CCUS Licensing and Permitting Frameworks – Detailed Explanation With Case Laws

1. Meaning of CCUS Licensing and Permitting

CCUS (Carbon Capture, Utilisation and Storage) is a system for capturing carbon dioxide (CO₂) from industrial sources, transporting it through pipelines or other infrastructure, and either using it or storing it permanently underground.

A CCUS licensing and permitting framework determines what approvals are required before a CCUS project can be constructed and operated. It also determines which authority grants each approval, what technical and environmental conditions apply, and who remains responsible for the project after closure.

A complete CCUS project may involve:

capture facility → compression → pipeline → transport hub → injection well → geological storage → monitoring and verification.

Each stage can create different legal risks.

2. Why Licensing Is Necessary

CCUS involves potentially large industrial installations, high-pressure CO₂ transportation and underground injection. Therefore, regulation is needed to ensure:

environmental protection;

public safety;

geological-storage integrity;

pipeline safety;

proper monitoring;

prevention of leakage;

land-use compatibility;

community participation;

financial responsibility; and

long-term liability.

Licensing also prevents operators from beginning construction before the relevant environmental and technical risks have been assessed.

3. Environmental Authorisation in South Africa

The central environmental statute is the National Environmental Management Act 107 of 1998 (NEMA). NEMA establishes a framework for cooperative environmental governance and requires environmental impacts of listed activities to be assessed before the relevant activities commence. (Government of South Africa)

For a CCUS project, the exact permits required depend on the activities involved. A project may potentially require environmental authorisation for listed activities, together with other sector-specific approvals.

This is particularly important because a CCUS project may cross several regulatory areas rather than falling neatly under one statute.

4. Multiple Permits and Integrated Approval

One major legal issue is whether a CCUS developer should obtain numerous separate permits or whether government should create an integrated approval system.

NEMA recognises the possibility of coordination and integrated environmental authorisation where activities are regulated by different laws. (SAFLII)

A practical CCUS permitting pathway could therefore include:

preliminary site assessment;

environmental-impact assessment;

capture-facility approval;

pipeline and transport approval;

geological-storage approval;

water-related authorisation where applicable;

land-use approval;

monitoring and verification plan;

emergency-response plan;

financial-security arrangements; and

final operating and closure approval.

The objective should be administrative coordination without weakening environmental safeguards.

5. Maccsand and the Principle of Multiple Authorisations

The leading South African case is Maccsand (Pty) Ltd v City of Cape Town.

The Constitutional Court dealt with the relationship between mining rights, environmental authorisation and municipal land-use regulation. The Court recognised that obtaining one regulatory approval does not necessarily remove the obligation to obtain another approval required by a different legal framework. (SAFLII)

This principle is highly relevant to CCUS.

For example, receiving approval for a geological-storage activity would not necessarily mean that the operator automatically has every other permission needed for pipelines, land use, water impacts or environmental activities.

Maccsand therefore illustrates an important CCUS principle: one licence should not automatically be treated as a universal licence for the entire project.

6. Environmental Assessment and Precaution

CCUS regulators should examine both ordinary and low-probability risks, including:

CO₂ leakage;

groundwater contamination;

pipeline rupture;

induced geological effects;

accidental releases;

failure of monitoring equipment; and

long-term storage failure.

In MEC: Department of Agriculture, Conservation and Environment v HTF Developers, the Constitutional Court dealt with environmental protection and the regulation of development activities affecting sensitive environments. The judgment illustrates the importance of environmental-management principles and lawful regulatory intervention before potentially harmful activities proceed. (Saflii)

For CCUS, this supports careful environmental assessment before construction and injection.

7. Storage Licensing

The most important specialised permit should arguably be a geological-storage licence.

It should identify:

the approved storage formation;

permitted injection volume;

injection pressure;

monitoring requirements;

duration of the licence;

leakage-response obligations;

reporting duties;

financial security;

closure requirements; and

post-closure responsibilities.

The law should also determine whether storage rights are exclusive or whether multiple operators can use the same geological formation.

8. Pipeline and Transport Permits

CO₂ transportation creates another regulatory layer.

A pipeline permit or approval may address:

route selection;

land acquisition;

construction standards;

pressure levels;

emergency shut-off systems;

inspection and maintenance;

public safety;

third-party access; and

accident reporting.

Where a CCUS cluster has multiple industrial emitters, regulators may also need rules governing shared pipeline capacity and non-discriminatory access.

9. Long-Term Liability

One of the most difficult legal questions is who is responsible after CO₂ has been injected.

A good licensing framework should require the operator to demonstrate financial capacity before receiving approval.

It should also establish:

operator responsibility → monitoring → closure → post-closure monitoring → possible transfer of responsibility to a public authority.

The transfer should occur only after defined technical and environmental conditions have been satisfied.

10. Public Participation and Administrative Law

CCUS projects may affect landowners, communities and other users of natural resources. Therefore, licensing procedures should provide meaningful consultation and reasons for regulatory decisions.

The decision-maker must also act within the statutory framework. Regulatory discretion should be lawful, rational and procedurally fair.

This is important because CCUS projects may involve large investments, but economic importance does not remove environmental and administrative-law requirements.

11. South African Legal Development

South Africa's existing environmental legislation can provide important foundations for CCUS regulation, but a dedicated framework could provide greater certainty concerning CO₂ storage rights, transport regulation, monitoring, liability and post-closure responsibility.

NEMA already provides mechanisms for coordinating environmental functions and authorisations. (Government of South Africa) The challenge is to adapt those mechanisms to the distinctive characteristics of permanent carbon storage.

Conclusion

CCUS Licensing and Permitting Frameworks provide the legal structure through which carbon-capture, transportation and geological-storage projects are assessed and controlled.

The central principles are:

environmental assessment → technical approval → storage authorisation → transport approval → monitoring → financial security → closure → post-closure responsibility.

The Maccsand case is particularly important because it demonstrates that a regulatory approval under one legal regime does not necessarily eliminate separate authorisation requirements under another regime. (SAFLII) HTF Developers further illustrates the importance of environmental protection and regulatory control over potentially harmful development. (Saflii)

For future South African CCUS regulation, the preferred legal approach would be a coordinated and integrated permitting system, but one that preserves independent environmental, safety and public-participation safeguards. This would provide regulatory certainty to investors while maintaining the constitutional obligation to protect the environment.