CO2 storage resources and their development

Executive summary

CO2 storage enables net zero goals

CO2 storage is a proven and effective way to permanently isolate captured CO2 from the atmosphere. Currently, seven dedicated commercial-scale CO2 storage sites inject around 10 Mt of CO2 annually into deep geological formations. The piloting and demonstration of dedicated storage has been occurring since the 1990s. Dedicated storage also builds upon 50 years of lessons learned from CO2 enhanced oil recovery (CO2-EOR) and over 150 years of subsurface activity by the oil and gas sector.

Access to safe and secure geological CO2 storage is critical to CO2 management in the context of stabilising global temperature rise. In the IEA’s Net Zero Emissions by 2050 Scenario, 5.9 Gt of captured CO2 is stored annually in 2050. Enterprises may be hesitant to invest in CO2 capture if they are not confident that CO2 storage will be available to store captured emissions. Global CO2 storage development is currently lagging behind the development of CO2 capture. Targeted government intervention and expanding policy support to encompass CO2 storage development can help accelerate its progress.

Technology-based CO2 removal requires CO2 storage. Direct air capture with CO2 storage (DACS) and bioenergy with carbon capture and storage (BECCS) rely on geological storage to permanently remove captured CO2. Without CO2 storage, the potential for carbon removal offered by these technologies cannot be realised.

Resource assessment and development take time, but momentum is building

As of the middle of 2022, more than 130 CO2 storage sites are in development in 20 countries. Many of these sites have been in development for years, but plans for 60 new storage projects were announced in 2021. By 2030 annual dedicated injection capacity could increase to more than 110 Mt from some 10 Mt today.

Ample CO2 storage resources may be available globally, but further assessment is required. Globally, CO2 storage resources are under-appraised and only a small handful qualify as reserves that can be developed into sites. To support the development of resource management strategies, governments should assess CO2 storage potential and define reserves. It can take three to ten years to develop suitable resources into operating sites and not every resource will be developable. Government-led precompetitive resource assessment can reduce the financial risks of developing CO2 storage and accelerate the creation of new sites.

Phasing the assessment and development process is efficient and effective. Assessment becomes increasingly detailed and costly as it proceeds. A phased process allows resources that do not meet project criteria to be excluded from further assessment. This reduces exploration risk and increases confidence in storage. Phasing also allows different actors to conduct different phases of assessment so, for example, the private sector can build on precompetitive assessments conducted by governments.

Storage-related risks are manageable

The technical risks associated with CO2 storage can be managed effectively. Regulatory oversight, robust site assessment and competent site operations support risk management and contribute to CO2 storage security. Measurement, monitoring and verification (MMV) programmes – a mandatory part of CO2 storage operations – underpin risk management processes and demonstrate effective CO2 storage. To date, pilot, demonstration and commercial CO2 storage projects have supported the development of MMV expertise and experience. Regulators should ensure that frameworks outline MMV requirements without being overly prescriptive as to the types of technologies that need to be used.

Business model development will support economic risk reduction. New business models are emerging as dedicated CO2 storage activity increases to support decarbonisation efforts. Business models from other sectors can provide guidance, but regionally informed, storage-specific business models are needed to support upscaling and widespread deployment. Such models have to account for the unique market and financial risks faced by the developing storage industry, be guided by local policies and regulation, and address risk sharing, long-term liability and revenue models. Since CO2 storage sites are effectively providing a public service, both the public and private sectors should play a role in developing sustainable business models for CO2 storage activity.

Commercialisation requires policy support

Developing large, multi-source CO2 storage sites should be a top priority. Multi-source storage sites are the foundation of a hub model for deploying CO2 storage. They capitalise on economies of scale to reduce storage costs and support the deployment of CO2 capture at emitters where full-chain CCUS projects are not feasible, such as emitters that are small or have no storage expertise.

CO2 storage costs may increase with time due to resource availability and quality. Resources that have the most data, are the most accessible or are the largest or least complex are likely to be developed first. As a result, assessment, development, operating and monitoring costs may increase due to the need to gather additional data, or due to increased complexity of injection operations, or both. Learning-related cost reductions can offset cost increases, while resource management can support the strategic development of resources, which can in turn reduce disruptive cost increases.

Decarbonisation strategies should account for the location of storage resources. CO2 storage resources are immovable, so the benefits of siting new facilities that will capture CO2 alongside CO2 storage resources should be considered. Through economies of agglomeration, this could support CO2 storage hub development, CO2 transport cost reductions, and the strategic development of DACS and BECCS facilities in regions with both storage resources and high potential for renewable energy or bioenergy feedstock.

Getting started on CO2 storage resource assessment

Many industrial and power generation facilities in emerging market and developing economies (EMDEs) are relatively young, increasing the case for CCUS deployment in these countries in particular. Some of these countries have started to assess their CO2 storage resources, but many have not. The IEA has devised the following checklist for governments that are interested in developing an atlas or database of their CO2 storage resources. It predominantly targets EMDEs, but can be used by any country or region as a starting point. Not every step will be required or relevant to every country or region.

