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Document Type

Article

Subject Area

Special Section

Abstract

The aim of reaching a low or net-zero carbon emissions economy sustainably within the medium to long term requires technologies that capture carbon dioxide emissions from industrial, manufacturing, and energy-related point sources. Applying carbon capture, utilization, and storage (CCUS) systems in these sectors can help reduce the emissions intensity of products, services, and energy production that cannot be efficiently or reliably produced otherwise. In this regard, offtake and transportation agreements serve as key instruments for negotiating the terms and conditions for the transfer of captured carbon oxides, including delivery and subsequent use or sequestration. CCUS projects are designed to capture carbon emissions in sufficient quantities from different industrial or energy-related sources, followed by processing and transportation to predesignated underground storage sites or utilization points. It is necessary to effectively connect operators and resources from different interdependent aspects of the project via carefully structured and bankable agreements. This Article discusses how offtake and transportation agreements provide a transactional framework for outlining the respective roles and obligations of project developers, equity investors, and other interested parties in an ideal CCUS project. The discussion highlights the applicable project risks and reviews the evolving U.S. policy measures and incentives driving commercial interests and investment decisions regarding such risks. The contractual tools are essential for the deployment of CCUS applications at the right scale needed to meaningfully contribute towards decarbonization objectives provided that firm commitments from project participants are secured and feasibility issues are properly addressed by the parties.

DOI

10.59643/1942-9916.1506

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Copyright © 2023 by the WYOMING LAW REVIEW unless otherwise noted. Except as otherwise provided, copies of any article may be made for classroom use, provided that: (1) Copies are distributed at or below cost; (2) The author and the journal are identified; (3) Proper notice of copyright is affixed to each copy, and (4) The WYOMING LAW REVIEW is notified of the use.

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