CCS Update: Australia progresses one step closer to cross-border carbon capture and storage

Background

Australia is a Contracting Party to the London Protocol which aims to prevent sea pollution by placing prohibitions on the dumping of wastes and other matter at sea. 

The initial text of the London Protocol prohibited the cross-border transport of CO2 with the purpose of permanent geological storage. CO2 was excluded from the 'reverse list' in Annex 1 of the London Protocol, which specifies wastes and other matters that may be considered for dumping.

In 2006, the Contracting Parties to the London Protocol amended Annex 1 to include '[CO2] streams from [CO2] capture process for sequestration' (2006 Amendment).  The 2006 Amendment entered into force in 2007. However, despite the 2006 Amendment allowing CO2 disposal into a sub-seabed geological formation, Article 6 still prohibited 'the export of wastes or other matter to other countries for dumping or incineration at sea.'

To overcome this barrier, in 2009, the Contracting Parties adopted an amendment to Article 6, to allow the export of CO2 streams for sub-seabed sequestration (2009 Amendment). The 2009 Amendment is yet to enter into force because it has not been ratified by two-thirds of the Contracting Parties to the London Protocol.

In 2019, the Contracting Parties resolved to allow the provisional application of the 2009 Amendment, pending its entry into force. As a result, a Contracting Party can export CO2 for sub-seabed sequestration to both Contracting and non-Contracting parties² if they have:

1. ratified the 2009 Amendment and deposited an instrument of acceptance with the IMO;
2. deposited a formal declaration of provisional application to the IMO; and
3. entered into a bilateral 'agreement or arrangement' which meets the requirements of the London Protocol.

In November 2023, the Federal Government enacted the Environment Protection (Sea Dumping) Amendment (Using New Technologies to Fight Climate Change) Act 2023 (Cth) (Sea Dumping Amendment Act) which aligns with the London Protocol. The Sea Dumping Amendment Act was introduced to amend the Environment Protection (Sea Dumping) Act 1981 (Cth) (Sea Dumping Act), to allow for the export of CO2 from carbon capture processes for sequestration into a sub-seabed geological formation.

The amendments to the Sea Dumping Act entered into force on 7 November, following Australia’s deposit of an instrument of acceptance and deposit of formal declaration to provisional application to the IMO.

What this means

Australia is now poised to enter bilateral treaties with other countries to enable cross-border CCS. Once entered, CCS project proponents can commence cross-border transport of CO2 to or from Australia, subject to receiving the relevant permits and meeting their requirements. 

Australia is progressing towards becoming a regional CCS hub and helping drive the CCS industry at both a domestic and international level. The country’s ideal geological landscape, and proximity to high-emission countries with limited storage capacity suggest it will be pivotal to cross-border CCS efforts.

Now that Australia has ratified the 2009 Amendment, new trade developments and opportunities to strengthen relationships with international trading partners are likely to emerge. Australia can begin to enter bilateral agreements with its Asia-Pacific partners for the facilitation of cross-border CCS projects to support decarbonisation initiatives.

Bilateral agreements and cross-border CCS projects have already commenced in Europe, serving as an example for Australia and other Contracting Parties seeking to engage in cross-border CCS.

Leaders in CCS and Energy Transition

Norton Rose Fulbright has a formidable CCS and energy projects practice in Australia and globally. If you have questions on this update, or require assistance on a CCS related matter, please contact a member of our team listed below.