NSTA releases much needed guidance on measurement of carbon dioxide and the content of Carbon Storage Permit Applications

The North Sea Transition Authority (“NSTA”) is responsible for offshore carbon storage licensing and permitting in relation to the UK Continental Shelf (UKCS). Following the successful initial carbon storage licensing round in 2022, there are now over 21 offshore carbon storage licences in the UKCS. Only a limited number of these relate to the Track 1 and Track 2 CCS cluster projects which are expected to be now working towards key investment decisions. There remains significant uncertainty surrounding what the NSTA expects to receive from carbon storage licensees (including the Track 1 and Track 2 CCS cluster projects) in support of carbon storage permit applications; therefore on 28 March the NSTA released two guidance documents titled ‘Guidance on the content of an Offshore Carbon Storage Permit Applications’ and ‘Guidance for Measurement of Carbon Dioxide for Carbon Storage Permit Applications’. While stated to be non-binding, they contain helpful details for all those who may seek carbon storage permits in the future.

Offshore Carbon Storage Permit -  Application documents

The ‘Guidance on the content of an Offshore Carbon Storage Permit Applications’ document sets out a comprehensive list of documents required to be submitted in the course of making an Offshore Carbon Storage Permit application. The range of topics required to be covered span from specific geological surveys to financial arrangements, covering in considerable detail the applicant’s long-term plans for the use of the storage site.  The documents are:

1. Carbon Storage Project Overview – outlining the fundamentals of the enterprise, including key points surrounding carbon transportation, permitted pressure, injection rates as well as maps and diagrams of the site.
2. Storage Site and Complex Characterisation – including the natural environment of the site, described in terms of its estimates of storage capacity, geological evaluation, petrochemical analysis, basin evolution and subsurface modelling.
3. Carbon Storage Development Plan – describing the engineering works required to undertake the enterprise, such as all seals, pipelines, wells, injection facilities and brine production facilities. The document is also expected to contain details of carbon sources and geological pressure forecasts expected as the injection takes place, of well design and injection technology, as well as project planning and net zero considerations.
4. Containment Risk Assessment – including a comprehensive summary of the geological hazards which may cause the reservoir to leak. These hazards are expected to be analysed, evaluated and mitigated in light of the long-term storage perspective.
5. Monitoring Plan – detailing the activities the applicant expects to perform to monitor conformance and containment as well as detection and measurement of any potential leakages.
6. Corrective Measures Plan – explaining the specific emergency measures expected to be taken in each foreseeable scenario if a significant irregularity or leakage is detected.
7. Provisional Post-Closure Plan – describing the characteristics of the site following the reaching of the maximum carbon dioxide pressure and the ceasing of injection, from the criteria chosen to establish this point to the expected monitoring regime of the stored carbon.
8. Proposed Financial Security – demonstrating that (for NSTA’s purposes) the applicant has the financial security necessary to ensure compliance with Schedule 2 of the Storage of Carbon Dioxide (Licensing etc.) Regulations 2010 (the “Regulations”), in essence with a view to ensuring the applicant is at a low risk of insolvency at any of the costly stages of the operation of the site.

The desired content of each document is explained in detail in the guidance, providing a useful framework for any applicant.  The guidance also details how applicants should interpret the phrases ‘storage site’, ‘storage complex’, ‘hydraulic unit’, ‘migration’ and ‘leakage’, as used in regulation 7 of the Regulations for the purposes of a carbon storage permit application, with the aim of ensuring uniformity among potential applicants and ease of assessment for the NSTA. The section includes examples of geological maps and surveys to accompany a carbon storage permit application, serving the same aim.

Measurement of Carbon Dioxide for Carbon Storage Permit Applications

The second document, ‘Guidance for Measurement of Carbon Dioxide for Carbon Storage Permit Applications’, outlines technical guidance for the measurement of volume, density, pressure and state of matter of carbon dioxide, which requires to be set out in a storage permit application_. The guidance notes that injected carbon dioxide must be measured for two regulatory purposes, being:

1. financial accounting and emissions-trading purposes; and
2. technical requirements of the relevant reservoir modelling.

The guidance focuses particularly on acceptable deviations from measured samples, noting that small differences in pressure or temperature may result in changes to the state of matter of carbon dioxide, with significant impacts on the functioning of the engineering equipment such as pipelines. It outlines the acceptable methods of measuring the qualities of carbon dioxide before its storage, as well as the most appropriate moments for record gathering. It conveys experience the NSTA has collated in the operation and calibration of various types of equipment useful in the measuring of the qualities of carbon dioxide. For example, it compares the various measuring methods, such as Coriolis meters, ultrasonic meters and CBM strategies. These measurements determine payments under the Carbon Trading Scheme, so they are of commercial importance as well.

Commentary

These two guidance documents will be key points of reference for parties seeking carbon storage permits – in particular, the licensees of Track 1 clusters at Northern Endurance and Hynet, and Track 2 at Acorn and Viking areas – but also all future applicants. The NSTA has a difficult task of assessing what data should be available publicly and what should be allowed to be kept confidential by the licensees – misapprehension of that balance in either way might lead to lessened investment appetite. See our previous Law-Now here on the NSTA’s recent ‘Consultation on proposed regulations for disclosure of carbon storage information and samples’. The published guidance should be viewed in this context. The NSTA now has a separate carbon storage development team, tasked with assisting potential current and future licensees – the guidance pledges cooperation and transparency from the NSTA if it chooses to depart from the guidance. 

This article is published with thanks to Alex Ciesla, Charlie Denham, Vini Cowden, Dalia Majumder-Russell, Chris McGarvey and Sam Rylance.

The Guidance on the content of an Offshore Carbon Storage Permit Applications is available here.

The Guidance for Measurement of Carbon Dioxide for Carbon Storage Permit Applications is available here.