – sufficient storage volume is available, or can be engineered.

• Integrity – confidence that the site is secure with no significant risk of leakage.

•

Injectivity – suitable reservoir properties exist allowing sustained injection at

industrial supply rates into the geological formations.

It is necessary to prove sites in a practical and technical sense, and not in theory.

Depending on the particular site, it could require seismic and well-drilling activities designed

specifically for CO2 storage site evaluation, including, potentially:

•

Acquisition and processing and interpretation of 2D or 3D seismic data;

• Drilling wells to acquire core, log and cutting samples to evaluate and characterise

reservoir and seal sequences, supported by laboratory analysis;

•

Injection tests with CO2 or water and testing pressure regimes in the subsurface.


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(Deliverable 7.2)

It is vital to show how CO2 will be trapped at a site. A prospectivity assessment can also

identify if a basin is likely to trap CO2 through either conventional structural or stratigraphic

traps, or through migration assisted storage mechanisms.

3.1. Main international regulations with relevance for CCS

In the last few years, amendments to allow CO2 injection and transboundary

transportation of CO2 have been made to two major marine treaties, known as the London

Protocol and the OSPAR Convention.

The London Convention, "Convention on the Prevention of Marine Pollution by

Dumping of Wastes and Other Matter 1972", protects the marine environment from human

activities. Its objective is to promote the effective control of all sources of marine pollution

and to take all practicable steps to prevent pollution of the sea by dumping of wastes and other

matter. It was amended in 2007 to allow CO2 storage under the seabed. Eighty-five Stateshave signed the Convention.

The OSPAR Convention is the current legal instrument guiding international

cooperation on the protection of the marine environment of the North East Atlantic. The work

is managed by the OSPAR Commission, made up of representatives of the Governments of 15

nations and the European Commission. It is a mechanism by which fifteen Governments of

Europe cooperate to protect the marine environment of the North East Atlantic. The objective

is to conserve marine ecosystems and safeguard human health in the North East Atlantic by

preventing and eliminating pollution; by protecting the marine environment from the adverse

effects of human activities; and by contributing to sustainable use of the seas.

Initially, OSPAR and The London Convention did not allow CO2 storage, but these

regulations were amended in 2007 to permit CO2 storage under the seabed.

3.2. Overview of CCS regulations in Europe

At Community level, a number of legislative instruments are already in place to manage

some of the environmental risks of CCS, in particular regarding capture and transport of CO2,

and they should be used where possible. The European Commission has published a series of

guidance documents on some of the more technically demanding aspects of the regime. These

documents cover: the CO2 storage life cycle risk management framework; characterisation ofthe storage complex, CO2 stream composition, monitoring and corrective measures; criteria

for transfer of responsibility to the competent authority; and financial security and financial

mechanisms.

EC Directive on CCS 2009/31/EC. The EU Directive on the geological storage of

carbon dioxide entered into force in June 2009. It forms part of the EU's Climate Change

Package, developed in the context of the recognised need for developed nations to achieve

greenhouse gas emission reductions of 30% by 2020 and 60-80% by 2050. The Directive

applies to geological storage of CO2 within the territory of the Member States, their exclusive

economic zones and on their continental shelves, thus envisaging storage both onshore and


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(Deliverable 7.2)

offshore. Member States retain the right not to allow storage in their territories, in whole or in

part, although those that choose to permit storage must carry out an assessment of their

region's potential CO2 storage capacity. Another aim of the Directive is the safe storage of

CO2, meaning the permanent containment of CO2 to prevent and eliminate the possible

negative effects on environment and human health.

While the Directive focuses primarily on the storage aspect of CCS, it does briefly

address the capture and transport elements. Importantly, CCS is removed from the scope of

EU waste and water laws to provide certainty as to the legality of CCS activities. Through

amendments to the EU's Emission Trading Scheme (ETS), however, efforts have been made

to incentivise investment in CCS.

The capture process of CCS will primarily be regulated through incorporation within the

EU's Integrated Pollution Prevention and Control (IPPC) Directive. The CCS Directive also

lays down, through an amendment to the Large Combustion Plant (LCP) Directive, a 'Carbon

Capture Readiness' (CCR) requirement.

Transport of CO2 from capture facilities to storage sites is most likely to be through

pipeline networks. The Directive addresses the transport aspect of CCS with few provisions,

relying principally on national pipeline regulations, and property and planning laws, together

with existing European legislation. Transport of CO2 via pipeline will be subject to an EIA, as

above with regard to capture facilities. While the Directive does not require a permit for

pipeline transport of CO2, any assessment carried out pursuant to the EIA Directive will need

to be taken into account in the respective consenting procedures within the Member States.

Member States must ensure that potential users can obtain fair and open access totransport and storage facilities, on the basis of transparent and non-discriminatory criteria. In

doing this, they can take into account certain factors, such as the storage and transport

capacities that can reasonably be made available, the proportion of the Member State's CO2

reduction obligations that it intends to achieve through CCS, the need to refuse access on

grounds of technical incompatibility which cannot reasonably be overcome, and the need to

respect the reasonable needs of storage and transport owners and operators, and of all other

uses of the network.

Member States are obliged to implement dispute settlement arrangements for third party

access and the Directive lays down briefly conditions for cross-border disputes. Moregenerally, in cases involving transboundary transport or storage of CO2, the competent

authorities of the relevant Member States must act jointly to meet the requirements of the

Directive.

