January 12, 2023

expert reaction to study of making fossil fuel companies responsible for carbon

A study published in Environmental Research Letters looks at the potential of extended producer responsibility (EPR) policy for fossil fuels.

This Roundup accompanied an SMC Briefing.

Prof Stuart Haszeldine, Professor of Carbon Capture and Storage at the University of Edinburgh, said:

“There are only two ways to prevent ever increasing global heating from fossil fuels and bio-energy – either stop producing fossil hydrocarbons immediately, which is societally unacceptable, or ensure that all the carbon used in fuels and feedstocks and cement is permanently stored and returned underground from where it originated.

“The benefits of fossil fuel energy storage, cheap cost and portability can be disconnected from the climate warming penalties.

“Mandatory storage of carbon provides a pathway to commercially feasible storage, means less government effort, and a cheaper price for consumers, which arrives safely at the required 2050 Net Zero date.”

Prof Geoffrey Maitland FREng, Professor of Energy Engineering at Imperial College London, said:

“The paper on Extended Producer Responsibility (EPR) by Jenkins et al is an important contribution to the energy transition policy debate.  It accepts the reality, often ignored or dismissed as unacceptable, that to meet global energy and consumer products/materials demand and maintain quality of life, we will need to continue to use fossil fuels (to a decreasing but significant extent) for much of this century.  The only way we can do this and still meet the challenging 2050 net-zero carbon emissions target is to prevent the CO2 arising from their use reaching the atmosphere, or to remove it, by every available means – Carbon Capture, Utilisation and Storage (CCUS) and Greenhouse Gas Removal (GGR, both Nature Based and Engineered solutions).  The technical solutions exist and, as the paper says, fossil fuels do not therefore need to cause global warming.  This truism is particularly important to understand in the current global situation where countries are scrambling to improve their energy security by increasing domestic production of fossil fuels where possible or importing LNG from across the world, seemingly in conflict with national and global climate goals.

“The problem is that the scale and rate of CCUS commercial build falls far below that needed to capture all the CO2 from fossil fuel production and use, estimated to be at least 10Gt pa globally by 2050, even with increasing renewables and energy efficiency measures.  A major factor in this is that no one is directly responsible for making sure that the required infrastructure at affordable cost is being put in place.  The price of carbon through taxes and trading schemes is too low to drive the change quickly and whilst some fossil fuel companies are claiming to commit to achieving net-zero by 2050, including the scope 3 emissions of their product users, the responsibility for removing fossil fuel emissions is spread too thinly and vaguely across governments, the fossil fuel producers and engineering companies who see commercial opportunities in CCUS and GGR.

“The press release is a very good summary of the key aspects of the paper and a fair description of the novel aspects of this research and its critical messages. The paper proposes that the EPR principle should be applied to fossil fuel companies through a Carbon Takeback Obligation regulation (CTBO) which requires them to store or remove the CO2 generated by the production and use of their products to an extent that reaches 100% by 2050.  This is exactly the type of approach the UK, and now most of the world, takes in managing Health and Safety risks – the risk creator is responsible for mitigating that risk – here, the polluter pays.  The sector has to decide how much of that cost to absorb themselves to maintain their business and how much to pass onto manufacturers that use their products and to us, the ultimate consumers, who are the ones who actually benefit from the use of fossil fuels but currently make little contribution to the cost of decarbonising energy and products, other than through voluntary lifestyle choices. 

“One key feature of the paper is that the authors emphasise the need for CTBO to be complementary to other decarbonisation measures such as increasing renewables use as fast as possible, changing to biomass feedstocks for consumer products, accelerating demand management and energy efficiency measures and alternative policy drivers like carbon charges.  They also emphasise the key role to be played by Nature-based Solutions (NbS) for CO2 removal from the atmosphere as an important part of a CTBO.  Furthermore, unlike other proposals to go down this route, this paper reports the results of good quality modelling based on well-accepted climate mitigation scenarios and integrated assessment models, backed up by realistic data and sound reasoning, to quantify the impact that adoption of CTBO + NbS would have on the rate of fossil fuel decarbonisation, the costs of decarbonisation and the effective carbon price.  The authors also test the robustness of the approach to changes in assumptions about costs and the effectiveness of complementary measures such as demand reduction.  They demonstrate effectively that such a regulation would both accelerate the decarbonisation of fossil fuels compared to current conventional policies, which set targets for CCUS-GGR but are weak on enabling mechanisms, and would achieve this at lower cost.  As the paper points out, fossil fuel companies have the technical expertise and financial resources to lead and achieve all this, though the involvement of government, other engineering companies and users to manage the risks involved, ensure wide stakeholder commitment, and develop workable business models will continue to be essential.

