1. Date 31.10.2008 faculty of lawgroningen centre of energy law The Market for CCS – The Legal Framework Dr. H.H.B. Vedder

2. Date 31.10.2008 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)

3. Date 31.10.2008 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)

4. Date 31.10.2008 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 - 2008 Guidelines - General Block Exemption  But overall attitude seems positive - Mongstad Test Centre

5. Date 31.10.2008 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

6. Date 31.10.2008 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