The European Commission enjoys enforcement powers through infringement

procedures against Member States failing to comply with their obligation to implement EU

law. The Commission has discretion as to when, and whether to start the procedure, but the

flexibility of negotiation is normally preferred over the burden of a formal infringement

procedure. However, when no national legislation is received by the deadline required, the

standard procedure is for the Commission to automatically initiate the first stage of


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(Deliverable 7.2)

infringements proceedings – the sending of a formal letter to the Member State. Often the

procedure needs go no further since this alone puts sufficient pressure on the Member State

concerned. This has indeed been the case with the CCS directive. As of July 2011, the

Commission had already initiated 25 infringement procedures for failure to communicate

national transposition measures. Only Spain was considered to have fully transposed andRomania required a more careful assessment (and eventually was added to the list). Some

cases have been already closed (Denmark, the Netherlands, Italy, France, Lithuania, Malta

and Slovenia), but more cases are still open and under assessment, which is less encouraging.

Bulgaria has successfully transposed the requirements of the Directive 2009/31/EC to the end

of 2011.

3.3. Requirements for CO2 storage

The EC Directive on CCS 2009/31/EC requires that injection and storage of CO2 may

only take place in sites that are suitable, meaning that storage in a site must not pose any risk

of leakage or damage to the environment and human health. This is determined through a

detailed process of 'site characterisation' outlined in Annex I, where data is gathered in order

to create a computerised three-dimensional model of the storage area, which is then used to

predict and model the way in which CO2 will behave in the formation. A distinction is drawn

between the storage site (a defined space within a geological formation into which CO2 is to

be injected, together with its associated surface and injection facilities) and the storage

complex (the storage site and the surrounding geological features which can affect storage

integrity). Site characterisation will involve a consideration of the entire complex, and the

Directive recognises that more invasive activities (such as drilling into the subsurface) may be

necessary to obtain sufficient information. As such, this process of exploration will beallowed, but it must not be carried out without an exploration permit. Member States must

ensure that these permits are open to all those with the necessary expertise, and are granted on

the basis of objective, published and non-discriminatory criteria.

Once site characterisation, perhaps accompanied by exploration, has demonstrated the

site's suitability, then a potential operator may apply for a storage permit. Holders of

exploration permits are afforded priority in applying for a storage permit in order to provide

the necessary commercial incentives. As with exploration, Member States are to ensure that

no storage site is operated without a permit. The Directive provides minimum criteria for the

contents of a permit application, and for the conditions and contents of any permits eventuallygranted. Importantly, the Directive requires all storage sites to be assessed in accordance with

the EIA Directive. The results of this will need to be submitted as part of the permit

application.

Operators must be able to demonstrate that they are technically competent and reliable

to operate storage sites, including that necessary technical training and development of staff

has been provided. Additionally, operators are required to show that they are financially

sound and provide financial security to cover the costs relating to the operation and post-

closure periods of the storage site until responsibility is transferred. This financial security can


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(Deliverable 7.2)

be drawn upon by the competent authority should the operator default on its obligations under

the Directive. Proof that this can be established must be submitted with the permit application.

It must be valid and effective before injection commences and must be maintained thereafter.

A major part of the risk management scheme adopted under the Directive is the process

of developing a series of plans concerning the operation and closure of the site. In these plans,

operators are to outline the proposed method of monitoring the site, details of the corrective

measures to be taken in the case of CO2 leakage, risk of leakage or risk to health or the

environment, and the proposed course of action for the post-closure period. Approved

versions of these plans form part of the final granted permit. The monitoring plan is to be

designed in accordance with Annex II to the Directive, which in turn is linked to the site

characterisation methodology provided for in Annex I.

Storage permits are also to include details relating to the CO2 that is to be injected. This

includes the total quantity to be stored, its sources and transport methods, and the composition

of CO2 streams to be injected. The term 'CO2 streams' recognises the fact that there may be

incidental substances from the capture process and that substances may need to be injected

into the formation for the purposes of monitoring. The Directive will therefore allow such

substances to be injected, provided their concentration poses no risk to transport infrastructure

and the storage site or to the environment and human health. Nonetheless, a stream is to

consist 'overwhelmingly' of CO2, and must not contain waste or other matter which is added

for the purpose of disposal. Operators are required to carry out a risk assessment in respect of

the stream composition and maintain a register of the quantity, properties and composition of

streams injected.

Competent authorities are to submit each draft storage permit to the Commission, who

may give a non-binding opinion on it. The competent authority may depart from the opinion,

but must give reasons for its decision. This is to ensure consistency in the granting of storage

permits across the EU, as well as to promote public confidence in the storage permit regime.

Importantly, storage permits are 'living' documents, subject to mandatory periodic review

during the operational phase, and may be changed, updated or withdrawn in response both to

technological developments and to matters giving rise to concern about the operation of the

site and its integrity.

Once a storage permit has been granted, the operator may begin injection of CO 2 into

the storage site. This period of operation is characterised by a regime of monitoring, reporting

and inspection. These are the key methods by which problems with the storage site, namely,

significant irregularities or leakage, are to be identified and addressed.

As above, monitoring is carried out in accordance with the approved monitoring plan.

The Directive sets out the purposes of this monitoring: in essence, to detect any problems

affecting the storage integrity of the site and potential impacts on the surrounding

environment, including drinking water, human populations and users of the surrounding

biosphere. Operators are obliged to submit reports at least annually, based on the monitoring


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(Deliverable 7.2)

of the storage site, as well as details relating to CO2 stream acceptance, proof of continued

financial security and any other matters that the competent authority considers relevant.

