Bonn, Germany Sunday, 25 March 2012

1. The Carbon dioxide Capture and geological Storage As project activities Under CDM – The Durban Regulation First SDM Joint Coordination Workshop How the M&P for CCS can effectively be implemented By the CDM EB with due consideration of safeguards José Domingos Gonzalez Miguez Bonn, Germany Sunday, 25 March 2012

2. CDM Executive Board • Shall adopt relevant documents with regard to: • PDD • Selection and characterization of geological storage site • Risk and safety assessment • Environment and socio-economic impact assessment • Monitoring requirements • Requirements for financial provisions • Site development and management plan • Specific criteria for accreditation of DOEs

3. 1. Selection and characterization of geological storage site • Geological storage sites shall only be used if there is no significant risk of seepage, no significant environment or health risk and site will comply with laws and regulations of the host Party • Site is not located in international waters • Steps to characterize the proposed geological storage site: • Data and information collection, compilation and evaluation • Characterization of the geological storage site architecture and surrounding domains • Characterization of dynamic behavior and risk assessment • Establishment of a site development and management plan

4. 2. Risk and safety assessment • Risk and safety assessment shall be carried out to assess the integrity of the site and potential impacts on human health and ecosystems and to inform environment and socio-economic impact assessment • Consider specific risks associated with containment failure • Risk of continuous slow seepage • Risk of sudden mass release of CO2 from surface installations (e.g. pipeline rupture) • Assess potential risks • Hazard characterization • Exposure assessment • Effects assessment • Risk characterization • Contingency plan for large incidents

5. 6. Environment and socio-economic assessment • Environment and socio-economic impact assessment shall analyze thoroughly and exhaustively air emissions, solid waste generation and water use associated with current CCS technologies • Best available techniques will be applied • Shall include at least a comprehensive analysis of the environment and socio-economic impacts • DOE selected to validate shall review the PDD and any supporting documentation to confirm that comments from local stake holders have been invited, a summary of the comments received has been provided and a report to the DOE on how due account was taken of any comment has been received

6. 3. Monitoring (I) • To meet the following objectives: • Assurance of environmental integrity and safety of the site • Confirm that the injected CO2 is contained within the geological storage site and project boundary • Injected CO2 is behaving as predicted • Ensure that good site management is taking place • To detect and estimate flux rate and total mass of CO2 from any seepage • To determine whether remedial measures have been carried out in the event of seepage • To determine the reduction in anthropogenic emissions by sources have occurred

7. 3. Monitoring (II) • The monitoring of the geological storage site shall: • Begin before injection activities commence to ensure time to collect baseline data • Be conducted at an appropriate frequency • Not be terminated earlier than 20 years after the end of the last crediting period or after the issuance of CERs has ceased, whichever occurs first • Only be terminated if no seepage has been observed at any time in the past 10 years and if available evidences indicate that stored CO2 will be completely isolated from the atmosphere in the long term. This can be demonstrated through: • History matching confirms that there is agreement between modeling and behavior of the CO2 plume • Modeling and observations confirm that no future seepage can be expected

8. 3. Monitoring (III) • The PPs shall, for each verification period, carry out history matching and, where necessary update the numerical models used to characterize geological storage site by conducting new simulations using the monitored data and information • The numerical models shall be adjusted in the event of significant deviations between observed and predicted behavior • Where significant deviations are observed during history matching or when requesting a renewal of the crediting period the PPs shall, as appropriate: • Recharacterize the site • Revise the project boundary • Update the Risk and Safety assessment • Update the Environmental and Socio-Economic impact assessments • Revise the monitoring plan • Update the site development and management plan

9. 3. Monitoring (IV) • Where information prepared indicates that the geological storage site no longer meets the requirements the issuance of CERs shall cease • Any seepage that occurs during the crediting period shall be accounted as project or leakage emissions. • Any seepage that occurs after the end of the last crediting period shall be quantified and reported in monitoring plan

