Insights and Commentaries

Japan's legal and regulatory framework for CCS

16th April 2016

Topic(s): Carbon capture, Domestic policy, law and regulation, Policy, use and storage (CCUS)

Some reflections from the APAC CCUS Legal and Regulatory Forum, Tokyo

Japan's carbon capture, utilisation and storage (CCUS) permitting framework has a marine conservation focus, reflecting the fact that it was enacted to meet Japan's obligations to implement the amendment to the London Protocol that allowed carbon dioxide (CO₂) to be stored in the sub-seabed. In this Insight, Dr Meredith Gibbs, the Global CCS Institute's Legal Fellow (Asia Pacific), reflects on the Institute's Asia Pacific CCUS Legal and Regulatory Forum in Tokyo on 27 January 2016.

As noted in my first Insight as the Institute's Legal Fellow, I attended the third meeting of the Asia Pacific CCUS Legal and Regulatory Forum in Tokyo on 27 January 2016. This workshop was focussed on CCUS-specific legal and regulatory issues for Japan and is discussed in more detail in an Insight by Ian Havercroft.

Japan's permitting framework has a marine protection focus

One of the key messages from the workshop was that Japan's current CCUS permitting model is not aimed promoting carbon capture and storage (CCS) as a low-carbon technology, but rather is primarily focused on protecting the marine environment from any adverse impacts of sub-seabed storage activities. The provisions that provide for a permitting regime for sub-seabed CO₂storage were enacted in 2007 in order to comply with Japan's international obligations to implement the amendment to Annex I of the London Protocol that included CO₂streams as wastes or other matter that may be considered for ocean dumping.

Japan's current permitting regime reflects this history. The CCUS permitting provisions are found in Japan's Marine Pollution Protection Law and only cover offshore, sub-seabed storage. There are no provisions covering onshore geosequestration. Under the Marine Pollution Protection Law, an application for sub-seabed CO₂ storage is made to the Minister of the Environment and is assessed, largely, from an environmental perspective. Two of the key matters of which the Minister must be satisfied before a permit will be granted directly reflect the requirements under the London Protocol, namely: (a) the storage site and the method for the storage will not harm conservation of the marine environment at the storage site; and (b) there is no other appropriate disposal method available (for example, the CO₂ stream cannot be disposed of onshore.

Under Japan's laws, permit applications must include an array of information and plans including an implementation plan, monitoring plan, and an environmental impact assessment report. Applicants will need to undertake an evaluation of the pre-storage marine environment of the disposal area, a type of 'baseline assessment', together with the expected impacts of the disposal of CO₂ at the site. The baseline assessments must be detailed and cover:

• The seawater and seabed overlying the storage site including water quality and benthic sediment
• Marine life including plankton, fish, seaweed and coral and benthic species
• Marine ecosystems including vulnerable and important ecosystems and ecosystems around hot springs
• Social factors including recreation, parks, fishing grounds, cables on seabeds and mineral exploration

Discussions at the Tokyo workshop suggested that the Ministry of the Environment (MOE) may take a precautionary approach to applying the requirement that the sub-seabed storage must not harm the conservation of the marine environment at the storage site. On one view, and following the approach of the London Protocol requirements, this could mean that unless it can be demonstrated that storage is completely safe, storage of CO₂ should not be undertaken. However, it was acknowledged that on this view, there would be very few activities of any kind that can be demonstrated to be totally risk free and that this approach would make it very difficult for CCUS activities to gain a permit.

Another issue discussed at the workshop was that under the Marine Protection Law, a permit is only valid for five years, at which point the permit holder must renew the permit in order to have the right to continue to store the injected CO₂ in the seabed. It was acknowledged that under the Japanese regulatory framework it is not clear what would happen if a renewal was not granted. This lack of long-term security of tenure for storage is likely to be a significant deterrent for storage proponents and their investors alike. In addition, concern was expressed over the lack of site closure provisions and the fact that the Japanese regulatory framework is yet to deal with the issue of long-term liability.

Monitoring requirements and responsibilities

The requirements under the Marine Pollution Protection Law for monitoring are, however, well developed. Applicants must submit the following monitoring plans with a permit application:

• Routine monitoring - this plan must include monitoring for a range of factors such as the quantity of stored carbon dioxide, CO₂ characterisation and injection data (pressure, velocity and temperature), as well as site characteristics including geological characteristics, location and range of stored CO₂, chemical characteristics of the seawater overlying the storage site, marine life and ecosystems, and utilisation of marine life, environmental and resources (eg fishing grounds).
• Precautionary monitoring - this plan must cover monitoring to detect any CO₂ leakage as soon as it occurs. Monitoring is required to cover time dependent changes in pressure in the storage formation, the location and range of stored CO₂ and chemical characteristics of the overlying seawater.
• Emergency monitoring - this plan covers the monitoring required if a leak actually occurs and must include time dependent changes in pressure in the storage formation, detailed conditions of the CO₂, the location and range of stored CO₂, chemical characteristics of the seawater overlying the storage site, impacts on marine life and ecosystems, together with social impacts (including impacts on fishing grounds).

Under the Marine Pollution Prevention Law, where leakage occurs the permit holder is required to take corrective action. The permit holder must report immediately to the MOE any results outside the permitted ranges for CO₂ migration or seawater/marine ecosystem impacts, together with remediation plans for remedy the situation. Regular monitoring is then required until results settle within the expected range.

Enforcement mechanisms

The Minister of the Environment has powers to issue 'business improvement orders' and 'suspension orders', revoke a permit, or impose a monetary penalty, when:

• Dumping activities are conducted contrary to the permit conditions
• There is a breach of the Marine Pollution Prevention Law
• When a permit is obtained based on false information or by fraud.

The MOE has powers to conduct inspections for the purpose of implementing the Marine Pollution Protection Law and can require the permit holder to submit various reports.

Penalties include:

• Unlawful disposal - a fine not exceeding ¥10 million
• Obtaining a permit based on false information or fraud - a fine not exceeding ¥10 million
• Failing to report monitoring results - a fine not exceeding ¥0.5 million

Next steps for Japan

The workshops showed that there is a lot of interest in CCUS legal and regulatory issues and how Japan might further develop its regulatory framework for CCUS. In the coming months, much focus will be on Japan's first full-scale CCS demonstration project, the Tomakomai project which will shortly commence sub-seabed injection of approximately 100,000 tonnes of CO₂ annually for three years. Detailed monitoring of the site will be undertaken and will inform Japan's next steps in developing its CCUS programs and regulatory framework.

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