Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
Eligibility. The following entities are eligible to submit
project applications and, if approved, receive CCS credits, in accordance with
following protocol which is incorporated herein by reference and is referred to
as the "CCS Protocol" hereafter.
Industrial Strategies Division, California Air
Resources Board. August 13, 2018. Carbon Capture and Sequestration Protocol
under the Low Carbon Fuel Standard.
(1) Alternative fuel producers, refineries,
and oil and gas producers that capture CO2 on-site and
geologically sequester CO2 either on-site or
off-site.
(2) An entity that
employs direct air capture to remove CO2 from the
atmosphere and geologically sequester the CO2. If
CO2 derived from direct air capture is converted to
fuels, it is not eligible for project-based CCS credits. However, applicants
may apply for fuel pathway certification using the Tier 2 pathway application
process as described in section
95488.7.
(b)
General Requirements.
(1) Projects and fuel pathways claiming CCS
credits must comply with the CCS Protocol. To be considered in compliance with
the CCS protocol, a project must be issued executive orders and meet all the
requirements throughout the project life in accordance with the permanence
requirements of the CCS protocol.
(2) Credit determination for any project that
utilizes CCS must be performed in accordance with the accounting requirements
of the CCS protocol.
(3) Except for
direct air capture and sequestration projects, credits must be prorated based
on the volumes delivered to California.
(4) CCS credits generated by crude oil and
gas producers must be claimed under the Innovative Crude Provision (section
95489(c)).
(5) CCS credits generated by refiners must be
claimed under the Refinery Investment Credit Program (section
95489(e)).
(6) The amount of net
CO2 sequestered by alternative fuel producers can be
used to adjust the carbon intensities of the associated fuel
pathways.
(7) Projects utilizing
CCS must undergo verification under section
95500 in order to receive
credits.
(c)
Application Contents and Submittal. Unless otherwise noted, an
application for CCS credits must comply with the following requirements:
(1) An application must be filed jointly by
an entity that captures CO2 and an entity that
sequesters the resultant CO2, unless the same entity is
responsible for CO2 capture and sequestration.
(2) An application must contain the following
materials:
(A) A complete description of the
CCS project and how greenhouse gas emissions are reduced;
(B) An engineering drawing(s) or process flow
diagram(s) that illustrates the project and clearly identifies the system
boundaries, relevant process equipment, mass flows, including the quantity of
CO2 injected into pipeline or delivered by other modes
of transport for CO2 injection, and energy flows
necessary to calculate the CCS credit;
(C) A description of all combustion and
electricity-powered equipment within the system boundaries, including their
respective capacities, sizes, or rated power, fuel utilization type, fuel
shares, energy efficiency (lower heating value basis), and proposed
use;
(D) A description of all
sources of flared, vented, and fugitive emissions within the system boundaries,
including the compositions and quantities of the flared, vented, and fugitive
emission streams leaving the system boundaries;
(E) Receipts/invoices for energy use and
chemicals;
(F) An estimate of the
CCS credit, calculated in accordance with the accounting requirements of the
CCS Protocol including descriptions and copies of production and operational
data or other technical; and documentation utilized in support of the
calculation. The application must contain process-specific data showing that
the reductions are part of the CCS project, and
(G) Executive orders issued pursuant to the
permanence requirements of the CCS protocol, certifying the sequestration site
as capable of permanently storing CO2 and authorizing
operation and credit generation.
(3) An application must include a list of
references covering all information sources used in the calculation of the CCS
credit. The reference list must meet the requirements of section
95489(c)(2)(E).
(4) An application must include a signed
transmittal letter from the applicant attesting to the veracity of the
information in the application packet and declaring that the information
submitted accurately represents the actual CCS project greenhouse gas emissions
reductions. The transmittal letter must be the original copy, be on company
letterhead, be signed by an officer of the applicant with authority to attest
to the veracity of the information in the application and to sign on behalf of
the applicant.
(5) CBI must be
designated and a redacted version of any submitted documents designated to
include CBI must be provided pursuant to the requirements described in section
95488.8(c).
(6) An applicant that submits any information
or documentation in support of a proposed CCS project must include a written
statement clearly showing that the applicant understands and agrees that all
information in the application not identified as confidential business
information is subject to public disclosure pursuant to California Code of
Regulations, title 17, sections
91000 through
91022 and the California Public
Records Act (Government Code, §§
6250 et
seq.), and that information claimed by the applicant to be confidential might
later be disclosed under section
91022 if the Board determines the
information is subject to disclosure.
(7) An application, supporting documents, and
all other relevant data or calculation or other documentation must be submitted
electronically via the AFP unless the Executive Officer has approved or
requested another format.
