Scaling CCUS needs a price for carbon
Finding the optimal balance between incentives and disincentives is one of the biggest challenges policymakers face. To scale CCUS in a meaningful way, the costs of emitting carbon must be more than the costs of capturing and storing it. That isn’t possible without either taxes or subsidies, while emissions trading schemes and carbon credits provide an additional boost.
Governments also have to find time in legislative schedules for supportive CCUS regulation designed to limit investor liability in the short and long term, and to streamline the granting of permits and licences.
There is, nevertheless, momentum on this front. A number of Asian countries – among them Indonesia – are moving towards a regulatory framework for CCUS, with existing oil and gas and mining regulations often serving as a template.
For its part, Japan has progressed a pilot CCUS scheme using a cocktail of existing legislation but has acknowledged that CCUS-specific laws will be required in the future.
International collaboration crucial to provide consistent incentives
What else is needed for Asia to take its CCUS ambitions forward? International collaboration is crucial to provide regional – and, ideally, global – consistency around incentives, taxes and carbon trading schemes.
Government collaboration will also be necessary to support the creation of infrastructure to move CO2 across borders for storage.
The establishment of the Asia CCUS Network last year was an acknowledgement of the need for international collaboration. Efforts around regulation and incentivisation in the region now need to be solidified and accelerated.
*Principal Consultant, Policy, Legal and Regulatory at the Global CCS Institute.
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