New IEAGHG Technical Report: 2023-01 Integrating CCS in international cooperation and carbon markets under Article 6 of the Paris Agreement

Article 6 of the Paris Agreement is an enabler that will help countries cooperate in order to meet global emissions reductions targets by: using international carbon markets; allowing transfers of emission reductions between countries; and providing a framework for greenhouse gas emissions to be balanced globally.

This latest IEAGHG study, by contractors Carbon Counts, aimed to review and summarise the recent and ongoing work in the area of CCS in an Article 6 context, and to provide a detailed overview. The study starts with a comprehensive snapshot of the Article 6 rules, the types of markets and mechanisms that could evolve, and the units that could be traded.

Ideas taken from the initial literature review and information gathering were then used to develop three models for potential Article 6 cooperation on CCS. CCS has been consistently noted as a key technology for achieving deep and sustained cuts in atmospheric CO₂ levels, with geological storage critical for meeting the goals of the Paris Agreement, and CCS could be incorporated into Article 6 through emissions trading or crediting, within compliant or voluntary markets, through governmental transfers of mitigation outcomes, and through CCS-specific approaches. The first potential model links carbon prices based on the trading of emission reductions / removals units. The second involves supply side offsetting based on voluntary pledges by major independent energy companies.The third involves supply side offsetting, based on country pledges, to support geological carbon storage before transitioning to other types of cooperation built upon the adoption of storage targets in nationally determined contributions (NDCs).

The contractors have undertaken an evaluation of these three models against criteria that reflect the overall goals of international cooperation and the issues facing CCS deployment.

IEAGHG is particularly suited to publish such an analysis due to its recognised status as a provider of technically sound, objective knowledge that is not policy prescriptive, but policy relevant.