California has established an ambitious goal to technologically capture, transport and permanently store underground 100 million tons of carbon dioxide (CO2) annually. This is equal to about 25% of the state’s current total emissions. Of the 100 million tons, 25 million tons would come from industrial point sources, while 75 million tons would come from the atmosphere via direct air capture and biomass carbon removal.

There are multiple obstacles to deliver these targets. The most significant is a lack of carbon infrastructure in the form of pipelines and storage sites. For example, a cement facility cannot justify investing in a carbon capture retrofit without the ability to offtake its CO2 for transport and storage. A second key obstacle is the risk of asset monopolization. Early operators of pipelines and storage sites have a natural incentive to charge higher prices to capitalize on their unique market position, inhibiting carbon capture deployment. A third key obstacle is cost. Direct air capture is the notable example, with current costs of $1,000/ton far beyond most (if not all) decarbonization options.

We are pursuing a suite of policies to overcome these obstacles. A primary focus is on developing new institutional models for carbon capture, removal and storage, such as public ownership or a utility model. Such deployment models are central to the UK’s carbon strategy and are designed to both limit the risk of monopolization and incentivize more rapid infrastructure development. We are also advancing policies to buy-down the initial cost of removal, including via procurement as well as establishing a Regional Direct Air Capture Hub in California.

For more information, contact Amanda DeMarco (amanda@csgcalifornia.com) or Sam Uden (sam@csgcalifornia.com).