(d)
Application Approval
Process. The Executive Officer must approve an application before the
CCS project can generate credits under the LCFS regulation.
(1) After receipt of an application
designated by the applicant as ready for formal evaluation, the Executive
Officer will advise the applicant in writing either that:
(A) The application is complete, or
(B) The application is incomplete, in which
case the Executive Officer will identify which requirements have not been met.
The applicant may submit additional information within 30 days to correct
deficiencies identified by the Executive Officer, otherwise, the application
will be rejected.
(2)
After accepting an application as complete, the Executive Officer will post the
application on the LCFS web site. Public comments will be accepted for 10
calendar days following the date on which the application was posted. Only
comments related to potential factual or methodological errors may be
considered. The Executive Officer will forward to the applicant all comments
identifying potential factual or methodological errors. Within 30 business
days, the applicant must either submit revisions to its application to the
Executive Officer, or submit a detailed written response to the Executive
Officer explaining why no revisions are necessary.
(3) If the Executive Officer finds that an
application meets the requirements set forth in section
95490(b), the
Executive Officer will take final action to approve the CCS project. The
Executive Officer may prescribe conditions of approval that contain special
limitations, recordkeeping and reporting requirements, and operational
conditions that the Executive Officer determines should apply to the project.
If the Executive Officer finds that an application does not meet the
requirements of section
95490(b), the
application will not be approved, the applicant will be notified in writing,
and the basis for the disapproval will be identified.
(e)
Reporting. Each CCS
project operator must submit to the Executive Officer the net amount of annual
sequestered CO2 and meet the reporting requirements in
accordance with the CCS Protocol.
(f)
Credit Review and
Issuance. Credits for direct air capture projects may be generated
quarterly or annually, at the discretion of the credit generating party.
(1) Upon the completion of reporting period
in which a positive or qualified positive verification statement for the
applicable Project R ports per section
95500(e) is
received, the Executive Officer will determine the number of credits to be
issued to the applicants. An adverse verification statement would result in no
credit issuance and Executive Officer investigation.
(g)
Recordkeeping. Pursuant
to section
95491.1 and the CCS Protocol, each
applicant that receives approval as a CCS credit generator must maintain
records for the CCS project, including records necessary to verify permanent
sequestration. At a minimum, the following records must be kept:
(1) The quarterly volume of alternative fuel,
petroleum fuel, crude oil/natural gas produced and delivered to
California;
(2) Energy use and
chemical use data for the carbon capture facility and
CO2 injection facility;
(3) The Accounting Protocol and Permanence
Protocol documents; and
(4) Any
additional records that the Executive Officer requires to be kept in pursuant
to section
95490(d)(3).
(h)
CO2
Leakage and Credit Invalidation.
(1)
Credits for verified greenhouse gas emission reductions can be invalidated if
the sequestered CO2 associated with them is released or
otherwise leaked to the atmosphere.
(2) The number of invalidated credits is
equal to the quantity of CO2 released or leaked from the
sequestration zone
(CO2leakage),
which must be determined in accordance with the CCS Protocol.
(3) Prior to 50 years post-injection:
(A) The Executive Officer may retire credits
from the buffer account, up to and including the project's total contribution,
to count toward the number of invalidated credits.
(B) The project operator must retire credits
for any balance after retiring credits pursuant to 95490(h)(3)(A).
(C) The Executive Officer may retire credits
from the buffer account equivalent to remaining outstanding balance after
retiring credits pursuant to 95490(h)(3)(A) and (B).
(4) After 50 years post-injection:
(A) The project operator is no longer
responsible to make up any credits found to be invalid due to
leakage.
(B) The Executive Officer
may retire credits from the buffer account to cover any credits found to be
invalid due to leakage.
1. New
section filed 1-4-2019; operative 1-4-2019 pursuant to Government Code section
11343.4(b)(3)
(Register 2019, No. 1). For prior history, see Register 2015, No.
47.
Note: Authority cited: Sections
38510,
38530,
38560,
38560.5,
38571,
38580,
39600,
39601,
41510,
41511
and
43018,
Health and Safety Code; 42
U.S.C. section 7545; and Western Oil and Gas
Ass'n v. Orange County Air Pollution Control District, 14 Cal.3d 411, 121
Cal.Rptr. 249 (1975). Reference: Sections
38501,
38510,
39515,
39516,
38571,
38580,
39000,
39001,
39002,
39003,
39515,
39516,
41510,
41511
and
43000,
Health and Safety Code; Section
25000.5,
Public Resources Code; and Western Oil and Gas Ass'n v. Orange County Air
Pollution Control District, 14 Cal.3d 411, 121 Cal.Rptr. 249
(1975).
