---

Energy Bill

The noble Lord, Lord De Mauley, has raised an important issue. I shall try to explain why we have drafted the provisions in Clause 20 as we have and set out why the amendment, which would include a provision about notification of accidents, near accidents or leakages relating to a carbon dioxide storage site, is unnecessary. The noble Lord could have chosen other examples to put in, but we would equally have argued that they were unnecessary because they are so obvious. Clause 20 allows licences to be granted on such terms and conditions as the licensing authority sees fit. The power will allow the authority to include case-specific requirements in relation to each carbon dioxide store. This clause provides a non-exhaustive list of examples of the sorts of conditions licences may contain, including: financial security provisions; the right to modify the licence; provisions about closure of the storage site; and provisions about the termination of the licence. Notification obligations are not mentioned expressly in Clause 20(3) because the list of potential licence conditions in that clause is non-exhaustive. Trying to provide an exhaustive list would not be possible at this time, for reasons I will try to outline. Instead, Clause 20(3) aims to set out examples of some of the less obvious provisions that may be contained in licences. To a certain extent, it is a matter of opinion which are obvious and which are not, but in other circumstances it is obvious which are clear and which not. There are two reasons why an exhaustive list of licence terms and conditions cannot be provided at present. First, there is only very limited practical experience worldwide of licensing the permanent storage of carbon dioxide, and the detailed arrangements will inevitably develop as experience grows. In the mean time, the relevant licence terms and conditions will need to be assessed on a case-by-case basis. Secondly, international legislative developments, which the noble Lord, Lord Teverson, asked about—for example, the EU proposal for a directive on the geological storage of carbon dioxide, which is currently under negotiation—mean that the licensing regime, including the applicable licence terms and conditions, will need to evolve and be adjusted with time. Therefore, because of the above flexibility that we require, we have restricted the list in Clause 20(3) to examples of the less obvious conditions that may be included in licences. We will also be consulting on our proposed licensing regimes in the near future. We expect all licences to include as a matter of course—with the onus on the operator, too—provisions on monitoring, remediation, reporting, record-keeping and notification obligations. This is because these licence provisions will play a fundamental role in ensuring that the CO2 storage sites are run in a way that pays due care and attention to environmental and health and safety considerations. I reassure the Committee, particularly the noble Lord, Lord De Mauley, that notification obligations will be included in every licence as a matter of course, due to the importance of keeping the regulatory authority informed of any leaks or other significant developments in relation to the storage site. Clause 23(1) specifies that it will be a criminal offence to fail to notify the regulatory authority as required by a licence, which necessarily implies that notification requirements will be included in a licence. I was asked about the clause not allowing onshore storage of CO2. I am advised that the onshore storage of CO2 is not permitted because of the EU landfill directive. That is why the Bill focuses on offshore storage. The other elements of CCS—capture and transport—can be licensed under the existing regulatory framework, so the Bill does not have to deal with them.