New Zealand to Allow Carbon Capture, Storage to Reduce Emissions

(Bloomberg) -- New Zealand will incentivize companies to capture and store carbon dioxide underground by allowing them to offset other greenhouse gas emissions, helping the nation’s push toward becoming a net-zero economy by 2050.

Legislation to put in place a Carbon Capture, Utilization and Storage framework will be introduced in 2025, Climate Change Minister Simon Watts said Friday in Wellington. A CCUS system typically collects and stores carbon dioxide from sources like thermal generators or factories burning fossil fuels.

In New Zealand, CCUS activities will be included in the emissions trading scheme, allowing businesses to claim credits against other emissions liabilities, Watts said.

“Businesses that capture and store carbon dioxide will be rewarded through the ETS,” he said. “This will help reduce emissions obligations for New Zealand businesses as we progress toward a low-emissions economy.”

A CCUS framework fulfills a recommendations made in the nation’s second emission reduction plan, published in December. Officials estimate CCUS will reduce net carbon dioxide emissions by 1.9 megatons over the 10 years through 2035.

The government will require any CCUS project to undertake a thorough assessment of storage site suitability and proposed operations, followed by ongoing monitoring of the sites and injection operations to ensure no leakage.

The new policy comes as the government has overseen a series of green reversals including loosening emissions regulations for the agriculture sector. Last year, it changed rules to slow the rate at which farmland is being converted into forestry for carbon credits.

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