Date faculty of lawgroningen centre of energy law The Market for CCS – The Legal Framework Dr. H.H.B. Vedder
Date faculty of lawgroningen centre of energy law >Overview >Characteristics of a CCS Market >How to create a CCS Market Developing CCS on an industry scale >How to keep a CCS market Competition problems Competition law Third party access (TPA)
Date faculty of lawgroningen centre of energy law >Characteristics of a CCS Market Technology exists, but not on industry scale Market failure - Lacking innovation and externalities Subsidisation is needed Parties most likely to be involved - Point emitters (electricity generation, refineries) - Parties active in oil and gas exploration (expertise and access to (depleted) fields)
Date faculty of lawgroningen centre of energy law >How to create a CCS Market Subsidisation of CCS projects to overcome market failure - Environmental or innovation subsidy? Lacking framework on EU level Guidelines - General Block Exemption But overall attitude seems positive - Mongstad Test Centre
Date faculty of lawgroningen centre of energy law >How to keep a CCS market - I Access to CCS as prerequisite for energy production (if carbon price > CCS costs) Large investments and vertically related parties vertical integration - Enhanced recovery situations Vertical integration and availability of CCS as barrier to market entry foreclosure Past experiences in the energy sector indicate likelihood of foreclosure
Date faculty of lawgroningen centre of energy law >How to keep a CCS market – II EC Merger Control, Article 81 and 82 EC may be used to open up the market - Experiences in gas (storage) market Draft CCS Directive envisages TPA regime - Resembles upstream gas TPA regime, but without the ‘competition objective’ - Possibility for member state to reserve capacity Minimal legal framework is not conducive to market creation