Along with KAPSARC’s goal to study and ponder the changes in the oil, gas and renewable energy industry, the center has published a new study outlining options for supply-side climate policies, and considers how these could support fossil fuel producers in establishing proactive and progressive approaches toward climate mitigation. Factors and challenges that could influence success are also considered.
The study, written by KAPSARC researchers Paul Zakkour and Wolfgang Heidug, suggests new policies and tools could allow oil exporters to better manage the climate impacts posed by their products in ways that can help maintain their role in a low carbon world.
“Motivating oil producing countries to use large-scale climate mitigation technologies such as carbon capture and storage (CCS) can help them preserve the value of their natural resource assets while fostering ambitious climate action aligned with the goal of the Paris Agreement” according to KAPSARC’s study.
KAPSARC’s paper identifies three benefits of supply-side climate policy for oil producers: supporting their ambitions to diversify and decarbonize their economies, increasing policy flexibility by allocating emissions reduction from CCS to decarbonized oil or value-added products (and thereby optimizing the value of CCS), and generating new industrial activities and new sources of revenue driven by climate action.
The study considers several strategic and economic factors that must be taken into account when developing such policies, including the conditions under which such ambition could be proposed, and the ability to pass through costs to oil importers.
The researchers also suggest that valuing carbon storage in the ways described in the paper could create a commercial market for transacting physical CO2 between capturers, shippers and storers, that can help unlock the potential of CCS without the need for excessive government intervention.
The study discusses the establishment of a international certification mechanism for geological carbon storage as an important step in supporting policy developments towards decarbonized fossil fuels.
This article originally appeared on Saudi Gazette