Advocates for widespread commercialization of carbon capture and sequestration (CCS) technologies say an agreement on so-called Article 6 rules for emissions trading at the upcoming United Nations climate talks in Glasgow, Scotland, would be a major breakthrough for carbon markets that could spur key investment in CCS.
“It has been said that the toughest of talks will be the Articles 6 negotiations and an agreement on a market-based mechanism,” said Lee Beck, Clean Air Task Force’s director for international carbon capture, in an exclusive interview with Inside EPA’s Climate Extra.
She added that a deal on such rules would broadly send a signal to markets about the need to reduce emissions, and more specifically bolster the use of CCS technologies to achieve such goals.
“I think they're incredibly important to send signals today that we're moving to a lower-carbon world with structured carbon markets where technologies can be used and deployed to deliver an impact through these markets,” Beck said, adding: “So as a signal, as a political signal, it's incredibly important.”
At issue are still-pending rules to implement Article 6 of the 2015 Paris Agreement, which discusses “cooperation” among countries and other entities. This issue is the last major outstanding portion of the Paris deal’s “rulebook.”
Negotiators from key countries have previously stressed the need to complete a deal on the trading rules, arguing failure to reach agreement threatens the ambition of countries’ climate efforts and the integrity of claimed emissions cuts.
Supporters say CCS technologies are a sort of bridge policy that allow fossil fuel-dependent countries and energy-intense industries, such as steel and cement manufacturing, to more easily transition to a net-zero emissions economy which is the ultimate goal of the Paris agreement.
“I think what’s most pressing here is the accounting rules for carbon capture and carbon removal,” Beck said. “It’s unclear what the accounting framework looks like and, of course, we need to guard against double counting,” she added.
Resolving these issues in Glasgow “would provide clarity for investors. . . looking to deploy these technologies,” she said.
World Resources Institute’s Angela Anderson, who also works on CCS issues, told Climate Extra that “having global rules that would facilitate credit trading would certainly set the stage for a global market signal for industry that could be very helpful…and would go a long way in terms of just financing the kind of transformational change we need to happen at these industrial facilities.”
She added: “One of the most important things about the negotiations and actions on carbon capture, as well as carbon dioxide removal, is really a lot more awareness-building among the countries” about the availability of technological solutions to meeting tougher emission reduction goals.
In the United States, Congress is developing “more government incentives to move in that direction,” even while there continues to be debate about whether “that’s good for the U.S.,” she said.
While CCS “may not be what's best for all countries,” as countries “ratchet down” their greenhouse gas targets, “these are the tools that are at their disposal to reduce industrial emissions as well.”
Uneven Deployment
The Global CCS Institute says the use of CCS technologies is uneven globally that that worldwide carbon trading standards would help to broaden the appeal of such technologies.
“The most relevant negotiation stream for the CCS community is Article 6, which governs voluntary cooperation between countries to meet emissions reduction targets,” says the institute’s Oct. 13 “Status of CCS” report.
The potential for GHG reductions and removals “is not evenly spread,” the report says. “A global response, helping countries do this cooperatively, can lead to greater joint ambition for global climate change mitigation,” the report adds.
Also, the group says access to CO2 storage “is not evenly distributed,” adding that carbon markets can encourage “developing CCS projects around the world to produce emission reductions and/or removals.” Carbon credits “can be used by host countries, or sold to others, to help meet climate targets.”
Overall, the CCS group says widespread deployment of the technology would make it easier for countries to commit to more ambitious GHG goals, as evidenced by the fact that more than a dozen countries have included CCS in their formal targets under the Paris Agreement. Those countries include the United States, Canada, China, Iran, Norway and Saudi Arabia, which are all energy exporters.
Yet, carbon markets alone are not enough to drive widespread use of CCS, Beck said. Despite the important political and market signals from an agreement on Article 6 rules, “how much impact it will have on the deployment in the near term is questionable,” Beck added.
She added that widespread deployment of CCS is dependent on “innovation” policy, which in the United States includes tax incentives for the buildout of projects, and grants or loans for infrastructure investments such as pipelines for transporting captured CO2 to storage sites.
“From our perspective, it’s really important to have technology-specific innovation policy to meet these objectives,” such as the buildout of facilities and pipelines, “and then carbon markets can help deploy these technologies once their commercialized,” Beck said.
The Biden administration supports extended and expanded tax credits for CCS, and provisions to do so are included in both a Senate-passed bipartisan infrastructure deal, and Democrats’ emerging budget “reconciliation” package.
On the latter bill, President Joe Biden on Oct. 28 announced a “framework” agreement for a $1.75 billion package before heading off to Europe for the G-20 economic meeting and Glasgow climate talks.
The House Rules Committee also released draft text for such a bill, which the Carbon Capture Coalition strongly endorsed. “These measures, coupled with provisions already included in bipartisan infrastructure legislation, are essential to decarbonizing hard-to-abate sectors and putting American industry on a path to net-zero emissions,” the coalition said in an Oct. 28 statement. -- Rick Weber (rweber@iwpnews.com)
