California Institute for Energy and Environment (CIEE)

While California has been at the forefront in adopting an aggressive climate change mitigation policy, it has taken a more measured and tentative approach toward creating an enabling policy and a regulatory framework for carbon capture, utilization and sequestration (CCUS) technologies to contribute to greenhouse gas (GHG) reductions. In 2005, Governor's Executive Order S-3-05 required that California reduce GHG emissions to 1990 levels by 2020 and to 80% below 1990 levels by 2050. In 2006, State Assembly Bill 32 codified the 2020 goal into law. In 2006, the California Legislature required two California agencies, the California Energy Commission and the Department of Conservation, to produce a report recommending how the state could facilitate commercial adoption of geologic sequestration from industrial sources. In 2010, three state agencies, the Energy Commission, Public Utilities Commission, and Air Resources Board, convened the California Carbon Capture and Storage Review Panel to make recommendations on specific policy, institutional, and regulatory changes necessary for California to enable commercial-scale carbon capture and geologic storage projects. Since 2006, several legislative bills have been introduced to establish regulatory authority, liability, and address pore space ownership issues, but none have made it into law. To meet the state's aggressive targets, especially to 2050 goal, will nevertheless require widespread adoption of CCUS technologies, according to studies by the California Council on Science and Technology. California contributes 7.5% of the total GHG emissions in the USA, or 1.8% of global GHG emissions. Over half of this currently is from point sources, but that proportion will increase as the state pursues electrification of the transportation sector. Trajectories of future GHG emissions growth suggest mitigation technologies must be implemented at rates on the order of 10–20 million tonnes of GHGs removed per year. The cap-and-trade system recently adopted in California to address the GHG reduction mandates of Assembly Bill 32 would seem to encourage pursuit CCUS technology projects by industrial emitters, but uncertainties preclude developing viable business cases. Uncertainty includes a lack of data on the costs of capture and storage and the lack of cap-and-trade accounting protocols for CCUS technologies. Although these protocols are scheduled to be developed, they will lag the initialization of cap-and-trade in 2012.