Results of studies conducted at the Research Center for Greenhouse Gas Innovation (RCGI) have fed into a bill before the Senate to set up a legal framework on carbon capture and storage as an economic activity (photo: RCGI)
Published on 07/11/2022
By Elton Alisson | Agência FAPESP – The Federal Senate, the upper house of the Brazilian Congress, is debating a bill (PL 1,425) that establishes a legal framework for the economic development of carbon capture and storage (CCS) activities in geological reservoirs such as oil wells, saline aquifers and coal beds.
Drafted by Jean Paul Prates, Workers Party (PT) Senator for Rio Grande do Norte state, the bill is based on studies of CCS by scientists at the Research Center for Greenhouse Gas Innovation (RCGI).
Set up with the support of FAPESP and Shell at the University of São Paulo’s Engineering School (POLI-USP), RCGI is one of 23 Engineering Research Centers (ERCs) established by FAPESP in the last ten years.
“The bill derives from research conducted over a four-year period by Brazilian scientists at RCGI, a locus of excellence in partnerships between industry, governments and public universities to find solutions for the problems we have selected”, according to the preamble.
RCGI has some 400 researchers working on 46 research projects in advanced studies relating to the sustainable use of natural gas, biogas, hydrogen, and carbon dioxide management, transportation, storage and use.
Some of its main research programs have to do with CCS and bioenergy with carbon capture and storage (BECCS).
“Brazil has huge potential for CCS, both offshore [in deep-sea oil and gas wells] and onshore. An example is capture and storage of carbon dioxide emitted during production of ethanol and other biofuels, known as BECCS,” Julio Meneghini, head of RCGI, told Agência FAPESP.
“If the CO2 emitted by combustion of diesel in the trucks that transport sugarcane and the machinery used to plant the crop is captured and stored, for example, and application of fossil fertilizers to sugarcane grown for bioenergy is reduced, then Brazilian ethanol will have a negative footprint in terms of greenhouse gas emissions,” he said.
The bill also states that geological carbon sequestration (GCS), used to store large amounts of CO2 permanently in the geological substrate and prevent its release, is a means of reducing greenhouse gas emissions by industries that cannot do so otherwise owing to production processes or cost.
It also notes that low-carbon technology in Brazil is far from being implemented on a large scale, especially for GCS. Only a few subsalt oilfields perform CCS. The reasons, according to the senator who drafted the bill, include environmental licensing constraints, a lack of clear rules, and the difficulty of integrating the industrial complexes that emit CO2 with injection projects for permanent storage.
Three aspects of the barriers to large-scale implementation of CCS projects are considered strategic: first, the cost of building and operating the requisite infrastructure; second, a lack of official incentives for the development of CCS; and third, failure to address the legal and regulatory issues relating above all to geological storage of CO2.
“Implementation of the activities that make up the CCS chain requires the establishment of a specific legal framework for its development in Brazil, especially as far as the CO2 storage stage is concerned, because this stage of the chain will introduce novel uses of the Brazilian subsoil that could represent economic costs and risks for operators,” Meneghini said.
Given the lack of CCS rules and standards in Brazil, in 2017 RCGI set up a research group called Project 42, and some of its members have since migrated to a new project called Advocacy, whose research findings contributed to the drafting of the bill.
The group consists of lawyers, engineers, geographers, economists and physicists, and works with research centers on the same topic in the United States and United Kingdom.
“We spent the last five years conducting a study designed, among other aims, to help draft a legislative proposal on CCS in Brazil with definitions of parameters such as the competent regulatory and granting authority, property rights to stored carbon, environmental licensing, and long-term civil responsibility,” said Hirdan Katarina de Medeiros Costa, coordinator of the bill-drafting project.
One of the researchers’ conclusions reflected in the bill was that geological reservoirs are rock formations with economic value and hence to be considered mineral resources that belong to the federal government. CCS permits should be granted by the Ministry for Mining and Energy (MME) for a limited period and on terms and conditions stipulated in the law, on pain of cancellation.
“This affords legal certainty for companies interested in doing CO2 storage, which is a high-cost economic activity,” said Isabela Morbach, a lawyer and a member of the research group who studied the key legal points that should ideally be defined in a bill on CCS.
Given that CO2 injection and storage technology and know-how have been developed by the oil and gas industry in Brazil, the researchers concluded that the CCS regulating authority should be the Brazilian National Agency for Oil, Natural Gas and Biofuels (ANP), and that CCS environmental licensing should follow the rules and standards set by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA), an arm of the Ministry of Environment (MMA).
The researchers also proposed that responsibility for CO2 stored in a reservoir after closure could be transferred to an asset manager – a private institution owned by a group of operators and overseen by ANP.
“The asset manager would receive the area after it has been filled and closed by the licensed company, which would be required to monitor it for long enough to prove the CO2 is stable and ensure the operation was completed safely. After this period, the area would return definitively to the state,” Morbach said.
The study conducted by the researchers in preparation for drafting the CCS bill included an analysis of the legislation in effect in the UK, US, Australia, Alberta (Canada), and Norway. The US, Canada and Norway have advanced most in the field of CCS, with projects that are up and running. “International experience shows that this activity can prosper only if the state participates as a kind of guarantor, proposing suitable rules, implementing laws, and assuming long-term risks,” said geologist Israel Lacerda de Araújo, also a member of RCGI’s group on CCS.
“It’s not possible for any project to leave the drawing board without clear rules and an agreement between the parties and the state, acting as honest broker and also defending the interests of the nation’s population,” said Araújo, who is a legislative consultant to the Senate on energy, mining and related matters, and worked with Prates on drafting the bill.