“The paper makes an important contribution by showing how EPR for fossil fuels through a CTBO can decouple addressing energy security (now and in the future, whatever the disruption to the energy markets) through continuing to use fossil fuels alongside renewables from a continued (and accelerated) national and global commitment to continued decarbonisation and achieving net-zero emissions by 2050.  The approach is based on three key premises: that the real cost of fossil fuels needs to include the cost of decarbonising them, that fossil fuel producers need to recognise this and take lead responsibility for achieving this on an accelerated timescale and that it should be the polluter who pays…the fossil fuel producers and the users, both energy and product producers and ourselves, the end consumers.  This not only addresses the need for rapid installation and increasing CCS + NbS process with time but will also increase over time the price of fossil fuel products to reflect their real cost and so accelerate the adoption of renewables and products manufactured from sustainable biofeedstocks as we approach 2050.”

Prof Martin Blunt FREng, Department of Earth Science and Engineering, Imperial College London, said:

“This is excellent and the press release is accurate.

“The paper identifies the current energy and climate trilemma: how to provide reliable energy, minimizing consumer prices, while addressing the threat of climate change.  The three problems are conflicting, as is apparent from the current energy crisis sparked by the Russian invasion of Ukraine: Germany, for instance, is opening new coal mines and extending the life of coal-fired power stations in direct conflict with climate goals.

“How can we break the competition between continued – and often increased – fossil fuel exploitation to provide abundant cheap energy and preventing dangerous climate change?  While many ideas have been tried, including carbon pricing, windfall taxes on energy companies, and fuel cost subsidies, none of these have enabled an automatic pathway to net zero.

“The authors of this timely and important paper propose a framework that breaks the conflict between fossil fuel producers and climate goals:  any fossil fuel production has to be matched by a carbon-equivalent amount of permanent subsurface carbon dioxide storage.  Initially, this would be a legally binding commitment to permanently store a fraction of the carbon dioxide produced when the fossil fuels are burnt, with the fraction rising to 100% by 2050.  The responsibility for making fossil-fuel production essentially carbon neutral is placed with the companies that produce the fuel in the first place.  Oil and gas companies also have the technology and infrastructure to implement geological carbon dioxide storage.

“This proposal is the only way that the fossil fuel industry can become truly carbon neutral.  Without this plan, we are likely to miss climate targets, as the immediate pressure to provide energy prompts continued fossil fuel use.  Furthermore, rather than providing security of supply, we may otherwise become increasingly dependent on a few national oil companies – a risky strategy that has demonstrably led to catastrophe with regards to Russia.

“This plan does require coordinated international action, a clear monitoring regimes, and rigorous sanctions if the amount of carbon dioxide storage  is insufficient.  Many companies have plans to store carbon dioxide, but the reality has fallen short in several cases.”

Dr Hannah Chalmers, Reader in Sustainable Energy Systems at the University of Edinburgh, said:

“Introducing an extended producer responsibility for fossil fuels would be a game-changer in successfully responding to the challenge of delivering affordable, low carbon energy.

“Geological storage of carbon dioxide is likely to play an important role in reaching net zero emissions by 2050.  Implementing a Carbon Takeback Obligation (CTBO) in key regions would ensure that sufficient funding is available for scaling up geological storage of carbon dioxide at the right scale to meet global climate policy goals.  The CTBO also ensures that the right organisations are responsible for financing deployment of geological storage of carbon dioxide.”

Dr Robin Lamboll, Research Associate in Climate Science and Policy, Imperial College London, said:

“The proposal highlights the importance of early investment in carbon capture technology to scale it up, however there are several problems with the scenario it presents.

“A carbon take-back obligation would be similar to a high carbon tax, except that none of the money raised can be redistributed or invested in other technology. While poor people use less energy than the rich, they spend a higher fraction of their income buying it, so will feel this price rise more strongly. In this scenario, all of the money is locked into storing the carbon, so there is no cost-neutral way to mitigate the impact of this policy on the poorest. By contrast, in other scenarios carbon taxes can be given out as rebates or reinvested in clean energy to drive down energy bills. This silver-bullet scenario relies on technologies currently at exploratory stages with a track record of frequent failure.

“The prospect of forcing fossil fuel companies to clean up after themselves is very appealing, but it is unlikely they will simply swallow the vast costs, and the proposal does little to remove their stranglehold over energy provision.”

Prof Paul Ekins, Professor of Resources and Environmental Policy at the UCL Institute for Sustainable Resources, said:

“With the 1.5C target, according to the UN Secretary-General, on ‘life-support’ after COP27¹, there is an urgent need for radical new CO2 emission reduction policies. The Carbon Take-Back Obligation proposed provides a means to get built the substantial carbon capture and storage infrastructure that nearly all models say will be needed if the 1.5C target is to be met. The COP meetings need urgently to start discussing such measures before the target gets irrevocably out of reach.”

¹ https://news.un.org/en/story/2022/09/1127381

Dr Greg Mutch, Royal Academy of Engineering Research Fellow, School of Engineering, Newcastle University, said:

“A large-scale portfolio of approaches to carbon dioxide capture, removal, and storage is needed to mitigate global warming and meet international climate change agreements. Development and implementation of this portfolio will require financial and policy frameworks that are robust and practical. One potential framework is presented in “Extended producer responsibility for fossil fuels” by Jenkins et al.

