Fossil fuels firms should pay to have their emissions cleaned, study says

Requiring fossil fuel companies to pay to clean up their carbon emissions could help curb dangerous global warming at a relatively affordable cost, a group of scientists from Oxford, the US and the Netherlands have suggested. 

To do this, the firms should be required to offset emissions from all fossil fuels extracted or imported into a region, country or bloc by storing the same amount of carbon back underground.

“The technology exists – what has always been lacking is effective policy,” said Myles Allen, a professor of geosystems science at the University of Oxford and one of the scientists behind the proposal. “The failure has been policy, not technology – we know how to do this.”

The approach already exists in other areas such as plastic packaging or electrical goods, where firms are made responsible for the effects of their activities on the surrounding environment. It is also not dissimilar to the water sector, where companies have to invest in and consumers pay for the treatment and disposal of wastewater, they argued.

The first step towards realising the researchers' vision would be a requirement for firms to recapture a percentage of their fossil fuel emissions, which would be increased incrementally until reaching 100 per cent of carbon from fossil fuels by 2050.

To do so, the companies would have to rely on carbon capture technologies, mainly carbon capture and storage (CCS) and direct air capture (DAC).

In the UK alone, the CCS sector could be worth £100bn to the economy by 2050, according to an Offshore Energies UK (OEUK) report. The UK government’s official Net Zero Strategy estimates that around 50 million tonnes a year will need to be captured by 2035.

In the scientists' view, this requirement would be one of the only things that could realise the Paris Agreement target of maintaining temperature rises under 1.5ºC to avoid the worst impacts of climate change.

Unlike a carbon tax, which makes the use of fossil fuels more expensive for consumers, the proposed imposition would only mean a small increase in costs – when the percentages mandated are low. As the price increases, the development of affordable carbon capture and storage technologies could eventually make up the difference. 

“A carbon takeback obligation provides a simple and predictable regulation ensuring the fossil fuel industry cleans up after its activities and products without government subsidies,” said Stuart Jenkins, a researcher at the University of Oxford. 

“It does add to the cost of fossil fuel production, and so it’s not an incentive to continue production by any means.”

In addition to being a potentially more affordable solution, the reliance on carbon capture technologies would also enable the storage of carbon dioxide in the geosphere rather than the biosphere, where much land is needed for growing food around the world.

“If you generate too much carbon dioxide, you are going to have to put it somewhere, and you can’t rely on the biosphere to ramp up, as you need the biosphere for food production. So it’s going to have to go back in the ground,” said Allen. “This is a focused policy that will deliver the outcomes we need.”

Hugh Helferty, a retired corporate strategic research manager at ExxonMobil, and co-author of the paper, stressed the importance of accepting the cost of carbon removal if the 1.5ºC target is to be kept.

"Who pays?” he asked. “Should it be the taxpayer, or producer, or the producer and consumer together? It makes sense that the producer and user should pay, rather than the taxpayer. That puts the drive to reduce emissions in the right place.”

Several other scientists, who were not involved with the paper, applauded the idea.

Dr Hannah Chalmers, a reader in sustainable energy systems at the University of Edinburgh, told The Guardian: “Implementing a CTBO [carbon takeback obligation] 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.”

The paper says implementing the obligation could reduce and ultimately prevent further global warming from fossil fuels at an affordable cost relative to conventional solutions.

Last year, the world spent $13tn (£10.7tn) on energy, mostly on fossil fuels. With the global economy expected to double by 2050, the net-zero cost would be less than half of last year’s energy costs as a proportion of global GDP, the study authors say.

In December, the North Sea Transition Authority fined three oil companies a total of £265,000 for risking “the industry’s drive to cut emissions and bolster the UK’s energy security”.

A month earlier, the regulator had issued more than 100 new oil and gas drilling licences to “boost” the UK’s energy sector, despite the UN’s warnings that any plans to expand fossil fuel projects over the next decade would be severely out of line with ambitions to cut greenhouse gas emissions and limit temperature rises to 1.5°C. 

In June 2022, the UK opened its first licensing round of large-scale carbon capture projects in 13 areas within the North Sea, specifically in locations off the coast of Aberdeen, Teesside, Liverpool and Lincolnshire.

The scientists' proposal has been detailed in a paper published in the journal Environmental Research Letters.