Carbon capture and storage (CCS) is rapidly evolving from a nascent technology into a critical pillar of the global energy transition. With governments around the world setting ambitious net zero targets and introducing new regulatory frameworks to support CCS deployment, the sector is attracting unprecedented levels of investment.
However, this growth brings complexity. The legal and regulatory landscape for CCS projects varies significantly across jurisdictions, creating challenges for project developers, investors and operators, and their advisers. From securing reservoir access and managing legacy wells, to understanding liability transfer mechanisms and post-closure obligations, clients operating in this space need clear, practical guidance to navigate an evolving patchwork of domestic and international legal frameworks.
Ashurst has a dedicated focus on the legal and regulatory dimensions of CCS, and we are working closely with the Oil & Gas Climate Initiative (OGCI) on a series of joint research initiatives to support industry understanding and development in this area.
Our first publication under this partnership is our global CCS risk analysis, the Management and Transfer of CO2 Reservoir Licences & Liability Study, which provides a comprehensive analysis of the legal and regulatory frameworks governing the management, transfer and allocation of liabilities for reservoirs used in CCS projects, with a focus on both international treaty obligations and domestic legal regimes across key jurisdictions.
This study is split into three sections:
- Phase 1A – International law analysis: High-level analysis of international non-climate and climate treaties relevant to CCS
- Phase 1 – Identification and summary of existing frameworks: Comprehensive review of transfer liabilities for the selected jurisdictions
- Phase 2 – Comparison of existing frameworks: In-depth comparative analysis of the findings in Phase 1
Ashurst and OGCI are currently undertaking a further deep dive into global CCS trends, including a comprehensive study on likely CCS liability scenarios that materially affect the development, transfer, and long-term viability of CCS projects.
We will continue to publish insights and analysis on CCS-related legal and regulatory developments. Explore our latest thinking below.
Management and transfer of reservoir licences & liability study
An analysis of the frameworks governing reservoir licences and liabilities for CCS projects.
Download the full report [PDF 6.24 MB]Key findings
Phase 1A - International law analysis
- Liability pursuant to a treaty will ultimately depend on how each state decides to implement the treaty in its domestic jurisdiction.
- Overall, there are no notable legal constraints that filter from an international treaty level to a domestic level.
Phase 1 - Identification and summary of existing frameworks
- Approach to transfer liabilities can be observed in two buckets: (1) extending liability beyond the existing license holder; or (2) liability ending upon transfer of license to another holder.
- None of the selected jurisdictions provide for a simple automatic statutory "conversion" of a conventional O&G license to a CCS license.
- Post-closure regimes are the norm, with monitoring periods ranging from 10 – 50 + years.
Phase 2 – Comparison of existing frameworks
- Overall, there was a lack of correlation between regulatory certainty and CCS project enablement.
- Comprehensive regimes tended to favor stronger controls for the State, and in turn meant more stringent requirements on CCS proponents.
Management and transfer of reservoir licences & liability study
An analysis of the frameworks governing reservoir licences and liabilities for CCS projects.
Download the full report [PDF 6.24 MB]
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The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.