Driven by European, federal and regional initiatives, the energy and sustainability sector continues to be in a state of flux in 2024. An important development in the transition to a sustainable Flemish industry is the new Decree of 29 March 2024 on the transport of carbon dioxide via pipelines (“CO₂ Decree”). On 7 June 2024, the Flemish Government subsequently approved the implementing decision (“CO₂ Decision”) that will soon bring the CO₂ Decree into effect. In this update, we take a closer look at the outline of this Flemish legislation, enacted ahead of European legislation.
Relevance
The need to reduce carbon dioxide emissions is crucial to meeting climate goals. Today, therefore, there are several initiatives focused on capturing, storing and reusing CO₂ to create a more carbon-neutral business cluster. The CO₂ Decree and CO₂ Decision provide the legal clarity and support needed to build such projects.
The CO₂ Decree is a response to the limited scope of the CCS Directive (“CCS” stands for Carbon Capture and Storage). This Directive, dating back to 2009, has been transposed in Flanders through the Decree of 8 May 2009 and the Decision of 15 July 2011 on “Diepe Ondergrond” (deep underground), which focused exclusively on the geological storage of CO₂, without considering its transport and reuse (CCU – Carbon Capture and Utilisation). The new CO2 Decree aims to fill this gap by providing a legal framework for both pipeline transport of carbon dioxide and infrastructure for liquefaction and reuse. Thus, this is being done even before a new European instrument exists.
Rules
The CO₂ Decree mainly regulates different types of infrastructure for the transport of carbon dioxide, and introduces some important concepts for this purpose:
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The local cluster: Local clusters are networks of pipelines that transport carbon dioxide from at least two producers in a geographically defined area. These clusters are similar to the distribution networks for electricity and gas.
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The transport network: This network transports CO₂ over longer distances, for example between local clusters, to other regions or to pipelines in the North Sea. The transport network functions just like the transmission network for electricity and gas.
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The closed industrial network for carbon dioxide: This regime allows companies, under strict conditions, to establish their own network for carbon dioxide transport. For example, the decree requires that companies who want to use the network must be part of an integrated production and/or operation process. This is similar to the functioning of closed distribution networks for electricity and gas.
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The terminal for liquefaction: This infrastructure liquefies carbon dioxide for transport or shipment to storage or consumer sites and is intended for collective use by (at least two) producers.
The CO₂ Decree sets out how the various systems will be regulated. Local clusters and the transport network are strictly regulated to ensure efficient use of infrastructure and prevent natural monopolies. For these networks, the regulator determines, among other things, quality standards, tariff conditions and third-party access. For closed industrial networks, there is more freedom, which is intrinsic to the concept of a closed network and allows for synergies between production and operation processes.
Conclusion
With this new decree for CO₂ transport, Flanders is taking an important step towards a more sustainable and efficient economy. In particular, these regulations provide more clarity for companies that want to invest in carbon capture and reuse.
We are ready to support you in connection with the legal aspects of this transition and ensure that your projects meet the new legal requirements.
Do you have any questions about this new decree or other energy law issues? If so, please do not hesitate to contact us.
