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Technology Collaboration Programme by IEA

Review of GHG Accounting Rules for CCS

Greg Cook, Paul Zakkour

Citation: IEAGHG, "Review of GHG Accounting Rules for CCS", 2016-TR3, May 2016.

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Publication Overview

This report aims to provide a comparative review of how current rules for compiling and reporting inventories of GHG emissions and removals, and for MRV of GHG emissions and removals (hereafter collectively termed “GHG accounting rules”) apply to CCS activities worldwide. These include international, regional and national approaches employed under policies and measures such as mandatory GHG emissions reporting, carbon taxes and emission trading schemes (ETS). The report will identify any significant differences between accounting protocols for CCS, the reasons for differences, and any issues that might arise from their differences. It will identify issues, gaps and potential barriers emerging from the review and possible measures that could be taken to support CCS deployment.

Publication Summary

  • Boundaries. GHG accounting boundaries can be an issue for CCS and CCU, primarily because of the nature of the technology which involves a carbon “stock transfer” in which the CO₂ that would have been emitted to the atmospheric carbon pool is actually transferred to the geological carbon pool for an indefinite period of time. This creates accounting challenges, both geographically and temporally. Geographical challenges arise as a result of CO₂ being transferred between different types of installations, operators and owners across the project CCS chain, potentially resulting in CO₂ be emitted somewhere else outside of a scheme’s accounting boundaries (see leakage below). Temporal challenges arise as a result of the possibility for CO₂ to leak back to the atmosphere at some future point in time (see permanence below).
  • Leakage. There are several situations where leakage could occur in the case of CCS and CCU. The geographical and legal nature of CCS “chains” means that leakage could occur once the captured CO₂ is transferred out of the capture facility, as the transport and storage facilities not included within the installations boundary. Other types of leakage effects can arise, both positive and negative, for certain ‘special’ CCS project types that involve more than just capture of fossil fuel emissions and their storage in geological reservoirs. These involve emissions arising from the combustion of fossil fuels incrementally produced through CO₂ enhanced hydrocarbon recovery (EHR) and the potential for negative leakage to occur in the case where bioenergy production is combined with CCS.
  • Permanence. A temporal disconnect between when an emission reduction takes place and the scope for it to be reversed at some point in the future poses a problem of permanence. This is an issue for CCS, and in particular for certain types of CCU, in which there is the potential for CO₂ to return to the atmosphere at some future point in time. Non-permanence can negate at least part of the environmental benefits achieved by CCS and CCU, compromising the effectiveness of policies and measures designed to incentivise the technology.
  • Reference case. The use of a reference case or baseline against which emissions reduction achievements can be measured do not typically present issues for CCS at an economy-wide or sectoral level. Complications may arise, however, at a project level since the baseline is usually set by the counterfactual scenario, and this can be difficult to determine, given the wide range of potential CCS project types (different sectors, retrofit versus new-builds etc). A project-specific approach may be appropriate where the counterfactual is the same plant without CCS. In other cases it may be more appropriate to take a standards-based approach (e.g. where the counterfactual plant is an alternative low carbon technology capable of providing the same service).
  • Measurement, reporting and verification. MRV forms the cornerstone of any GHG accounting framework and typically underpins any scheme designed to regulate and/or incentivise emission reductions. Variations exist between MRV rules applied at different levels and for different purposes, which makes it important to understand and apply the right set of rules based on the needs of a certain program and/or to tailor them accordingly. In these contexts, the report identifies several specific issues for CCS and CCU in respect of GHG accounting and MRV rules. Firstly, three key requirements are found to be fundamental to all CCS projects: 4. Recognising captured CO₂ for storage as “not emitted”. MRV rules need to allow for captured CO₂ to be deducted from the relevant inventory (e.g. sector; installation). 5. Including transport and storage within the scheme accounting rules. MRV rules need to be developed also for monitoring of transport and storage, and these need to dovetail across the project chain. 6. A mechanism to address permanence. Appropriate accounting and MRV rules must provide assurances that the injected CO₂ remains in the intended geological formation and isolated from the atmosphere over the long-term, and quantify any leaks that occur. Secondly, some specific considerations arise for the following ‘special cases’:
  • Recognition of negative emissions from bio-CCS. GHG accounting schemes and associated MRV rules need to adequately evaluate, attribute and reward any negative emissions associated with bio-CCS activities.
  • Accounting for CO₂-EOR. The potential ‘leakage’ of emissions outside a scheme boundary associated with incremental oil production can be addressed through suitable MRV rules, taking into account the relevant accounting framework.
  • Accounting for CO₂ utilisation. The different mitigation pathways associated with CO₂ utilisation technologies must be evaluated and suitable MRV rules developed if they are to be recognised and supported within GHG accounting schemes.

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