Carbon capture and storage (CCS) involves the trapping of man-made CO2 underground in order to avoid its release into the atmosphere. Because of the scale with which it could be applied, CCS is identified as a critical technology to reduce CO2 emissions to achieve global climate goals. The Intergovernmental Panel on Climate Change (IPCC, 2018) shows that most of the 1.5oC pathways assume significant CCS. Also, in a recent paper, we argued that CCS could play a central role in oil and gas exporters’ low-emissions development strategies. The deployment of CCS could provide them with an opportunity to continue to monetise their reserves while meeting climate goals and retain the competitiveness of their oil and gas sectors and energy intensive industries in a net-zero emissions world. CCS is climate mitigation action which caters to the assets (in terms of geological storage capacities and existing infrastructure) and the technical skills (i.e., expertise in subsurface technology) of oil and gas producers.
While investing in CCS reduces margins and increases the complexity of the current business strategies of oil and gas exporters, it also increases the resilience and competitiveness of a strategic sector at times when the world is transitioning to net-zero emissions. Since the benefit of reduced emission accrues to all the stakeholders along the oil and gas supply chain, it is reasonable that the cost for large-scale CCS deployment should be shared. The common global goal of avoiding the dangerous impacts of climate change means that the cost of CCS should be shared between producers and end users, rather than be focused on one or the other resulting in, probably, sub-optimal deployment of the technology. Given the international dimension of the oil and gas business, it is therefore imperative that policies and mechanisms are put in place to generate revenue for CCS deployment that would offset part of the associated costs. A key role here falls to the Paris Agreement which offers many opportunities for collaboration either through bilateral or multilateral initiatives including the creation of clubs with common interests. The challenge is to create effective incentive schemes to turn these opportunities into actions.