Carbon Capture, Utilisation, and Storage (CCUS) is hailed as a critical technology for reducing greenhouse gas emissions, particularly in hard-to-abate sectors such as heavy industry and fossil fuel-based power generation. However, its implementation requires robust regulatory frameworks to ensure safety, environmental protection, and effectiveness.
Many are still not fully aware of CCUS. In fact, some even claim it is a ploy by fossil fuel interests to derail the call to phase out fossil fuels altogether. What has become clear is that CCUS does offer plausible mitigation solutions, though environmentalists warn of its potential risks. Its execution calls for a strong legal framework not only to incentivise deployment but also to safeguard the environment.
To deliver CCUS effectively, carbon pricing mechanisms must be introduced, for example, through a carbon tax or emissions trading schemes. Implementing a carbon price would incentivise industries to adopt CCUS by making it economically viable compared to paying for carbon emissions. Carbon credits for CCUS could allow companies to earn tradable credits for captured and stored carbon dioxide (CO₂), creating a financial incentive for investment in CCUS projects.
Next are legal frameworks for CO₂ storage. There must be clear ownership and liability rules. For example, regulations must define who owns the CO₂ once it is captured and stored, and establish long-term liability frameworks for storage sites to address potential leaks or environmental damage.
Choosing a storage site must require rigorous selection, characterisation, and monitoring to ensure safe and permanent CO₂ storage. Standards such as those developed by the International Organisation for Standardisation (ISO) for CCUS operations should be adopted.
Mandatory monitoring, reporting, and verification (MRV) systems are also essential. Companies should be required to monitor, report, and verify the amount of CO₂ captured, transported, and stored to ensure transparency and accountability. Third-party audits, involving independent verification of CCUS projects, are necessary to ensure compliance with regulations and to prevent greenwashing.
It is also useful to provide tax incentives, such as the US 45Q Tax Credit, which offers financial support per tonne of CO₂ captured and stored. Direct funding for research, development, and deployment of CCUS technologies is encouraged, alongside collaboration between governments and private entities to share risks and costs.
Infrastructure development regulations are also important. These should cover the safe construction and operation of pipelines and other transport infrastructure for CO₂. International agreements must be developed to facilitate the cross-border transport of carbon dioxide for storage in suitable geological formations.
Environmental and safety standards must be strictly enforced to prevent CO₂ leaks during capture, transport, and storage. Comprehensive Environmental Impact Assessments should be required for CCUS projects to evaluate potential risks to ecosystems and communities. The development of emergency response plans for potential accidents or leaks must be mandated.
Public engagement and transparency are equally vital. Project developers should engage with local communities and stakeholders to address concerns and build public support. Data on CCUS project performance and environmental impacts should be made publicly accessible.
There is also a need to strengthen international cooperation through agreements such as the Paris Agreement, to promote CCUS as a climate mitigation tool. Governments should facilitate the sharing of CCUS technologies and best practices between countries, especially to support developing nations.
Research and development (R&D) support is critical. Grants and subsidies should be provided to improve CCUS technologies and reduce costs. Support for pilot and demonstration projects is also necessary to test and scale up new CCUS technologies.
Finally, CCUS must be integrated with broader climate policies. Regulations should align with national and international climate targets, such as achieving net-zero emissions by 2050. Tailored regulations should be developed for industries such as cement, steel, and chemicals, where CCUS may be the most viable decarbonisation option.
There are challenges in regulating CCUS. Projects are capital-intensive, and regulations must balance environmental goals with economic feasibility. Governments may need to assume liability for stored CO₂ after a certain period to encourage private investment. Addressing public concerns about safety and environmental risks is crucial for the successful deployment of CCUS.
By implementing these regulations and policies, governments can create an enabling environment for CCUS deployment, ensuring it contributes effectively to global climate goals while minimising risks. Malaysia has recently endorsed an Act on CCUS to ensure this emission reduction option truly delivers.
The views expressed here are the personal opinion of the writer and do not necessarily represent that of Twentytwo13.
