Researchers from the University of Exeter and Reading, UK, defent that the law needs significant amendments to legislate how carbon can be captured, used, and transported legally, according to a study published in European Energy and Environmental Law Review. The authors defend that this would allow this technology to be used to fight global warming.
An EU carbon capture regulatory framework is desperately needed to encourage the safe use of carbon. Until now, this has not been an issue, and transport and storage of CO2 are neither expressly prohibited nor allowed by international environmental law. This leaves any company that wants to transport CO2 in unknown territory, especially across more than one country.
International law changes slowly because it needs approval from multiple countries before it can be enforced, which means amendments to existing conventions take a long time to put in place and require multiple negotiations. In addition, governments will be reluctant to accept changes placing a higher burden on public funds, regardless of how unlikely the event of significant leakage is. In this study, the authors argue that a liability framework for CO2 capture, use, and storage could represent the first step toward addressing this complex issue.
“Ensuring safe deployment of carbon capture through minimisation of leakage must remain a priority to supplement climate change mitigation efforts and get the most benefits from this technology’s deployment,” said Associate Professor Dr. Kyriaki Noussia, from the University of Reading.
According to the authors, liability insurance is key to ensuring there is a safety mechanism to help carbon technology. Any losses in property casualty policies are not appropriate for environmental pollution incidents.
In addition, the threat and the frequency of cyber-risks have created the need for specific coverage for these incidents. The authors anticipate this will re-establish a ‘soft’ insurance market and help promote the widespread use of carbon capture.
Finally, risk could be spread through risk-sharing agreements or a pool system allowing companies to share each other’s losses, where they are both insured and insurer. Governments can also step in to develop minimum safety standards for carbon capture, use, and storage, to then allow the insurance market to respond.
Noussia K, Caine C, and Richardson W (2022) European Regulatory and Insurance Aspects of Carbon Capture and Storage. European Energy and Environmental Law Review
Volume 31, Issue 6, 383 – 393, https://doi.org/10.54648/eelr2022024