Importantly, competent authorities must design a system of routine and non-routine

inspections for all storage complexes within the scope of the Directive. Routine inspections

must be carried out at least annually. The Directive provides a list of events/situations which

trigger a duty on the competent authority to carry out a non-routine inspection. A competent

authority must carry out an inspection of the site if, for example, it has been notified or made

aware of leakages or significant irregularities, and must investigate serious complaints related

to the environment or human health. Following every inspection, the competent authority is to

prepare a report on its findings, evaluating the operator's permit compliance and indicating

whether further action is necessary. This is to be made publicly available within two months

of the inspection.

Member States are also to lay down rules for, and implement, penalties for

infringements of national provisions adopted under the Directive. Those penalties must be

'effective, proportionate and dissuasive'.

3.4. Water Directives

Water Framework Directive (Directive 2000/60/EC) of the European Parliament and of

the Council of 23 October 2000 establishing a framework for Community action in the field

of water policy had to be amended to allow for injection of CO2 into saline aquifers for the

purposes of geological storage. Any such injection is subject to the provisions of Community

legislation on the protection of groundwater, and must be in accordance with Article 4(1)(b)

of Directive 2000/60/EC and with Directive 2006/118/EC of the European Parliament and ofthe Council of 12 December 2006 on the protection of groundwater against pollution and

deterioration

CO2 is not expressly included in the Annex VIII list of main pollutants. However, that

list is only indicative and CO2 could still be classified as a pollutant under the WFD. If so its

direct discharge into bodies of groundwater for storage would be prohibited.

With that in mind, the Directive on the geological storage of carbon dioxide

(2009/31/EC) (CCS Directive) provides an additional exception to the prohibition which

allows Member States to authorise injection of carbon dioxide streams for storage purposes

into geological formations which 'for natural reasons are permanently unsuitable for other purposes'. This must be done in accordance with the terms of the CCS Directive

The exception is also qualified by the provision (in the last paragraph of Article 11(3)(j))

that CO2 injection and storage does 'not compromise the achievement of the environmental

objectives established for that body of groundwater.'

Exemptions from the strictest WFD objectives that may be relevant to CCS activities are

as follows:

• Lower standards may be set where a body of water is so affected by human

activity that the achievement of the objectives would be infeasible or


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(Deliverable 7.2)

disproportionately expensive. In this case, the environmental and socioeconomic

needs served by the activity must not be achievable by other means, reasons must

be given for the derogation and the highest possible standard maintained. This may

apply to port areas from where CO2 would be shipped or piped and sites

previously developed for oil or gas extraction.

• Failure to achieve good groundwater status or prevent deterioration of a body of

groundwater may be allowed where it results from alterations in the level of bodies

of groundwater. Although potentially applicable to CCS activities, which could

displace groundwater in geologic acquifers, this provision is more pertinent to

measures regulating water supply and management for human use, so may not be

relevant to CO2 storage.

•

The marine scope of the WFD is 12 nautical miles from the coast for surface

waters only; hence it would not apply to sub-sea aquifers beyond that distance,

such as those proposed for CO2 storage in the North Sea.

Groundwater Directive (Directive 2006/118/EC)- As 'daughter' legislation of the Water

Framework Directive (WFD) (2000/60/EC), the Groundwater Directive strengthens and

builds on provisions contained within the WFD relating to groundwater. It complements the

earlier directive in aiming to 'to prevent the deterioration of the status of all bodies of

groundwater'. In particular, the Directive details the procedure for assessing groundwater

chemical status and provides criteria for identifying and preventing significant and sustained

upward trends in groundwater pollution. The Directive defines 'significant and sustained

upward trend' as 'any statistically and environmentally significant increase of concentration of

a pollutant, group of pollutants, or indicator of pollution in groundwater'.

While CCS activities would not seem to be primarily affected by provisions in the

Groundwater Directive, which are more directly concerned with nitrates and pesticides,

injection of CO2 streams could potentially be regulated under Article 6(1)(b), where Member

States decide that CO2 fell within the definition of 'hazardous substance'. However, Article

6(3)(a) of the Directive ensures that the exemptions given to particular activities in Article

11(3) (j) of the WFD also apply to the daughter provisions. This would include the

amendment exempting CCS activities made to the WFD by the Directive on the geological

storage of carbon dioxide (2009/31/EC) - CCS Directive.

3.5. Pollution control regulations

In the European Union, both member states and the European Commission are involved

in regulating CCS, with countries required to put in place measures that reflect EU-level

directives and regulations. In the case of CCS, this primarily means meeting the CCS

Directive, but the EU Emission Trading System (EU ETS) Directive also applies. The CCS

Directive had to be transposed into Member state law by June 2011. This process allowеd

each country to develop a CCS framework that takes into account its particular circumstances,

while ensuring that all member states share some core framework elements. When developing

a CCS legal and regulatory framework, it may be most easily regulated by modifying


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(Deliverable 7.2)

frameworks that are already in effect - jurisdictions of oil and gas production, which is similar

to some components of CCS.

The European Union, which has amended the EU Emission Trading System Directive to

fully include CCS from 2012, has also allocated the revenue from the sale of 300 million EU

ETS allowances to support CCS and novel renewable technologies - 12 CCS and innovative

renewable energy demonstration projects to start operating by the end of 2015, in the power

and industrial sectors. In the EU the emissions trading scheme (EU ETS) puts a price on CO 2

emissions, but at the moment the price of buying an emission allowance is cheaper than the

cost of building a coal or gas power plant with CCS. The EU will reduce the number of

emission allowances gradually in the years to come, and that will increase the price of

emission allowances. Eventually, the cost of emitting CO2 will be higher than the cost of

CCS, and when that happens, industry will start to build CCS projects.

