California has led the way in the US in many aspects of emissions reductions, including GHGs, particularly since the introduction of Assembly Bill 32 (AB32) in 2006 to tackle global warming by reducing GHG emissions from California.  AB 32 requires the California Air Resources Board (CARB) to reduce California’s GHG emissions to 1990 levels by 2020. A variety of programs were adopted to achieve this target, including a Cap-and-Trade Program, and a Low Carbon Fuel Standard.

In terms of emissions trading schemes, CCS has been recognised and included in the EU Emissions Trading Scheme on an ad hoc basis since 2007 and fully since 2009 (in effect from 2013), using new CCS-specific ‘Monitoring and Reporting Guidelines’. CCS has also been recognised in the Kyoto Protocol’s Clean Development Mechanism since 2011.

California’s Cap-and-Trade Program was adopted in 2010, in effect from 2012, and currently covers utilities and large industrial sources that emit greater than 25,000 metric tons of CO2 equivalent emissions per year beginning in 2013. At the November 2013 auction, its current and future vintage allowances sold for over $11 per allowance. The California Cap-and-Trade Regulation currently has a provision which states that CO2 suppliers (as covered entities) may reduce their compliance obligation for each metric ton of CO2 that has been proven to be sequestered using a Board-approved CCS quantification methodology (QM); however, no such QM has been adopted. As a result, CARB has begun the process of researching existing QM’s to inform development a QM for CCS, which must ensure that the emissions reductions are real, permanent, quantifiable, verifiable, and enforceable. IEAGHG recently met with CARB to discuss these topics and IEAGHG’s work of relevance. It was interesting to learn about CARB’s Low Carbon Fuel Standard (LCFS), which allows regulated parties to receive credit for fuel produced from petroleum using an innovative method, such as CCS.

A recent piece of work commissioned by IEAGHG looks at the issue of emissions accounting for Bio-CCS in terms of its negative emissions. There is concern that cap-and-trade schemes such as the EU ETS are not able to reward negative emissions such as from Bio-CCS. This report will be the subject of another blog to come, but of relevance here is that the work identified the LCFS as a scheme which is able to recognise the negative emissions of Bio-CCS, and CARB’s Cap-and-Trade Program as also potentially able to recognise them.

Lawrence Berkeley National Laboratory (LBNL) are working on the background for a quantitative methodology for CARB, looking at first principles on ensuring the environmental performance and GHG accounting integrity of such inclusion as well as learning from other schemes. Because of these interesting developments by CARB, IEAGHG shared work and information of relevance, relating to the IPCC GHG Inventory Guidelines (2006), the EU ETS and its CCS MRG, the CDM, attribution monitoring protocol, and the latest work on GHG accounting for Bio-CCS.

More information on CARB’s Cap-and-Trade Program can be found at http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm and on the LCFS at http://www.arb.ca.gov/fuels/lcfs/lcfs.htm . The IEAGHG report ‘Biomass and CCS – guidance for accounting for negative emissions’ will be published soon.

Promising developments for CCS in California!