Making Carbon Storage a Mandatory Cost of Oil Production

Current debates often collapse into binary choices: either allow new extraction to support domestic energy or block it to meet net-zero targets. Carbon capture and storage (CCS) is frequently relegated to an afterthought, framed as a voluntary promise or a state-funded infrastructure project. A more effective mechanism is to attach a measurable carbon storage obligation directly to production licenses, such as those currently under review for the Rosebank and Jackdaw fields in the UK.

This "takeback" model mirrors extended producer responsibility seen in other sectors, where those introducing waste into the economy bear the burden of its disposal. By requiring companies to certify the permanent storage of an increasing fraction of the carbon contained in their fuels, governments would create the reliable demand signal currently missing from the market. While 78 billion tonnes of theoretical storage capacity exist beneath the UK continental shelf, commercial capture remains hindered by unreliable revenue streams and thin margins.

Linking storage to production would transform CCS from a policy aspiration into a functional compliance market. Producers would retain the flexibility to build their own storage, contract with independent providers, or trade certified storage credits. To prevent this from becoming a vehicle for greenwashing, the obligation must follow a legally fixed trajectory, eventually approaching 100% of the carbon produced. Rather than replacing policies that encourage electrification or efficiency, this mandate would internalize the environmental cost of fossil fuels, ensuring that if new extraction is permitted, it actively finances the transition infrastructure required for a decarbonized economy.