Policymakers and industry must create a self-sustaining carbon capture and storage market if the UK is to meet its carbon storage targets, concludes a report by a team including ECI researchers.
The UK aims to capture 20mn-30mn tonnes of carbon dioxide a year by 2030 and store at least 50mn tonnes of CO₂ a year by the mid-2030s under its Industrial Decarbonisation Strategy. The government has already committed at least £21.7bn in subsidy support for CCS through contracts for difference and support mechanisms for de-risking capital, says the report.
On top of public funding, however, a minimum of £30bn of private capital by 2030 is needed to ensure the sector is self-sufficient, it adds.
Additional policy tools are necessary to grow the sector and drive private investment, say the team of researchers from research groups Oxford Net Zero and the Carbon Balance Initiative, which include Dr Stuart Jenkins, Research Fellow on Net Zero for the Fossil Fuel Sector, on the ECI’s Climate programme and Professor Myles Allen Climate Programme Lead, and Professor of Geosystem Science Climate programme.
UK CCS policy plans rely on using carbon pricing through the UK Emissions Trading System to scale the industry, but this is “unlikely to drive sufficient carbon storage development”, their report states.
The researchers recommend the introduction of a “carbon takeback obligation”, requiring fossil fuel suppliers to store permanently a rising percentage of their CO₂ emissions. The mandate would ensure the UK meets its carbon storage targets while reducing the need for public funding.
“Our research shows that, with the right policy design, the government could create a clear investment case for CCS and [greenhouse gas removal] without pushing the costs for CO₂ clean-up on to taxpayers,” said report author and Carbon Balance Initiative Executive Director Ingrid Sundvor.
Carbon pricing could play a role as a complementary demand-side measure, the report adds.
As a follow-up to the report, Oxford Net Zero and the Carbon Balance Initiative will develop a quantitative model for a carbon storage mandate using insights from experts in government, academia, industry and civil society.
Read the report in full: Markets & Mandates: Policy Scenarios for UK CCS Deployment & Exploring the Role of a Carbon Takeback Obligation
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