Additional regulations might be required. When the EU endorsed the energy package in

2008, the possibility of including an Emission Performance Standard (EPS) that sets a ceiling

on CO2 emissions from power production was discussed. A suggestion was made to include

an EPS of 350 grams CO2 per kWh, which would have banned coal power plants without

CCS. However, the suggestion to include EPS in the EU energy package failed and a new

proposal of 450 g/KWH has been proposed, which would allow natural gas but require all

new coal plant to be equipped with CCS.

Liability for localised environmental damage under the Environmental liability

Directive is complemented by financial liability under the EU ETS for 'climate damage'.

Operators will be required to surrender purchased EU emissions allowances in respect of any

leaked CO2. It has been noted that the requirement to purchase allowances is not a penalty in

itself, and there is the potential for perverse incentives should the price of carbon allowances

fall below a level which would address any financial gain of non-compliance.

Civil liability for harm to individual human health such as personal injury (as opposed to

the duty to take measures to protect human health), together with private rights relating for

example to property damage, will also fall to be addressed outside the CCS Directive, though

in this case under existing national laws.

Member States are also to lay down rules for, and implement, penalties for

infringements of national provisions adopted under the Directive. Those penalties must be'effective, proportionate and dissuasive'.

The IPPC Directive 2008/1/EC of the European Parliament and of the Council of

15 January 2008 concerning integrated pollution prevention and control, which sets out the

main principles for the permitting and control of installations based on an integrated approach

and the application of best available techniques (BAT) which are the most effective

techniques to achieve a high level of environmental protection, taking into account the costs

and benefits. In essence, the IPPC Directive is about minimising pollution from various

industrial sources throughout the European Union. Operators of industrial installations

covered by Annex I of the IPPC Directive are required to obtain an environmental permit


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(Deliverable 7.2)

from the authorities in the EU countries. The IPPC Directive is suitable for regulating the

risks of CO2 capture to the environment and human health and, as a result, should be applied

to the capture of CO2 streams for the purposes of geological storage from installations

covered by that Directive. Combustion installations, except small ones, are covered by the

IPPC Directive. IPPC imposes a permitting regime on a range of specified industrialactivities, controlling the release of contaminants into air, water and land. As such, all

operators of capture installations will be required to obtain a IPPC permit, which will demand

the use of 'best available techniques' (BAT) for CO2 capture, impose clean-up requirements in

cases of unauthorised release and site closure, and involve important rights to public

participation. Operators will also be required to carry out an assessment of the likely

significant effects on the environment of any capture facilities in accordance with the

provisions of the Environmental Impact Assessment (EIA) Directive. Importantly, public

consultation will be required, and the assessment carried out must be taken into account when

permitting the facility under IPPC.

The Environmental Impact Assessment Directive (EIA Directive 85/337 EEC as

amended by 97/11/EC and 2003/35/EC) introduced a Europe-wide procedure to ensure that

environmental consequences of projects are identified and assessed before authorisation is

given. The public can give its opinion and all results are taken into account in the

authorisation procedure of the project. The public is informed of the decision afterwards. It

has become an integral and vital part of the planning of development projects, and requires

the submission of an EIA with the application for development consent. This Directive

applies to the assessment of the environmental effects of public and private projects which are

likely to have significant effects on the environment. It affects the execution of "construction

works, other installations or schemes and for the interventions in the natural surroundings and

landscape including the extraction of mineral resources". Council Directive 85/337/EEC of 27

June 1985 on the assessment of the effects of certain public and private projects on the

environment should be applied to the capture and transport of CO2 streams for the purposes

of geological storage. It should also apply to storage sites pur-suant to this Directive.This

Directive should apply to the geological storage of CO2 within the territory of the Member

States, in their exclusive economic zones and on their continental shelves. The Directive

should not apply to projects with a total intended storage below 100 kilotonnes, undertaken

for research, development or testing of new products and pro-cesses. This threshold would

also seem appropriate for the purposes of other relevant Community legislation. The storage

of CO2 in storage complexes extending beyond the territorial scope of this Directive and the

storage of CO2 in the water column should not be permitted.

Member States should retain the right to determine the areas within their territory from

which storage sites may be selected. This includes the right of Member States not to allow any

storage in parts or on the whole of their territory, or to give priority to any other use of the

underground, such as exploration, production and storage of hydrocarbons or geothermal use

of aquifers.


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(Deliverable 7.2)

Environmental liability Directive. The first EC legislation whose main objectives

include the application of the "polluter pays" principle, this Directive establishes a common

framework for liability with a view to preventing and remedying damage to animals, plants,

natural habitats and water resources, and damage affecting the land. The liability scheme

applies to certain specified occupational activities and to other activities in cases where theoperator is at fault or negligent. The public authorities are also responsible for ensuring that

the operators responsible take or finance the necessary preventive or remedial measures

themselves. Liabilities other than those covered by this Directive, Directive 2003/87/EC and

Directive 2004/35/EC, in particular concerning the injection phase, the closure of the storage

site and the period after transfer of legal obligations to the competent authority, should be

dealt with at national level.