1.      National CCUS focal point

  • Assess whether CO2 storage resources fall under the mandate of any agency or agencies.
  • Identify and nominate an organisation or agency to serve as a national CCUS focal point.
  • Consider engaging the national geological survey or equivalent.

2.    International support

  • Consider engaging international expertise and support to assist with the process, such as the IEA, IEAGHG and World Bank.

3.    CO2 storage assessment project team

  • Determine which agency should co‑ordinate/be involved in the resource assessment process.
  • Define a project team to reanalyse existing geological data with the goal of identifying CO2 storage resources.
  • Decide which internationally recognised storage assessment methodology should be used.

4.    Leverage national human capacity

  • Initiate discussion on CO2 storage with stakeholders who may be able to assist in the assessment process, such as oil and gas companies, local universities and research centres with subsurface expertise, and other government agencies.

5.    Data

  • Identify owners and custodians of geological data, which may be government agencies, private-sector companies, research organisations, etc.
  • Gather as much existing relevant geological data as possible and make it publicly available whenever possible.

6.    CO2 storage assessment

  • Assess the collated data. As a part of assessment, clearly define the methodology and assumptions that were used.
  • Make assessment results publicly available whenever possible.

7.    Next steps

  • Determine if there are specific resources that should be targeted at further assessment.
  • Outline priorities for future CO2 storage-related work and consider defining a CCUS deployment work programme.

Priority actions to develop CO2 storage resources

To reduce the risk of CO2 storage becoming a bottleneck during energy transitions, the IEA has identified five categories of priority actions that governments can take to accelerate CO2 storage development. The private sector can support these actions through consultation during the development of policies and regulation, improving data management practices, increasing innovation, and supporting the upskilling and reskilling of the oil and gas workforce. Additionally, the IEA has defined specific considerations for the private sector to support CO2 storage deployment. 

Identify CO2 storage resources and facilitate access to the data necessary for storage development

  • Develop national CO2 storage resource atlases or databases using internationally agreed methodology, such as the Storage Resource Management System (SRMS), and existing subsurface data.
  • Accelerate pre-commercial exploration for CO2 storage in order to increase confidence in storage resource availability and performance.
  • Support countries and regions without storage experience by encouraging knowledge transfer and data sharing.
  • Improve data management, support digitisation of legacy records, and ensure data are accessible.

Ensure legal and regulatory frameworks enable effective and secure CO2 storage

  • Outline characterisation, quantification and MMV requirements in regulatory frameworks.
  • Address CO2 storage-specific liabilities.
  • Define clear licensing and permitting processes and appropriately staff agencies to support efficient and timely permit issuing.
  • Clearly define the ownership of, access to and management of subsurface pore space if it is not already defined.
  • Consider the ownership of new subsurface data and if newly acquired subsurface data should be considered a public good after a set period of time.

Develop policies and regulatory competencies that support CO2 storage

  • Determine if CO2 storage, and by extension CCUS, should be integrated into national climate, energy, industrial and decarbonisation strategies. If yes, develop an appropriate resource management plan.
  • Implement policies to encourage CO2 storage investment, such as direct incentives or market-based policies like a carbon tax, takeback obligation or emissions trading system.
  • Define methods of risk allocation and/or risk sharing between public and private sectors.
  • Incentivise the development of CO2 transport and storage hubs to support the decarbonisation of industrial clusters and encourage the co-location of clean energy technologies with CO2 storage resources.
  • Foster public support by developing robust communication channels and allowing for public engagement opportunities.

Support early movers, develop business models and boost investment in CO2 storage

  • Develop dedicated incentives to support resource assessment and development.
  • Provide early movers with access to targeted funding that is contingent on active resource assessment and knowledge/data sharing. For example, an exploration tax credit could encourage companies to perform resource assessments.
  • Encourage public–private partnerships on storage development.
  • Ensure ongoing development funding to support CCUS and storage development.
  • Support the development of CO2 storage competencies, expertise and technologies
  • Engage in or support technology development that can improve resource assessment, site operations and MMV processes.
  • Support the reskilling and upskilling of oil and gas workforces so they are also able to work on CO2 storage.
  • Encourage the development of CO2 storage and CCUS research, engineering and technology programmes at the university level and at national research centres.
  • Incentivise private-sector companies with CCUS experience to invest in the national workforce, in the form of training and apprenticeships, to truly build on the human capacity needed to deploy projects.
  • Develop technology solutions that enable the co-location of different clean energy technology solutions.

Private-sector considerations

  • Consider creating a market for tradeable, regulatory compliant CO2 storage certificates.
  • Incorporate CO2 management into corporate decarbonisation and environmental, sustainability and governance (ESG) strategies. As part of this, consider if CCUS should be included in current and future growth strategies.
  • Develop and build CO2 storage infrastructure.1
  • Drive investment towards CO2 storage infrastructure by supporting CO2 management and insuring it is permissible within sustainable finance metrics.
  • Create insurance products that cover CO2 storage activities.
  • Recognise proven CO2 storage reserves as an asset.2
References

  1. This can also be done by state-owned enterprises and public–private partnerships.

  2. The Storage Resource Management System published by the Society of Petroleum Engineers provides a mechanism to assign a book value to CO2 storage resources.  

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