10. 4. Requirements for financial provisions • PPs shall establish financial provisions • Meet all obligations • To allow safe operation • To address the risk of PPs insolvency • To offer means of redress for affected communities and ecosystems in the event of seepage • To enable the host Party to discharge its obligation arising in connection with transfer of liability • Financial provisions shall cover: • Cost of ongoing monitoring and of verification and certification by a DOE for at least 20 years after the end of the last crediting period or after the issuance of CERs has ceased, whichever occurs first • In the event of seepage, cost associated with obligations • The cost of remedial measures required by law and regulations of the host Party • Any other requirement by the host Party agreed by the time of host Party approval and described in the PDD

11. 5. Liability • PPs shall clearly document in the PDD how the liability obligations arising from a CCS project activity with exception of a net reversal of storage are allocated during the operational phase, closure phase and post-closure phase • During the operational phase and any time thereafter until a transfer of liability to the host Party has been effected liability shall reside with PPS • A transfer of liability from PPs to the host Party shall be effected after: • The monitoring of geological storage site has been terminated • The host Party has established the conditions set out by the DNA in its letter of approval and relevant laws and regulations applicable to the geological storage site have been complied with

12. DOEs - Participation Requirements A non-Annex I Party may only host a CCS project activity if: • it has submitted an expression of its agreement to allow the implementation in its territory and, • provided that it has established law and regulations which: • Set procedures for site selection, characterization and development; • Define means to confer to PPs rights to store CO2; • Provide for redress for any significant damage; • Provide for remedial measures to stop and control any unintended seepage; • Establish means for addressing liability arrangements for geological storage sites; • Establish means for addressing a net reversal storage for a host Party that accepts the obligation;

13. DOEs - Validation and Registration (I) • DOEs shall confirm that these requirements are met: • Participation requirements; • Geological storage site has been characterized and selected; • Risk and safety assessment has been carried out; • Environment and socio-economic impact assessment have been carried out including transboundary impacts; • Those assessment confirm the viability of the CCS project activity • Provisions for liability have been agreed; • Financial provisions have been put in place by PPs; • PDD has provisions for monitoring; • PPs provide an analysis of environmental conditions of the site prior to any storage; • The DOE has received from the PPs written confirmation from the DNA of the host Party that: • the right to store CO2 has been conferred to PPs; • The host Party agrees to the financial provisions described in the PDD; • The host Party accepts the allocation of liability as proposed in the PDD; • Whether or not the host Party accepts the obligation to address a net reversal of storage

14. DOEs - Validation and Registration (II) • Project boundary shall include all above ground components including: • Installations where CO2 is captured; • Treatment facilities; • Transportation equipment; • Reception facilities or holding tanks at the injection site; • Injection facilities • Subsurface components of geological storage site and all potential sources of seepage • Project boundary shall encompass the vertical and lateral limits of CO2 geological storage site that are expected when the CO2 plume stabilizes over the long term

15. DOEs - Verification and Certification (I) • The initial verification and certification may be undertaken at a time selected by the PPs • Subsequent verification and certification shall be submitted no later than 5 years after the end of previous verification period; • Verification and certification shall continue beyond the end of the last crediting period and shall only cease after the monitoring of the geological storage site has been terminated;

16. DOEs - Verification and Certification (II) • The verifying DOE shall: • Determine whether monitoring was conducted in accordance with monitoring plan; • Determine site development and management plan is being adhered to; • Determine whether significant deviation were observed during history matching and in such case recharacterization of the site, update of assessment and revision of project boundary and monitoring plan have been conducted; • Whether seepage occurred during verification period; • In case seepage occurred, determine: • whether remedial measures and plans in the R&S assessment were implemented and effective; • whether a net reversal of storage occurred; • Quantify the amount that occurred as a result of seepage • Determine whether there have been any unintentional transboundary effect; • Determine, where applicable, whether geological storage site has been successfully closed

17. THANKSQUESTIONS?