(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.Cal. Code Regs. Tit. 17, § 95490
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).
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.