New combustion plants with an output of 300 MW or more should be capable of being

fitted later (retrofitted) with capture technology,. i.e. Carbon Capture Ready (CCR) by setting

aside suitable space on the site for the necessary capture and compression equipment. TheCCR requirement will only be imposed, however, if three conditions apply: suitable storage

sites are available and both transport facilities and the retrofit of capture technology are

technically and economically feasible. Notably, there are no potential timescales for the

retrofit for CCS, and there is no mechanism for requiring an actual retrofit in the future.The

legal ground for the legislative concept of the CCR (Carbon Capture Readiness) is Article 9a

of the LCP (Large Combustion Plants) Directive. It was added by the Article 33 of the CCS

Directive (the Directive 2009/31/EC of the European Parliament and of the Council of 23

April 2009 on the geological storage of carbon dioxide and amending Council Directive

85/337/EEC, European Parliament and Council Directives 2000/60/EC, 2001/80/EC,

2004/35/EC, 2006/12/EC, 2008/1/EC and Regulation (EC) No 1013/2006 (OJ L 140,

5.6.2009, p. 114)) and is repeated by the Article 36 of the newly passed Directive of the

European Parliament and of the Council on industrial emissions (the IED Directive, see:

European Parliament legislative resolution of 7 July 2010).

Member States shall ensure that operators of all combustion plants with a rated electrical

output of 300 megawatts or more for which the original construction licence or, in the absence

of such a procedure, the original operating licence is granted after the entry into force of

Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the

geological storage of carbon dioxide, have assessed whether the following conditions are met:

suitable storage sites are available, transport facilities are technically and economically

feasible and it is technically and economically feasible to retrofit for CO2 capture. If certain

conditions are met, the competent authority shall ensure that suitable space on the installation

site for the equipment necessary to capture and compress CO2 is set aside.

The Directive addresses CCR and requires applicants for new combustion power

stations to carry out an assessment of whether suitable storage is available as well as technical

and economical assessments of transport and retrofitting CCS technology.


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(Deliverable 7.2)

Council Directive 99/31/EC of 1999 on the landfill of waste entered into force on

16.07.1999. The objective of the Directive is to prevent or reduce as far as possible negative

effects on the environment from the landfilling of waste, by introducing stringent technical

requirements for waste and landfills. The Directive is intended to prevent or reduce the

adverse effects of the landfill of waste on the environment, in particular on surface water,groundwater, soil, air and human health. It defines the different categories of waste

(municipal waste, hazardous waste, non-hazardous waste and inert waste) and applies to all

landfills, defined as waste disposal sites for the deposit of waste onto or into land.

The Landfill Directive's definition of waste reflects that of the Waste Framework

Directive (Directive 2006/12/EC) and thus depends upon whether captured CO2 is to be

considered waste for the purposes of that Directive.

The Landfill Directive contains other definitions, which may prove to be relevant to the

storage of captured CO2. The term “underground storage” is defined in the Directive as “a

permanent waste storage facility in a deep geological cavity such as a salt or potassium mine”,

“Liquid waste” is defined as “any waste in liquid form including waste waters but excluding

sludge”, the definition of “inert waste” may also be of significance for CO2 that is to be

stored; “waste that does not go undergo any significant physical, chemical or biological

transformations”. Inert waste will not dissolve, burn or otherwise chemically react,

biodegrade or adversely affect other matter with which it comes into contact in a way likely to

give rise to environmental pollution, or harm human health. The total leachability and

pollutant content of the waste and the ecotoxicity of the leachate must be insignificant, and in

particular not endanger the quality of surface water and/or groundwater'.

Member States may declare, without prejudice to the Waste Framework Directive, that

underground storage may be exempted from certain requirements of the Directive. These

provisions include, amongst others, closure and aftercare procedures, certain water control,

leachate management and meteorological monitoring requirements.

The key issue to consider, with regard to CCS, is whether this activity constitutes

landfill for the purposes of the Directive. A paper prepared for the European Commission by a

consortium of environmental experts in February 2007, highlighted the necessity of clarifying

this issue. The report highlighted the list of waste disposal activities provided in Annex IIA of

the Waste Framework Directive, which would seemingly apply to CCS activities: D1 Deposit

into or on to land (e.g. landfill, etc); D3 Deep injection (e.g. injection of pumpable discards

into wells, salt domes or naturally occurring repositories); D7 Release into seas/oceans

including seabed insertion.

CO2 is not classified as a dangerous substance under the Seveso II Directive 96/82/EC

on the major-accident hazards, and CCS sites are not covered by the directive’s requirements.

The inclusions of CO2 would impede the development of CCS as a greenhouse gas mitigation

measure. This decision assumes that the CCS Directive imposes very strict safety

requirements for the operators of CCS sites. The Seveso III Proposal still excludes carbon

dioxide from its scope. There could be a major accident hazard potential if CO2 is used in


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(Deliverable 7.2)

large quantities, in particular from the transport and storage of large quantities of CO 2 or use

in industrial-scale fire extinguishing plants. CO2 is a colourless and odourless gas which is

heavier than the breathing air. It can cause asphyxiation and could therefore cause serious

damage to human health and the environment. Nevertheless the Commission has not included

storage (under- or aboveground) of large amounts of CO2 within the scope, arguing that CO2is not classified as a dangerous substance as such, and more importantly “that CCS schemes

are only at an early stage, it is premature to judge on whether a major accident hazard would

emerge should the technology be widely used in the future”, and that “further development of

the technology will help to better understand potential risks”. The CCS Directive does not

deal with safety related aspects, several important and necessary elements such as the taking

into consideration of CCS-installations during the land use planning, development of a major

accident prevention policy, the drafting of safety reports and emergency plans are missing.

The major reason to include or to exclude a certain installation within the scope should be the

major accident potential constituted by the substances stored or treated in that establishment.

Carbon Dioxide becomes in effect a dangerous substance if liberated in large amounts.

