Explore existing and emerging policy instruments.

Emerging policies

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• The Carbon Takeback Obligation (CTBO) is a proposed mandate-led policy that would require fossil fuel producers and/or importers to permanently store a rising share of the CO2 associated with their operations and products, reaching 100% by around mid-century. The underlying logic is similar to Extended Producer Responsibility (EPR) schemes, which place the cost of managing a product’s end-of-life impact – such as packaging waste or electronics disposal – on the producer rather than the consumer or the state. The CTBO applies the same principle to carbon: producers take the responsibility for the eventual disposal of the CO2 their product will generate.

  Carbon takeback obligations (CTBO)

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• A clean-up certificate scheme is an emerging policy instrument that permits industrial emitters – typically covered under an Emissions Trading Scheme (ETS) – to emit CO2 in the present, while obligating them to remove it in the future, along the ‘polluter pays principle’. Accumulated carbon emissions in the present take the form of a “carbon debt”. Each certificate represents one unit of the "carbon debt" with one conventional emission allowance in an ETS, effectively allowing firms to borrow against a future carbon budget rather than staying within a fixed near-term cap. Clean-up certificates may reduce cumulative climate damage while increasing fiscal revenue, provided they substitute for, rather than add to, conventional ETS allowances. Scholars argue that a certificate mix of roughly half clean-up certificates and half conventional allowances can simultaneously lower damages, raise revenue, and reduce carbon prices and mitigation costs. Because CDR must occur years or decades after the emissions, the concept raises questions of default risk and long-term liability. To address these risks, a public institution, such as a Central Carbon Bank, can act as a “lender of last resort” to guarantee obligations are met.

  Carbon Clean-up Certificates

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In force and enacted policies

• Article 23 is one of the regulatory mechanisms for scaling carbon capture and storage (CCS) in the EU’s 2023 Net Zero Industry Act (NZIA), which established a framework to ensure EU access to a resilient and secure supply of net-zero technologies. It is a first-of-kind mechanism placing an upstream obligation on domestic oil and gas producers to invest in and develop CO2 injection capacity by 2030, totaling 50 MtCO2/yr capacity across obligated entities. The 50 MtCO2/yr is divided among the top 44 domestic oil and gas producers in the Union, calculated pro rata based on production data between 2020 and 2023. Compliance is defined as securing a storage permit and at least one investment contract with an emitter rather than operational injection capacity by 2030. The 11 member states in which the oil and gas producers are based have an obligation to both enforce the obligation through penalties for non-compliance and support it through permit streamlining, infrastructure coordination and administrative support.

  Article 23 of the net zero industry act

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Proposed and under review

Announced and withdrawn