Markets and Mandates: Policy Scenarios for UK CCS Deployment & Exploring the Role of a Carbon Takeback Obligation

Abstract

This report assesses long-term UK policy options for accelerating carbon capture and storage (CCS) investment, in support of the government's ambition to store at least 50 megatonnes of CO2 annually by the mid-2030s. Drawing on scenario analysis and consultations with over 20 experts across government, academia, industry and civil society, the report compares the current policy suite – centered on revenue support and the UK Emissions Trading Scheme (ETS) – against a scenario incorporating a Carbon Takeback Obligation (CTBO), which would require fossil fuel producers and importers to store a rising share of the CO2 embedded in their products. The analysis finds that reliance on the ETS alone is unlikely to secure sufficient private investment to scale CCS from the 2030s, risking continued dependence on public subsidies. The authors argue that a policy-mix with a well-designed mandate, alongside the domestic ETS, could help establish a more self-sustaining storage market, provided risks such as reduced competitiveness and carbon leakage are actively managed. The report concludes that a CTBO is not a standalone solution but one element of a broader policy mix.