Carbon Capture, Utilization And Storage: Offsetting Emissions Through High-Quality Carbon Credits
- Jan 9, 2023 7:58 pm GMT
Carbon Capture, Utilization And Storage (CCUS)-based carbon credits are among the market’s highest in quality because they are measured, verified, and highly regulated. Emitters seeking to offset their emissions should be looking first to credits created through CCUS facilities.
Why CCUS Technologies Represent High-Quality Carbon Credits
1. The CO2 Captured Through CCUS Is Easily Measured
Unlike afforestation, where measuring the carbon captured is extremely difficult and imprecise, CCUS facilities measure exactly how much carbon they are extracting from the mixture of chemicals being processed, as the CO2 is separated as a standalone chemical compound.
Across industrial-sized power-generating facilities in the United States, in 2021, roughly 0.855 pounds of CO2 were emitted per kWh. CCUS is capable of removing over 90% of that carbon dioxide and is on the path to extracting 100% of it. Facilities and the agencies that regulate them know exactly how much carbon dioxide is captured and prevented from spilling into the atmosphere.
Here is an example of how the process works:
There are two issues with current offset markets. They promote renewables and forestry over other alternatives to slow global warming, and measurability challenges incentivize an opaque and even fraudulent marketplace for carbon credits.
2. CCUS Carbon Credits Are Verifiable
Because of the ease of measurement, when you buy a carbon credit that is backed by CCUS, you can be confident in the amount of carbon you have offset.
Carbon sequestered by CCUS facilities is measured by meters, which are compulsory for the facilities to participate in the American and international tax credit schemes. For American companies, stored carbon is verified by the EPA’s Greenhouse Gas Reporting Tool (EGGRT).
For multinational corporations and companies outside of the United States, the International Standards Organization system is used for verification: ISO 27913 for saline storage and ISO 27916 for Enhanced Oil Recovery (EOR).
These measurability characteristics and verification processes are critical factors that make CCUS-sequestered carbon credits among the highest quality in the market. Any emitter with ESG commitments can have confidence in offsetting their emissions through these mechanisms.
3. CCUS-Related Carbon Markets Are Highly Regulated
Regulations around CCUS and measures to prove sequestering are so rigorous that many facilities have meter-proven sequestered CO2 but need to await a time lag between the sequestering and the awarding by government agencies of certification.
These existing lags, while posing funding challenges for CCUS facility operators, should, if anything, entice investors and companies with unmet ESG targets to CCUS. The lags suggest precisely what makes CCUS-sequestered carbon high-quality: they indicate stringent measurement, verification, and regulatory measures to ensure the quality of the credits issued.
Simply put, you cannot fake a carbon credit using CCUS.
4. Carbon Credit Markets Are Plagued By Fraud & Misuse
Carbon credit markets, both regulated cap-and-trade schemes and voluntary markets, are notoriously opaque. This undermines trust in the entire market-based system for issuing carbon credits.
And so it should. Middlemen take too big a portion of the final price of a carbon credit. Major corporations are buying cheap, low-quality, and difficult-to-verify carbon credits to claim carbon neutrality.
Major offset-verifying bodies like Verra and Gold Standard have stopped approving renewable-energy projects because their main revenue drivers are in selling clean electricity. The buyer of the offsets, however, can claim the entire credit for the avoided emissions.
Fake carbon credits, double-counted carbon credits, credits-by-threat (i.e. I’ll cut down this forest unless you pay me not to) all litter carbon markets and have cast doubts among consumers about their validity.
Companies that are serious about their ESG commitments will no longer be able to deploy credits as a PR mechanism unless those credits are high in quality. And consumers are starting to take notice. Greenwashing is no longer an option.
Carbon Capture, Utilization and Storage delivers high-quality credits to the market, and that's why companies like CarbonKerma are enthusiastic about helping CCUS scale through its tokenized marketplace of captured and stored CO2.
The world is finally latching onto the value of CCUS. According to The Oxford Institute For Energy Studies:
“no net-zero targets are achievable in a reasonable time frame without a high level of carbon abatement. A large number of scientific and economic reports issued by various agencies and financial institutions over the last twelve months, culminating recently in discourse during COP26, have all brought renewed focus and enthusiasm on… [Carbon Capture And Storage].”
CCUS is critical if we are to meet our Paris Accord goals.
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