EU’s R oadmap 2050 for moving to a competitive low carbo economy in 2050,

COM(2011) 112 fin. refers to the separation of CO2 from other components, liquefying it and

storing it in secure locations (primarily geological formations). It can in theory be applied to

any plant involving the combustion of carbon-based fuels, but the roadmap applies only to

coal and CCGT plants. The baseline assumes no signifcant CCS deployment. For the

decarbonized pathways, CCS is assumed to be progressively available from 2020 onwards,

both for coal and for CCGT plants. All fossil fuel plants built after 2020 are assumed to be

equipped with CCS. Coal plants built in the period 2011-2020 are assumed to be retroftted

with CCS in the 2020-2030 decade. Adding CCS to power plants will reduce CO2 emissions

by 90% and reduce effciency by 20%. CCS may reduce plant operational fexibility but is not

assumed to do so here. The quantity and suitability of storage options is not assessed as part

of this project, and indeed these are important questions for the ultimate potential for CCS

deployment; existing studies have identifed ample amounts of promising geological storage

opportunities, sufficient in theory to accommodate the envisioned quantity of production in

any of the pathways studied, but how much liquefed CO2 can actually be injected and retained

in various formations remains unclear. Priority will be given to storage requirements for

heavy industry (since there are few if any alternative abatement options), which may in

practice restrict the amount of CCS that can be sustained for power generation, particularly in

the 40% RES pathway where fossil with CCS is expected to supply 30% of EU power

demand.

3.6. Current and Future Requirements for CCS Projects

The European Commission has launched the "NER 300", the world's largest

demonstration programme for low-carbon technologies, which will act as a catalyst for the

demonstration of new low carbon technologies on a commercial scale. Decisions will be made

at the end of 2012. NER 300 enables the safe capture and storage of CO2. It will be funded

from the sale of 300 million emission allowances held in the New Entrants Reserve (NER) of


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(Deliverable 7.2)

the EU Emissions Trading System (ETS) - aims to encourage private sector investors and EU

Member States to invest in commercial low-carbon demonstration projects. It focuses on

environmentally safe capture and geological storage of CO2 (CCS) and innovative renewable

energy technologies. NER 300 will establish an EU-wide demonstration programme

comprising the best possible projects using a wide range of technologies and involving allMember States.

CCS projects must meet the following specific constraints:

1.

Each CCS project has to implement the full chain (capture, transport and storage);

2. Each project must implement heat integration for the capture component of the

process;

a.

For power generation applications as set out in Annex 2, the Project

Sponsor must demonstrate that it has aimed to maximize heat integration

between the Power Plant and the capture facility, taking intoconsideration operational and economic constraints. There is no

minimum integration threshold;

b. For industrial applications of CCS as set out in Annex 2, and including

CCS on refineries, cement kilns, primary production routes in iron and

steel or aluminium production, the Project Sponsor must demonstrate that

heat integration between the CO2 source and the capture facilities has

been considered and justify the approach taken. There is no minimum

integration threshold.

3.

The capture rate has to be at least 85% of CO2 from the flue gases to which capture

is applied. The 85% is to apply at normal operating conditions;

4. Each CCS Project has to contain an independent research block related to safety of

storage sites and improvement of monitoring technologies, especially in the field of

brine migration, its possible pathways and impacts.

The Decision identifies potential beneficiaries in the refining sector as 'industrial

applications implementing CCS on refineries with 500kt/y stored CO2 from one or more

sources within the refinery'. In line with the rationale of Recital 23 of the EU ETS Directive,

which states that distortion of competition should be avoided between industrial activitiescarried out in installations operated by a single operator and production in out sourced

installations, this provision should be interpreted so as not to discriminate between CO2

captured from hydrogen production within the perimeter of the refinery, and CO2 captured

from the production of hydrogen supplied to the refinery from an out sourced installation.

Thus for the refining sector, for any product in the process which can be produced either on-

site or by outsourcing, 'stored CO2 from one or more sources within the refinery' should be

interpreted to include also CO2 captured from the production of an imported product stream.

Where a Member State is not in a position to submit proposals for Projects falling under

any of the Sub-categories specified in A.II. which meet the relevant Capacity Thresholds,


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(Deliverable 7.2)

proposals for Projects below the relevant thresholds may be submitted by the Member State

and will be considered potentially eligible for an Award Decision pursuant to Article 6 (2) of

the Decision, provided that the derogation from thresholds is supported by a well-founded,

credible justification given by the Member State.

In order to be eligible for the First Round of Funding, Project Sponsors must

demonstrate in the Application Forms a reasonable expectation of entry into operation by 31

December 2015 on the basis of the adoption of the respective Award Decision by 31

December 2011. Delays are likely, in view of the revised date for awards, but means in effect

that a reasonable expectation of entry into operation within four years of the adoption of the

respective Award Decision has to be demonstrated.

Projects must be located in the territories of the Member States, their exclusive

economic zones and their continental shelves. The Decision requires that all relevant national

Permits for the project must be in place and in line with relevant requirements under EU

legislation, or the relevant Permit procedures underway and sufficiently advanced to ensure

start up of the commercial operation could take place by 31 December 2015 on the basis of

the adoption of the respective Award Decision by 31 December 2011.

In respect of Permits relating to the geological storage site for a CCS project in

accordance with Directive 2009/31/EC, in cases where exploration of the site is required

pursuant to Article 5 of the Directive, it will be considered sufficient if the exploration permit

procedure is underway, given that the permit procedure for the storage permit is temporally

dependent on the permit procedure for the exploration permit.