“An existing, and perhaps familiar, example of Extended Producer Responsibility (EPR) in the UK today is, “The Waste Electrical and Electronic Equipment Regulations 2013”, which obliges producers of electronic goods sold into the UK market to pay towards the costs of their recycling. The principle of this (and any) EPR policy is that the producer is responsible for the environmental impacts of their products at ‘end of life’. In the work of Jenkins et al. the EPR approach explored takes the form of a ‘Carbon Takeback Obligation’ (CTBO), which focusses on the ‘end of life’ of fossil fuels, i.e., carbon dioxide emissions.

“There are two sides to the fossil fuel problem – supply and demand (where supply pertains to fossil fuel producers, and demand pertains to fossil fuel users). Conventional policies are aimed at reducing demand for fossil fuels by users, allocating a cost to carbon dioxide emissions. Users therefore have a choice: absorb, mitigate, or pass on the additional costs. The issue with such conventional policies is that they simply make polluting more expensive; they do not directly incentivise (or oblige) the development and implementation of a large-scale portfolio of approaches to carbon dioxide capture, removal, and storage (which, as stated above, is needed to mitigate global warming and meet international climate change agreements). A CTBO like that proposed by Jenkins et al. instead targets the supply side of the equation, by making producers responsible for removing and storing an amount of carbon dioxide equivalent to that which will be produced at the ‘end of life’ of fossil fuels. The choices for fossil fuel producers therefore become the same as those above for fossil fuel users (absorb, mitigate, or pass on the additional costs), but there is the additional benefit of a direct incentive (or obligation) to develop and implement a large-scale portfolio of approaches to carbon dioxide capture, removal, and storage.

“In summary, financial and policy frameworks based on a CTBO approach are pragmatic, as the inevitable increase in costs associated with fossil fuels in a ‘climate-conscious world’ is predictable (the CTBO increases predictably with time). Moreover, a CTBO is efficient, shrewd, and practical; the overall costs are comparable to, or lower than, those associated with conventional policy, there is an additional direct incentive (or obligation) to develop and implement a large-scale portfolio of approaches to carbon dioxide capture, removal, and storage, and this incentive is directed at those with the means to do so (i.e., fossil fuel producers). At a time when fossil fuel producers are making record profits, a CTBO may also be more effective than e.g., windfall taxes, in terms of providing national security (energy and economic) and an incentive for fossil fuel producers to innovate and provide jobs for the future. Thus, a CTBO is potentially socio-politically appealing, and lastly, just; costs associated with carbon dioxide capture, removal, and storage are focussed (at least initially) where the greatest share of profits associated with fossil fuels are made.”

Dr Mutch’s additional responses to SMC questions:

Does the press release accurately reflect the research?

Yes.

Is this good quality research? Are the conclusions backed up by solid data and reasoning?

Yes.

How does this work fit with the existing evidence?

It builds upon current climate policy (e.g., Paris Agreement) and evidence (e.g., IPCC AR6), to develop new financial and policy frameworks to achieve net-zero.

Does this represent a way forward? Could forcing producers to pay for carbon removal help us get to net zero and meet the Paris targets when other strategies seem to be failing?

Yes, I believe so. It tackles some of the major limitations of conventional policy approaches, particularly in terms of providing a direct incentive to develop and implement a large-scale portfolio of approaches to carbon dioxide capture, removal, and storage.

What are the implications in the real world? Is there any overspeculation?

The main implication is that fossil fuel producers would become responsible for the carbon dioxide emissions of their products at ‘end of life’. There is no overspeculation, but there may be objections to the approach by those with alternative viewpoints.

‘Extended producer responsibility for fossil fuels’ by Stuart Jenkins et al. was published in Environmental Research Letters at 00.01 UK time on Thursday 12 January.

DOI: https://doi.org/10.1088/1748-9326/aca4e8

Declared interests

Prof Stuart Haszeldine was a co-author on the preliminary scoping study in 2021.

Prof Geoffrey Maitland: “I worked for oilfield services company Schlumberger 1985-2005.  My research at Imperial College London since 2005 has been mainly developing on robust and lower cost carbon capture and storage processes and has been funded by Shell and, in part, Qatar Petroleum.”

Prof Martin Blunt: “I receive funding from the oil industry to work on topics related to the energy transition.”

Dr Hannah Chalmers: “I am an academic member of UK CCS Research Centre and SCCS (Scottish Carbon Capture and Storage).  I am responding in a personal capacity and am not representing either of these organisations.”

Prof Paul Ekins: “I am part of the UKRI funded consortium the CO2RE hub, which focuses on carbon removal from the atmosphere.”

Dr Greg Mutch: “I am funded by the Engineering & Physical Sciences Research Council and Royal Academy of Engineering to develop new, engineered carbon dioxide capture and removal technologies. I have no commercial interests.”

For all other experts, no reply to our request for DOIs was received.