The Nickel Report

Carbon Capture and Sequestration Will Be Necessary to Meet State Climate Targets

On November 16, 2022, the California Air Resources Board (CARB) released its proposed final “2022 Scoping Plan for Achieving Carbon Neutrality” (Scoping Plan). The proposed final Scoping Plan—California’s fourth roadmap for mitigating climate change—lays out a path for California to achieve carbon neutrality and reduce anthropogenic emissions to 85 percent below 1990 levels by 2045.

The plan outlines greenhouse gas mitigation strategies for key high-impact industries as well as strategies for sequestering residual emissions which cannot be abated in industries with no feasible alternative to combustion. Notably, the plan highlights the necessity for carbon capture and carbon removal to achieve net negative emissions, which is the focus of this post. As we have noted for some time, carbon capture and sequestration (CCS) is a necessary climate mitigation tool, and California is an ideal testing ground for CCS for several reasons, including a culture of innovation, good geology for storage, and aggressive state targets on emissions.

California’s position is that “there is no path to carbon neutrality without carbon removal and sequestration.” The Scoping Plan focuses on two types of carbon removal and sequestration: CCS from a facility or point source, and carbon dioxide removal (CDR) from ambient air. CCS is a process by which carbon dioxide (CO₂)—the pri­mary GHG contributing to climate change—generated from electricity generation, industrial processes, and other stationary sources is captured, compressed, transported, and stored, gen­erally in the ground, so it is not emitted into the atmosphere. California is well positioned for sequestration in geologic formations at scale, with an estimated state-wide sequestration potential of around 70 billion metric tons of CO₂. California’s Central Valley alone contains deep rock formations with storage capacity of at least 17 billion tons of CO₂. The Scoping Plan takes a targeted approach to incorporating CCS into state emissions reduction strategies, focusing on specific sectors such as electricity generation, cement production, and refineries. Where CCS is not deployed to abate emissions from point sources, the Scoping Plan envisions CDR technologies used instead to capture CO₂ directly from the atmosphere.

While California unambiguously supports CCS and CDR as part of its strategy to combat climate change, the Scoping Plan raises issues that supporters of CCS need to be cognizant of when advancing CCS and CDR projects, including via “hub” projects. For example, the Scoping Plan raises questions on the reach of deployment of CCS for some sectors and notes that future monitoring to evaluate actual emissions reductions through CCS in California may be appropriate. CARB notes that comments have been raised regarding safety and viability of CCS at scale, and both the White House Council on Environmental Quality and the California Environmental Justice Advisory Committee have raised questions about the relationship between CCS projects and environmental justice communities.

Both the California Governor and the state legislature are driving California’s deployment of CCS as a climate change mitigation strategy, but with some potential mixed messaging. California Governor Gavin Newsom, for example, directed CARB to establish ambitious carbon capture targets of 20 million tons of CO₂ by 2030, and 100 million tons by 2045. However, the California legislature recently passed Senate Bill 905 (SB 905), which could create uncertainty in the short term on permitting CCS projects in California. SB 905 requires CARB to create a Carbon Capture, Removal, Utilization, and Storage Program. Under SB 905, by January 1, 2025, CARB must adopt regulations creating a state permitting framework for approval of CCS and CDR projects. Along with its strong message of support for CCS, SB 905, as noted above, has also created some uncertainty around the practical implementation of CCS projects. It temporarily bans the transfer of CO₂ through pipelines, until the U.S. Department of Transportation’s Pipelines and Hazardous Materials Safety Administration updates its pipeline safety requirements. This policy has raised questions about how CCS project developers will transport CO₂ in the interim, which is particularly important in the context of CCS hub projects. SB 905 also imposes to-be-determined requirements on CCS project developers to put in place monitoring and mitigation plans around injection sites. In order to implement SB 905 and the 2022 Scoping Plan, CARB will need to review existing CCS and CDR technologies to evaluate their feasibility at scale, develop requirements for permitting, monitoring, reporting, and financial responsibility, and develop a public database of carbon capture projects. The process will include industry and community engagement, as well as sector-specific workshops. As the state works to formalize a regulatory and permitting framework for CCS, much remains to be seen as to how SB 905’s requirements will impact CARB’s reliance on CCS to meet the climate targets laid out by the Scoping Plan.