5.2 Analysis before Government take

The sensitivity analyses of the costs of representative CO2 transport and injection projects discussed above exclude the effect of the fiscal terms (Government take). They show that the costs range from US$3 to US$67 per tonne avoided.

This implies that, ignoring the effects of the fiscal terms, the potential price of carbon would need to be at least US$3 to US$67 per tonne of CO2-e avoided before the CCS projects could be economically justified.

For CO2 transport and injection projects, the volume of CO2-e avoided is of a similar order of magnitude to the volume of CO2-e injected. Therefore, we could say that to justify a CO2 transport and storage project, the minimum price of carbon per tonne injected would need to be roughly the same as the costs per tonne avoided quoted above.

In practice, however, the costs of CO2 transport and storage or the potential revenues from CO2 price might be subject to the same fiscal terms as applies to the natural gas projects that give rise to the emissions. If so, the financial effects would be significantly different. This aspect is discussed in the following section.