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19 min ago 3 min read
Fossil fuel producers determine the volume of carbon that enters the economy and should foot the bill for carbon capture utilisation and storage (CCUS) infrastructure funding, according to a new paper from UK think tank The Institute for Public Policy Research (IPPR).
It argues the current model treats taxpayers and industrial emitters as the primary obligated party – yet they are removed from the source of the problem – and believes extending the obligation upstream distributes costs more fairly across the value chain.
An extended producer responsibility (EPR) framework addresses this unfair burden by broadening the obligation beyond industrial emitters to the organisations supplying their fuel, the IPPR adds.
With an upstream carbon management system, such as a carbon takeback obligation, producers would be required to ensure that a defined and rising proportion of the carbon embedded in their fuels is permanently stored.
The UK government has committed £22bn to CCUS over the last 25 years.
But the 2025 sits inside a constrained fiscal envelope which has tightened. CCUS is in the Treasury’s sights as the government needs to find a further £2bn of savings by 2030.
“With CCUS now competing directly with the government’s declared first fiscal priority, the case for a funding model that isn’t reliant on subsidy have never been stronger,” the IPPR states.
CCUS is advancing in funding and deployment across the UK and Europe , according to Carbon Capture and Storage Association CEO Olivia Powis.
The UK government will soon decide the fates of the Jackdaw and Rosebank gas and oil fields. Consents for both fields were previously quashed by the courts for failing to account for the climate impact of the fuel once burned.
“An EPR-style approach would reframe the decision,” the IPPR states. “These licenses could be made conditional on developers storing a proportion of CO2 from the fuels produced. They could do this themselves or pay a small levy which government would use to cover the cost of its CCUS investment, freeing up fiscal space for other investments like electrification.”
It concludes the current opportunities could be a ‘quadruple win’: satisfying energy security arguments for drilling, reducing emissions, channelling capital into the infrastructure that will be needed to replace oil and gas jobs as the North Sea basin winds down, and, most importantly, freeing up government and billpayer capital for clean electrification projects that will reduce bills.
Leading academics have called for for continued fossil fuel extraction in the North Sea.
Click to read the gasworld Global CCUS and Blue Hydrogen August issue