The specification in the previous paragraph is without prejudice to the EligibilityCriterion in Annex I.B.I of the Decision that Permits shall be sufficiently advanced to ensure

that start-up of commercial operation could take place by 31 December 2015 for the First

Round on the basis of the adoption of the respective Award Decision by 31 December 2011;

or to the condition on Award Decisions in Article 9 of the Decision that all Permits, including

the Storage Permit, must be in place within 24 months of the Award Decision, or 36 months

for saline aquifer storage.

4. BULGARIA DCD APPLICATION OF UCG-CCS

Environmental Policy of the European Union is determined primarily by environmental

and economic situations in each Member State. The most important tools for its realization,

however, are the legal acts adopted by the EU authorities. Instruments having binding legal

force in the European Union can be divided into treaties and their amendments, ie primary

law on the one hand, and on the other regulations and directives that belong to the so-called.

secondary legislation.

Bulgaria's membership in the European Union certainly involves reviewing and

implementation of mandatory legal acts of the ЕU which are addressed to all Member States.

Environmental legislation related to mining activities is covered in considerable volume of


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(Deliverable 7.2)

regulatory acts. Regarding the legislative texts relating to the deep underground coal

gasification and permanent storage of CO2 in geological formations ("UCG and CO2

Storage") it may be said that legal regulations concerning that issue are not sufficiently

developed because this technology is relatively new to national and global scale. For CCS

Storage, the requirements of the Directive 2009/31/EC have been successfully transposed intoBulgarian environmental legislation in the middle of 2011. On the other hand the problem of

deep underground coal gasification has not been really considered until now in any legal

reference in the Bulgarian environmental legislation.

4.1. Mining regulations

Regarding regulatory frameworks of the mining activities concerning the environmental

protection in Bulgaria the framework law is "The Environmental Protection Act" (last

amended. On 24. 04. 2012.), which regulates the fundamentals and principles of management

the public relations with the environment.

On 03/06/2011 the National Assembly has approved a draft law amending the EPA,

which introduced into national legislation the requirements of Directive 2009/31/EC

(concerning, carbon storage in geological formations). The changed EPA law requires

mandatory environmental impact assessment (EIA) for all CO2 Storage in geological

formations, large pipelines for transport of carbon dioxide to storage sites, and large plants for

capture of carbon dioxide. All other pipelines and facilities for CO2 capture according to EPA

shall become subject to an assessment of the need for EIA.

Another very important legal reference is the Mineral Resources Act (MRA), last

amended on 17. 02. 2012. It sets out procedures for prospecting, exploration and mining, as

well as conditions for granting exploration and mining licenses. It also defines the terms for

carrying out the research and mining activities and determines the responsibilities and the

control. Significant place in this Act is given to the the protection of subsurface through the

rational utilization of mineral resources in the exploration, extraction and primary processing.

Specific aspects of this Act concerning the development of the project "UCG and CO 2

Storage" are not provided.

Waste Management Act, dated 18 September 2003, last amended on 12.04.2011

provides environmentally friendly waste management as a set of rights and responsibilities,decisions, actions and activities related to waste generation and treatment and forms of control

over these activities. This law determines the requirements to the products, which in the

process of their production or after the end use, form hazardous or mass widespread waste.

The waste management shall be implemented with objective to prevent reduce or restrict the

harmful impact on human health and environment. The act relating to mining is the

Regulation on the Specific Requirements to Mining Waste Management, SG 10 of February

6, 2009, last amended of January 21, 2011. This regulation defines the specific requirements

and procedures for management of mining waste from prospecting, extraction and primary

processing of mineral resources to prevent, reduce or limit their harmful effects on


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(Deliverable 7.2)

components of the environment, safety and human health. In connection with the project

"UCG and CO2 Storage" and under these regulations it is necessary to classify the waste.

Mining wastes that may be generated in the course of practical realization of the project are

typical wastes occurring in classical drilling operations.

Another important legal reference is the Protected Areas Act, SG 133/1998, last

amended of October 9, 2009. This Act regulates categories of protected areas, their purpose

and mode of preservation and use, notification and management, and also prohibiting and

permitting regimes in protected areas for any mining work including drilling operations.

4.2. Ground Water Requirements

Regarding regulatory mechanisms concerning groundwater is the Water Act (last

amended October, 2011). This law provides a unified and balanced water management as a

key component of environment and as a resource in public interest, protection of public health

and sustainable development. An important aspect of regulation for the implentation of a

project "UCG and CO2 Storage" is Regulation № 1 of 10 October 2007 on the Explor ation,

Use and Protection of Groundwater (SG 87/30 October 2007). The Regulation provides a

balanced management of groundwaters by ensuring their sustainable consumption based on

long-term protection of available water resources, ensuring the supply of groundwater is

adequate quantity and quality, creating rules for the exploration and the use of these waters,

establishing indicators for protection, prevention and reduction of pollution with dangerous

substances, contamination by harmful substances and elimination of the effects of already

occurred pollution with these substances. The requirements of Directive 2006/118/EC for the

protection of groundwater against pollution and deterioration were transposed into nationallegislation on 12 December 2006

Regulation № 5 of 23 April 2007 on water monitoring, SG 44/5 June 2007, last

amended on 29.04.2011 establishes the procedure and method to create a network of water

monitoring and the activity of the national system for water monitoring. It creates an

opportunity of assessment and estimation of surface water and groundwater status. This

regulation introduces requirements of Directive 2000/60/EC of the European Parliament and

of the Council establishing a framework for the Community action in the field of water policy

and technical specifications for chemical analysis and monitoring of water status.

Another Regulation № 10 on Issuing Permits for Waste Water Discharge into Water

Bodies and Setting Individual Emission Limit Values for Point Sources of Pollution, SG.

