In other to guarantee that we build enough CO2 storage by the time of net zero, extractors and importers of fossil fuels are required to permanently store a percentage of the CO2 generated by the products they sell. This is called a Carbon Takeback Obligation (CTBO).

Over time, as levels of cumulative emissions monotonically increase, the CTBO will increase. Based on current projections, the CTBO could start at ~1% in 2023 before increasing to 10% in 2030 and reaching 100% (which means net zero emissions) by 2050. Companies need can store CO2 themselves or they can purchase CO2 storage capacity with third-parties. We envisage the growth of a marketplace, based around tradable certificates of storage, significantly reducing costs. The idea is that this will also incentivise development and growth of long-term CO2 transport and storage networks. But importantly, we will only develop as much as we need to reach net zero, because this is a mandate and condition for operating as a fossil fuel extractor or importer.

The stored CO2 could initially come from factories, refineries and cement plants. Once these have all been tapped, getting to 100% storage would mean recapturing CO2 from the atmosphere. The latter would ensure the deployment of removal technologies such as direct air capture.

The Carbon Balance Initiative collaborates with academics, governments, NGOs and other stakeholders to evaluate and develop the various policy design choices of a Carbon Takeback Obligation. There are a wide variety of decisions to be considered, including who should be obligated, determining the inclusion of products/entities/jurisdictions, specifying acceptable CO2 sources and stores for compliance and how to establish governance mechanisms.