GasNZ helping shape a new regulatory regime for CCUS

Carbon capture and storage (CCS) is an industrial technology used to remove carbon dioxide that would otherwise be released into the atmosphere, by capturing it and permanently storing it – usually by injecting it underground into depleted oil or gas fields.

CCS technology has been used for decades to increase the efficiency of oil production.  That technology is well-understood and effective. As the focus on the climate impacts of greenhouse gases has grown, CCS (and its cousin, carbon capture, utilisation, and storage - CCUS) have been hailed by the Intergovernmental Panel on Climate Change and by the International Energy Agency as a necessary tool to decarbonise a range of industrial processes, if we are to reach net zero emissions by 2050.

Unlike many countries, New Zealand does not have a dedicated regulatory regime for CCUS.  As a result, emissions reductions achieved using CCUS would not be recognised within our Emissions Trading Scheme (unlike, say, emissions reductions from forestry), heavily penalising it as an option.  This, and uncertainties around how other laws might apply, mean that oil and gas companies have held off investing in CCUS in New Zealand as a way to achieve emission reductions.

In July, the Minister for Energy released a proposal to implement a CCUS regulatory regime in New Zealand.  It proposes measure to recognise CCUS emission reductions or removals in the ETS, and ensure that potential investors have clarity around the other laws that will apply to permitting and operating CCUS facilities.

GasNZ supports most of the proposals in the consultation documents, which will allow businesses to consider investing in CCUS for emissions reduction on an even footing with other emissions reduction options. 

We urge the government to implement the new regime quickly, and to model it on overseas CCUS regulatory regimes (such as in Australia), to facilitate international investment.

You can read our full submission.