66/27.07.2001, last amended on 02.17.2012 determines the order and manner for issuing

permits for discharge of waste waters from point sources of pollution in the surface water sites

to preserve the purity of the water sites from discharged waste waters. Also determines their

design category for water use, the quality of the waters and creation of favourable conditions

for normal development of the water ecosystems. This regulatory action may be relevant to

the project "UCG and CO2 Storage" only during the exploration when it is expected to

generate the minimum quantities of waste water from drilling operations.


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(Deliverable 7.2)

4.3. Air Emissions

Another significant environmental risk is associated with uncontrolled and/or accidental

release in the atmosphere of gas emissions, the obtained Syngas (coal gasification) and of the

stored CO2 in geological formations. In this respect, important legal documents related to the

project "UCG and CO2 Storage" is the Clean Air Act (last amended May 18, 2012). This law

regulates the specification of indices and standards of the quality of the atmospheric air, the

limitation of emissions, the rights and obligations of the state and municipal bodies, authority

control, limit the emissions of pollutants from the transport vehicles and other individual

sources. It also concerns legal requirements relating to design, construct and operate facilities

with sources of emissions.

Related with this law is Regulation № 1 for emission limit values of harmful substances

(pollutants) emitted into the atmosphere from facilities and activities with stationary sources

of emissions, last amended August 5, 2005. This document lays down emission limit valuesfor pollutants in the atmosphere from stationary sources of emissions in order to prevent or

minimize the direct and / or indirect effects of emissions on the environment and the

associated with these potential risks to human health.

Since the beginning of 2011 the necessary legislative changes have been made for the

storage, capturing and transporting of carbon dioxide emitted by large combustion plants in

Regulation No. 10 of 6 October 2003 on the Emission Limit Values (Concentrations in Waste

gasses) of sulphur dioxide, nitrogen oxides and total dust, discharged to the atmosphere from

large combustion plants, SG 93 of 21 October 2003, last amended 08.03.2011. According to

these changes the places of storage of CO2, technical and economic aspects of transport ofCO2 and the obligation of the operator to provide land for the site and equipment to capture

and compress carbon dioxide are regulated for large combustion plants (over 300 MW).

Another regulatory instrument relevant to the project "UCG and CO2 Storage" is the

Regulation and procedures for issuing and reviewing permits for greenhouse gases (GG) and

monitoring the operators of installations, participating in the GG emission trading quota

system (17.12., 2010). For the proposed technology of project "UCG and CO2 Storage" the

expected emissions of greenhouse gases, still to be proven will be near zero, in which case

this Regulation shall apply only to monitoring but not to quotas for emissions of greenhouse

gases.

To implement the global climate change policy in the national context, Bulgaria has

ratified the UN Framework Convention on Climate Change in 1995 and the Kyoto Protocol in

2002. Under the Kyoto Protocol, Bulgaria must reduce greenhouse gas emissions by 8 per

cent in the years 2008 to 2012, in comparison to ambient air emissions in 1988.

Bulgaria started implementing procedures under EU Directive 2003/87/EC establishing

a scheme for greenhouse gas emission allowance trading within the Community for the

European Union emissions trading system (EU ETS) on January 2007. The Directive's


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(Deliverable 7.2)

provisions are implemented by the Bulgarian EPA. The coordinating authority for the

implementation of the Directive in Bulgaria is the Bulgarian Competent Authority MOEW.

Under the requirements of the EPA, all plants performing an activity that falls within the

scope of the ETS Directive 2003/87/EC (eg, energy activities, metal processing, mineral

industry operations, cellulose and paper production) must obtain a permit for greenhouse gas

emissions issued by the MOEW.

As a rule, no plants (installations) may undertake any of the above-mentioned activities

without holding a permit. The permit includes a detailed description of the plant, the

methodology and frequency of monitoring requirements relating to the reporting of emissions

and the obligation to return (surrender) the allowances. The issued permit is for an indefinite

term and contains requirements for monitoring the emissions and preparing an annual report

on the emissions.

All operators of installations that have received a permit are required to provide to theresponsible authority a monitoring plan and annual monitoring report on emissions released

from the installation during the preceding year. The annual report must be prepared pursuant

to certain directions and formats and is subject to verification. Furthermore, each operator has

the obligation until 30 April of each year to surrender to the competent authority (by

presenting a verification report) a specific number of allowances equal to the total amount of

the emissions released from the installation during the preceding calendar year. Any operator

who fails to return the required quantity of allowances by 30 April of each year to cover its

emissions during the preceding year shall pay a pecuniary penalty of exceeded emissions of

€100 for each tonne of CO2 equivalent that has not been surrendered. The payment of the

sanction does not release the operator from the obligation to surrender the missing quantity of

allowances in the next calendar year.

With the amendments to the EPA as from 2010 Directive 2008/101/EC of the European

Parliament and of the Council amending Directive 2003/87/EC was implemented with the

EPA in order to include aviation activities in the EU ETS. Furthermore, the Act established

the legal framework for Bulgaria's participation in international trading of assigned amount

units (AAUs) under article 17 of the Kyoto Protocol through introducing a national green

investments scheme. The National Trust Eco Fund has thereby been assigned as the leading

authority in the implementation of this scheme. The recent amendments of the EPA (in force

from 3 June 2011) concern the partial implementation of the following directives:

The new ETS Directive 2009/29/EC amending Directive ETS 2003/87/EC to improve

and extend the greenhouse ga

report on the implications of the developing framework regulations for ccs for ucg-ccs opportunities

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