New Oxford Report: Carbon Capture and Storage Without Taxpayer Billions Is Possible 

Oxford Net Zero and Carbon Balance researchers reveal the risks of the current UK CCS policy mix and explore how a carbon storage mandate on fossil fuel producers could help the UK meet its climate targets while protecting public finances. 

A new landmark report published today addresses a critical challenge in UK climate policy: how to develop essential carbon storage infrastructure while protecting public finances. The report, authored by researchers at Oxford Net Zero (based at the University of Oxford) and the Carbon Balance Initiative, responds to a direct call from the government to examine long-term policy mechanisms for carbon storage deployment and the Carbon Takeback Obligation (CTBO).  

Meeting the UK's legally binding net zero target requires a rapid and significant reduction in fossil fuel use, alongside permanent geological CO₂ storage of any residual CO₂ production by 2050. This makes developing a robust and financially sustainable carbon capture and storage (CCS) industry essential for meeting climate targets. In 2024, the UK government committed £21.7 billion to kick-start CCS development. It has ambitions to store 50 megatonnes of CO₂ annually by the mid-2030s – equivalent to the emissions from all UK power stations today. Reaching these targets will require billions in additional investment beyond current public funding commitments. 

The research was developed through extensive consultation with over 20 senior stakeholders across government, academia, industry, and civil society, in collaboration with the Carbon Capture and Storage Association (CCSA). It found that current plans to rely primarily on the UK Emissions Trading Scheme to scale CCS from the 2030s are unlikely to attract sufficient private investment in carbon storage, potentially jeopardising our net zero targets and prolonging the CCS industry reliance on government subsidies beyond current funding commitments.  

The authors explore an alternative policy scenario: requiring fossil fuel suppliers to permanently store a rising percentage of their CO₂ emissions – such as through a Carbon Takeback Obligation. This approach could create a self-sustaining storage market while gradually reducing dependence on public funding. The authors find that storage mandates could be particularly effective if combined with complementary demand management measures such as carbon pricing. 

“The new Labour government faces tough choices about public spending across many sectors,” said Mirte Boot, UK Director of Carbon Balance and report author. “Our research shows that, with the right policy design, the government could create a clear investment case for CCS and GGR without pushing the costs for CO₂ clean-up onto taxpayers,” added Ingrid Sundvor, report author and Executive Director of Carbon Balance.  

The authors caution that careful policy design and further research are needed, particularly to address the potential impacts and implementation challenges of any storage mandate on UK industrial competitiveness, energy security, consumer costs, and the risk of carbon leakage. The authors emphasise any carbon storage mandate would need to align with a trajectory of fossil fuel phase-out and a broader energy transition.   

“The fossil fuel industry has the resources to deliver the storage capacity we need,” said Professor Myles Allen, report author and Oxford Net Zero Principal Investigator. “Making this a condition of their continued operation provides a practical pathway to net zero. Further policy development on this is urgently needed.”  

Professor Stuart Haszeldine from the University of Edinburgh, who reviewed the report, added “The world heated ever-faster in 2024 – we are losing the climate fight. Commercial carbon storage has started, but models show it will need to develop 100 times faster to protect net zero. But without change, these grant-funded projects may be the last. The Government must look at a supply-side obligation that integrates the cost of CO₂ storage into wholesale fossil fuel prices.”  

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Notes to Editors: 

• This report is the output of a collaboration between the Carbon Balance initiative, Oxford Net Zero and the Carbon Capture and Storage Association (CCSA). 

• The new report has been published on the Oxford Net Zero website: https://netzeroclimate.org/publications/markets-mandates-uk-ccs-carbon-takeback-obligation/  

• The research responds to direct requests for this research from DESNZ and the CCUS Council, who were engaged throughout the research process and contributed extensively to the workshop. 

• The views expressed in this report solely represent those of the authors and do not necessarily represent those of Oxford Net Zero, the University of Oxford, the Carbon Balance Initiative, the Carbon Capture and Storage Association, or any other associated institution or individuals. The authors operated independently and retained editorial control of the final report and its recommendations. 

• The report was reviewed by an expert Academic Steering Committee, including Stephanie Arcusa, Johannes Bednar, Patrick Dixon, Paul Ekins, Navraj Singh Ghaleigh, Stuart Haszeldine, Margriet Kuijper, Niall Mac Dowell, Steve Pye, Mark Workman, and Paul Zakkour. 

• Authors are available for interview. 

Contact: Helen Bunting, Communications Manager, Oxford Net Zero: helen.bunting@ouce.ox.ac.uk 

About Oxford Net Zero  

Oxford Net Zero is an interdisciplinary research initiative based at the University of Oxford. Our researchers sit across ten Departments of the University, including Law, Physics, Biology, Earth Sciences, Anthropology and Geography. As an academic research programme, we produce high-quality, peer-reviewed research, and leverage that work to provide advice and expertise to policymakers, global industry leaders and international organisations in the global race to net zero. Find out more at netzeroclimate.org.  

About Carbon Balance Initiative  

Carbon Balance Initiative is an NGO initiative born out of the University of Oxford. We strive to put conditions on fossil fuel extraction to protect the climate from any remaining fossil fuel use. We work with the climate movement, academia and policymakers to achieve 1.5°C, store carbon, and protect nature. Read more about the Carbon Balance Initiative at www.carbon-balance.earth.  

About the University of Oxford

Oxford University has been placed number 1 in the Times Higher Education World University Rankings for the ninth year running, and number 3 in the QS World Rankings 2024. At the heart of this success are the twin-pillars of our ground-breaking research and innovation and our distinctive educational offer.

Oxford is world-famous for research and teaching excellence and home to some of the most talented people from across the globe. Our work helps the lives of millions, solving real-world problems through a huge network of partnerships and collaborations. The breadth and interdisciplinary nature of our research alongside our personalised approach to teaching sparks imaginative and inventive insights and solutions.

Through its research commercialisation arm, Oxford University Innovation, Oxford is the highest university patent filer in the UK and is ranked first in the UK for university spinouts, having created more than 300 new companies since 1988. Over a third of these companies have been created in the past five years. The university is a catalyst for prosperity in Oxfordshire and the United Kingdom, contributing £15.7 billion to the UK economy in 2018/19, and supports more than 28,000 full time jobs.