Markets & Mandates: Policies for scaling CCS in the UK
Title: Markets & Mandates – Policy Scenarios for UK CCS Deployment & Exploring the Role of a Carbon Takeback Obligation
Published: January 21, 2025
Written by Mirte Boot, Ingrid Sundvor, Stuart Jenkins and Myles Allen.
Carbon Balance Initiative, in collaboration with Oxford Net Zero and the Carbon Capture and Storage Association (CCSA), presents this landmark report exploring how the UK can scale carbon capture and storage (CCS) and deliver net zero through smarter carbon policy.
With the UK aiming to store 50 million tonnes of CO₂ annually by the mid-2030s, this report evaluates the role of carbon storage mandates, including a Carbon Takeback Obligation (CTBO), in closing policy gaps, boosting investor confidence, and reducing reliance on public subsidies.
Drawing on insights from over 20 expert stakeholders across government, industry, academia, and civil society, the report provides a comprehensive analysis of future policy scenarios. It responds directly to calls from government, including the DESNZ and the CCUS Council, to explore long-term CCS deployment mechanisms. The findings suggest that reliance on the UK Emissions Trading Scheme (ETS) alone is unlikely to drive the necessary scale of carbon capture and storage (CCS) and greenhouse gas removals (GGR). The report shows that a combined approach of market-based incentives and regulatory mandates has the potential to accelerate progress in establishing a self-sustaining market and achieving net zero.
Download the full report
Key Findings Include:
Policy Gaps: The current planned transition from government subsidies to market mechanisms poses challenges and is likely to lead to insufficient CCS deployment, jeopardising the UK’s net zero targets.
The Role of Mandates: Combining the ETS with a Carbon Takeback Obligation (CTBO) could provide a clear investment pathway, align storage development with net zero goals, and reinforce the ‘polluter pays’ principle.
Challenges & Opportunities: Stakeholders highlighted concerns about an over-reliance on abated fossil fuels, carbon leakage risks, UK industrial competitiveness, energy security, and consumer costs, underscoring the need for robust policy design and further research.
The report offers policymakers a framework for the potential implementation of carbon storage mandates, including a novel typology and five key design considerations.
Benefits and risks of UK carbon storage policy scenarios
Stakeholder perspectives on deployment challenges and opportunities
A typology of carbon storage mandates, including the Carbon Takeback Obligation (CTBO)
Comprehensive policy recommendations, including modelling and governance insights
Read the executive summary here
Contact us to book a chat at mirte.boot@carbon-balance.earth.