The Carbon Takeback Obligation (CTBO) is a new policy instrument that could ensure that CO2 from fossil energy no longer ends up in the atmosphere. It requires producers and importers of fossil fuels such as oil, coal and gas to make sure that an increasing percentage of the amount of carbon extracted is also permanently stored. This can be done by, among other things, CO2 capture and storage. This instrument will give a strong additional stimulus for the energy transition.
That is the conclusion of the report 'Carbon Takeback Obligation - A Producer Responsibility Scheme on the Way to a Climate Neutral Energy System' by Margriet Kuijper Consultancy, De Gemeynt and Royal HaskoningDHV, published on 21 January 2021. In this study, which was done in collaboration with a broad group of stakeholders, a workable model for a CTBO was developed for producers and importers of fossil fuels in the Netherlands. Ideas for a CTBO are also being developed in other countries ;the system can be expanded to a larger region and more countries in the future.
According toMargriet Kuijper, project leader of the study: "This is a necessary additional instrument in addition to the policy measures already in place. Current policies focus on the emissions generated by the users of fossil fuels. But new fossil energy production can be added to the market without climate restrictions, while we know that everything that is put on the market is eventually burned and turned into CO2. Even if we manage to scale up renewables quickly we will still be using quite a bit of fossil energy in the coming decades. A CTBO stipulates that the net CO2 emissions from this inevitable use of fossil fuels will go to zero in a timely manner".
The system is comparable to producer responsibility schemes as have been implemented in many countries for products like packaging, car tires and white goods; a policy approach under which producers are given a significant responsibility, financial and/or physical, for the treatment or disposal of post-consumer products and waste. That concept can also be applied to fossil carbon products. Collecting and safely storing the CO2 would be the way to discharge that responsibility. In this way the polluter pays to reduce the pollution. With carbon pricing, polluters effectively pay to pollute. In both cases product prices will increase. That is an added incentive for the transition.
The report identifies possible next steps in the development, testing and implementation of the instrument.
The CTBO is complementary to the current suite of climate policies that regulate fossil energy production and use. It can also be seen as an insurance policy. If the transition is fast enough, the demand for fossil fuels will decrease rapidly; but if the transition is slow, the demand for fossil fuels decreases more slowly and it will become very important that the carbon footprint of this fossil energy use is gradually reduced to net zero. This will significantly increase the chances of global warming being kept below 2 degrees, as agreed in the Paris climate agreement.
The report, ‘Carbon Takeback Obligation - A ProducerResponsibility Scheme on the Way to a Climate Neutral Energy System’ can be downloaded here
The study has been financially supported by the Ministry of Economic Affairs and Climate,Energy Management Netherlands, Nogepa and Equinor, and has benefited from regular engagements with a broad group of stakeholders. The study was executed by Margriet Kuijper (project leader, Margriet Kuijper Consultancy), Jan Paul van Soest (De Gemeynt) and Evert Holleman (Royal HaskoningDHV). Support (editorial, layout) was provided pro bono by Deloitte (Femke Hoogeveen-Perlot and team).
Podcast: Margriet Kuijper explains the Carbon Takeback Obligation: