CCUS Cluster Licensing and Regulatory Approval Systems – Detailed Explanation With Case Laws

1. Meaning of CCUS Clusters

CCUS (Carbon Capture, Utilisation and Storage) is a system in which carbon dioxide (CO₂) is captured from industrial facilities, transported through pipelines or other infrastructure, and then either used in industrial processes or permanently stored underground.

A CCUS cluster is a larger integrated system where several emitters use shared infrastructure. For example:

Power plant + steel factory + cement plant → shared CO₂ pipeline → collection hub → transport network → geological storage site.

The advantage is that individual industries do not need to develop completely separate pipelines, storage facilities and monitoring systems.

However, clustering creates a difficult regulatory question: one project may involve many operators, landowners, pipelines, capture plants, storage reservoirs and regulatory authorities. A coordinated licensing system is therefore necessary.

2. Main Elements of a CCUS Licensing System

A comprehensive framework normally requires several approvals.

A. Capture Facility Approval

The industrial facility capturing CO₂ may require environmental authorisation, air-emission approval and other sector-specific permissions. The regulator must examine emissions, energy use, pollution risks and the safety of the capture technology.

B. Transport Licence or Approval

CO₂ pipelines create their own regulatory issues involving:

pipeline construction;

land access;

safety standards;

pressure management;

route approval;

third-party access; and

emergency response.

A cluster framework should ideally establish common technical and safety standards for the entire transport network.

C. Storage-Site Licence

The storage reservoir is the most sensitive part of CCUS regulation. Authorities must determine:

whether the geological formation is suitable;

whether CO₂ can remain permanently underground;

whether groundwater could be affected;

whether leakage could occur;

who owns or controls the subsurface resource;

how monitoring will occur; and

who remains responsible after injection ends.

South Africa has previously considered using the National Environmental Management Act (NEMA), National Environmental Management: Waste Act and Mineral and Petroleum Resources Development Act (MPRDA) as foundations for a CCS regulatory framework. Government documents specifically identified these laws in the development of South Africa's CCS legal framework. (Mineral Resources and Energy)

3. South African Regulatory Framework

South Africa does not yet have a fully developed, dedicated CCUS licensing regime equivalent to a mature standalone CCS statute. Consequently, CCUS projects may involve several existing regulatory frameworks.

NEMA establishes principles of cooperative environmental governance and environmental decision-making. (Government of South Africa)

The MPRDA regulates access to and sustainable development of mineral and petroleum resources. (Government of South Africa)

Environmental authorisation is particularly important because large CCUS projects can involve pipelines, industrial installations, drilling and underground injection.

The principle that listed activities cannot simply begin without environmental authorisation was considered in City of Cape Town v Maccsand (Pty) Ltd. The court explained the importance of environmental authorisation for activities regulated under NEMA. (SAFLII)

4. Cluster-Level Approval

A major legal problem is whether each component should receive a separate licence or whether authorities should create a single integrated approval for the whole cluster.

A coordinated system could involve:

preliminary site assessment;

capture-facility approval;

pipeline approval;

storage-site approval;

environmental assessment;

monitoring and verification plan;

emergency-response plan;

financial-security arrangements; and

final operating approval.

This approach can reduce duplication while maintaining environmental safeguards.

However, one integrated approval must not eliminate legally required consultations or environmental assessments.

5. Environmental Protection and Public Participation

CCUS storage involves long-term environmental risks. CO₂ leakage could potentially affect groundwater, soil, ecosystems or human health.

In MEC: Department of Agriculture, Conservation and Environment v HTF Developers, the Constitutional Court emphasised the importance of interpreting environmental legislation in light of section 24 of the Constitution and NEMA's environmental-management principles. (SAFLII)

This is highly relevant to CCUS. Regulatory approval should therefore consider not only economic benefits but also intergenerational environmental protection, ecological sustainability and potential long-term risks.

6. Liability for Leakage

One of the most important issues is long-term liability.

Suppose a company injects CO₂ underground and the operator later discovers leakage. The legal system must determine:

Who pays for remediation?

Does liability remain with the original operator?

Can liability transfer to the State?

What happens after the operator becomes insolvent?

How long must monitoring continue?

Who is responsible after closure?

A strong licensing system should require financial security, monitoring obligations and closure plans before injection begins.

The recent Topigs Norsvin v Eskom litigation illustrates the importance of enforceable environmental conditions attached to major infrastructure projects. In 2026, the Supreme Court of Appeal confirmed legal duties concerning compliance with environmental authorisations, environmental management programmes and water-use requirements associated with the Kusile Power Station. (SAFLII)

Although the case was not about CCUS, it provides a useful example of how environmental authorisation conditions can create enforceable obligations for major energy infrastructure.

7. Third-Party Access and Shared Infrastructure

CCUS clusters raise competition and access questions. If one company controls the only pipeline or storage facility, other emitters may depend upon that infrastructure.

Therefore, regulations may need:

non-discriminatory access;

transparent tariffs;

capacity-allocation rules;

connection procedures;

dispute-resolution mechanisms; and

regulator oversight.

The objective is to prevent a technically necessary shared facility from becoming an unnecessary barrier to new CCUS participants.

8. Monitoring, Verification and Closure

CCUS licensing should continue throughout the entire project lifecycle:

Planning → construction → injection → monitoring → closure → post-closure monitoring.

Operators should measure the quantity of CO₂ injected, monitor the storage formation, detect leakage and maintain reliable records.

The regulator should have powers to inspect facilities, require corrective measures, impose sanctions and suspend operations where serious environmental risks arise.

Conclusion

CCUS Cluster Licensing and Regulatory Approval Systems provide a legal structure for coordinating multiple carbon-capture facilities, shared transport infrastructure and geological storage sites. The central regulatory challenge is to combine efficient cluster development with environmental protection, public participation, safety, monitoring, financial security and long-term liability.

South Africa's existing framework relies significantly on environmental and resource legislation, particularly NEMA and the MPRDA, while dedicated CCUS regulation continues to develop. (Government of South Africa)

The cases Maccsand, HTF Developers, and Topigs Norsvin v Eskom are not direct CCUS cases, but they provide useful principles concerning environmental authorisation, constitutional environmental protection and compliance with conditions attached to major infrastructure approvals.

A strong future CCUS framework should therefore create one coordinated regulatory pathway, while preserving separate technical safeguards for capture, transportation and geological storage.