Statutory obligation
Carbon Clean-up Certificates
A clean-up certificate scheme is an emerging policy instrument that permits industrial emitters to emit CO2 in the present, while obligating them to remove it in the future, along the ‘polluter pays principle’.
Description
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.
Key Design Features
Primary Objective
Permits industrial emitters to emit CO2 in the present, thus accruing ‘carbon debt’ against a pre-determined carbon budget, and allocates the responsibility to remove the excess CO2 at a later date.
Obligated Entity
Industrial emitters covered by an ETS
Storage Method
Engineered removals, such as BECCS and DACCS.
Target & Timeline
Timeline and target are tied to the EU carbon budget. Obligations to
Compliance Criteria
Obligated entities can purchase clean-up certificates instead of, or alongside, conventional allowances, apply collateral against the carbon debt and deliver verifiable CDR to repay the debt.
Enforcement
A public institution, such as a “Carbon Central Bank”, manages implementation, acts as a lender of last resort for carbon debt and serves as the enforcement mechanism.
Current Developments
The concept of a CTBO continues to gain traction as an alternative to carbon pricing. The idea has a longer history in UK policy debate than in other countries, but it has yet to be adopted into law. It was proposed as an amendment to the UK's 2015 Energy Bill, where it was rejected due to opposition from lobby groups, and resurfaced as an amendment in the 2023 Energy Act, which was withdrawn without a vote. The underlying principle was reflected in Chris Skidmore's independent 2023 'Mission Zero' net zero review. The idea also gained traction in the EU: the Dutch government reviewed the CTBO in 2023, and the EU's post-COP30 submission to the Brazilian COP Presidency's roadmap process identified extended producer responsibility frameworks as a tool to be considered for transitioning away from fossil fuels.
Looking Forward
The CTBO remains in the research and consideration phase rather than active policy development. In recent years, a growing number of civil society organisations, industry groups, and academic institutions have come out in favour of the policy, but a binding government commitment remains unlikely in the near term. The CTBO is likely to remain a reference point for potential future policy introduction and industry discourse, rather than one poised for immediate adoption.
Related Resources
Browse allMarkets and Mandates: Policy Scenarios for UK CCS Deployment & Exploring the Role of a Carbon Takeback Obligation
This report assesses long-term UK policy options for accelerating carbon capture and storage (CCS) investment.