The cross-border carbon dioxide network can get the project of common interest status, which, in turn, enables the significant streamlining of the investment.

 

 

The newly-released European Commission’s Proposal for a Regulation of the European Parliament and of the Council on guidelines for trans-European energy infrastructure and repealing Decision No 1364/2006/EC of 19 October 2011 COM(2011) 658 final (hereinafter referred to as ‘draft Regulation’) will for sure have a great influence on the future shape and tendencies on the carbon market.

 

It is not only for the fact that the 'energy infrastructure' in the meaning of the draft Regulation (see definition in Article 2(1)) covers any physical equipment, located within the Union or linking the Union and one or more third countries, designed to allow, among others, the transportation of carbon dioxide, but for its overall effect on changes in European energy mix in the coming years. It becomes, notably, more and more evident that it would be difficult to increase the share of intermittent renewable energy sources without significant investments in transmission and distribution infrastructure. The radical shortening of the infrastructure’s permitting procedure as well as costs-sharing algorithms are also necessary.

 

The draft Regulation accompanying document – the summary of impact assessment – contains the comparison of options and final conclusions as regards the evaluations made.

 

As a result of the analysis, the impact assessment presents a set of preferred options, which are:

1) establishment of a regime of common European interest, full one-stop shop and time limit of 4 years for projects of common interest (PCI);

2) ex ante cross-border cost allocation and risk-specific incentives for PCIs; and

3) a combination of grants, risk sharing and risk capital instruments.

 

Central to the new regime is the invention for a concept for a Union-wide list of projects of common interest. Project of common interest, pursuant to the legal definition, means a project, which is necessary to implement the energy infrastructure priority corridors and areas set out in Annex I to the draft Regulation. The pivotal issue is that among Energy Infrastructure Priority Corridors and Areas (listed in Annex I to the draft Regulation) is also mentioned (point 12) cross-border carbon dioxide network: development of carbon dioxide transport infrastructure between Member States and with neighbouring third countries in view of the deployment of carbon dioxide capture and storage. The list regards all Member States.

 

It is enshrined the list of PCI being established by the European Commission and  reviewed/updated as necessary every two years. The first list shall be adopted by 31 July 2013 at the latest.

 

Annex II to the draft Regulation (titled: ‘Energy Infrastructure Categories’) in point 4 mentions as the energy infrastructure categories to be developed in order to implement the energy infrastructure priorities the following facilities concerning carbon dioxide:

 

(a) dedicated pipelines, other than upstream pipeline network, used to transport anthropogenic carbon dioxide from more than one source, i.e. industrial installations (including power plants) that produce carbon dioxide gas from combustion or other chemical reactions involving fossil or non-fossil carboncontaining compounds, for the purpose of permanent geological storage of carbon dioxide pursuant to Directive 2009/31/EC;

 

(b) facilities for liquefaction and buffer storage of carbon dioxide in view of its further transportation. This does not include infrastructure within a geological formation used for the permanent geological storage of carbon dioxide pursuant to Directive 2009/31/EC and associated surface and injection facilities;

 

(c) any equipment or installation essential for the system in question to operate properly, securely and efficiently, including protection, monitoring and control systems.

 

The PCIs should generally meet the criteria laid down in Article 4 of the draft Regulation, among others:

(a) be necessary for the implementation of the energy infrastructure priority corridors and areas set out in Annex I to the draft Regulation; and

(b) display economic, social and environmental viability; and

(c) involve at least two Member States, either by directly crossing the border of one or more Member States or by being located on the territory of one Member State and having a significant cross-border impact.

 

In addition, carbon dioxide transport projects falling under the categories set out in above-quoted point 4 of Annex II, should contribute significantly to the following three specific criteria:

– avoidance of carbon dioxide emissions at low cost while maintaining security of energy supply;

– increase the resilience and security of carbon dioxide transport;

– efficient use of resources, by enabling the connection of multiple CO2 sources and storage sites via common infrastructure and minimising environmental burden and risks.