Carbon dioxide captured from the air or from factories could be pumped into underground reservoirs or sold for dry ice. Photo: 123rf
Government experts say they have not been able to quantify the risks of carbon dioxide reservoirs leaking into the environment, or the cost of cleaning up if they do.
The government is consulting on a regime for letting companies earn carbon credits by capturing planet-heating gas from the air or from factories directly, and pumping it into underground reservoirs such as depleted oil and gas fields.
The CO2 could also be sold for uses like dry ice, welding and beer-making,
Ministry for Business, Innovation and Employment (MBIE) consultation documents said the risks of leaking from CO2 pumping sites could be assessed during the permitting process. The question of who would have permanent liability for any decommissioned underground storage sites was still up in the air, and open for consultation, too.
MBIE looked at similar regimes in Australia and the European Union for options.
It estimated carbon capture and storage (called CCS) could remove almost five million tonnes of carbon dioxide from the atmosphere in New Zealand over the ten years from 2026.
Some of that could be from gas field operators re-injecting excess CO2 from gas extraction back into the ground, rather than venting it to the air, as they do now.
Geothermal electricity generators in the central North Island already carry out re-injection back underground in their geothermal fields. However, as an earthquake-prone country, New Zealand needs to be careful where it puts its storage sites, previous research has found.
MBIE said letting companies offset their emissions using CCS could make gas production cheaper, potentially shoring up the country's shrinking supply of fossil gas. That was because the companies would not need to buy as many carbon offsets from other sources to cover their climate impact.
According to MBIE, injecting carbon dioxide underground could work out cheaper than the current options, which are planting trees, buying carbon credits from the government, or cutting emissions.
The move to open up CCS follows lobbying from the fossil fuel industry in Aotearoa, which said it was a "vital piece of the puzzle" for meeting climate goals.
The ministry's preferred way forward is to offer incentives for CCS is by changing the Emissions Trading Scheme so companies can earn credits for carbon capture, in the same way forestry companies earn credits for growing trees now. The credits could be sold, or used to offset companies' own bills for pumping greenhouse gases into the atmosphere.
Globally, the fossil fuel industry has embraced the concept of carbon capture, raising the suspicion of climate activists.
So far, carbon capture projects backed by oil companies overseas have taken billions in investment but absorb only a tiny proportion of those companies' emissions.
Climate groups accuse the fossil fuel industry of "predatory delay" - of talking up the prospects of unproved technology to suck away large amounts of carbon dioxide, in order to divert government focus away from cutting fossil fuel consumption.
The Intergovernmental Panel on Climate Change (IPCC) said scaling up carbon capture would be essential to keep the planet inside 1.5C or 2C heating, averting the much worse death tolls and disasters associated with 2C-plus of warming.
But the IPCC's pathways assume CCS happens alongside swift and deep reductions in the main sources of emissions: burning coal, oil and gas.
At a media announcement this week on the government's climate strategies, RNZ asked Climate Change Minister Simon Watts if he could reassure people that the promise of catching and storing carbon dioxide emissions would not be used to relax focus on carbon targets.
"Absolutely," he said.
"We have to be looking at the opportunities in terms of innovation to reduce emissions across all aspects of industry in this country.
"We are open to looking at any mechanism which is validated, accredited and is legitimate in terms of emissions reduction, and if it achieves that outcome, then we should be able to utilise that technology."
MBIE is seeking feedback on many aspects, including how to monitor sites to prove emissions storage is real and permanent.
Energy Minister Simeon Brown said capturing CO2 would help provide a "least cost transition to a low emissions economy" and attract investment in innovation.