Liability and financial responsibility frameworks for carbon capture and sequestration

Carbon dioxide capture and sequestration (CCS) is an important option for reducing CO2 emissions from human activities.  There is growing interest in CCS as renewable energy and energy efficiency alone are unlikely to deliver the emission reductions necessary to stabilize atmospheric concentrations of greenhouse gases by mid-century.1 CCS involves capturing CO2 generated from fossil fuel combustion, transporting it and injecting it deep underground into geological reservoirs where it can remain sequestered indefi nitely. This issue brief focuses on geological sequestration of CO2 in deep saline formations and depleted oil and gas fi elds.

Although the technical and economic barriers to CCS have been well documented, relatively less attention has been paid to liability and the attendant fi nancial responsibility associated with the siting and operation of CCS projects. This issue brief examines liability and fi nancial responsibility frameworks potentially applicable to CCS projects by considering existing analogs and options for mitigating the near- and long-term risks of CCS technologies. It concludes that signifi cant jurisdictional differences exist with respect to state liability and financial responsibility, which will likely infl uence the siting, construction and operation of CCS projects.

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