Chapter 14 - Legal and regulatory barriers to CO2 geological storage in Brazil: Lessons from the European Union

Abstract

Global energy demand is still growing based on fossil fuel consumption. Consequently, carbon capture, utilization, and storage (CCUS) technologies become essential to mitigate the worst impacts of climate change until the energy transition is established. Brazil holds numerous opportunities to CCUS deployment due to its geology. Additionally, as an industrial economy, Brazil could largely benefit from CO2 geological storage by ensuring CO2 mitigation for its continued and growing usage of fossil fuels. However, there is no specific regulation to CCUS in Brazil, and the existing oil and gas, and the environmental legal regime are as yet insufficient to support a rapid and large-scale CCUS deployment in the country. This chapter presents the main legal and regulatory barriers to large-scale CCUS deployment in Brazil, through a descriptive-analytical methodology, as an initial step towards a CCUS regulatory framework proposal. Initially, the main technical, geological, and environmental aspects of CCUS will be addressed, followed by an analysis of the existing legal and regulatory regime in Brazil and what can be applied to CO2 geological storage. Further, the main gaps and regulatory barriers to CCUS in Brazil are identified and discussed. The international experience is brought up with an analysis of the EU CCS Directive and its effectiveness toward large-scale CCUS deployment. Finally, the lessons learned from the EU experience over the past 10 years since the CCS Directive was implemented will be addressed. Based on the EU experience, most of the regulatory challenges to CCUS are attributed to the geological CO2 storage component, especially on how to manage CO2 leakage risks and associated long-term liability. Therefore Brazil needs a CCUS regulatory regime that is supportive of CCUS, addressing the issues unresolved by the CCS Directive and considering its urgent commercial scale while ensuring its environmentally safe deployment.