Carbon pricing, fiscal terms and upstream asset values

This report is currently unavailable

Contact us

Submit your details to receive further information about this report.

For details on how your data is used and stored, see our Privacy Notice.

- FAQs about online orders
- Find out more about subscriptions

04 March 2021

Carbon pricing, fiscal terms and upstream asset values

Report summary

CO2 emitted during the extraction of oil and gas accounts for less than 4% of total emissions associated with fossil fuels; nearly 90% of emissions occur in their final combustion. And very few countries currently require producers to either pay a carbon tax or participate in an emissions trading scheme. But prudent upstream companies are assuming that carbon charges are a question of when, not if, and including these variables in their asset valuation models. This analysis addresses the following questions: Where do upstream carbon charges currently exist, and how do they interact with other fiscal terms? What are the differences between carbon charges introduced in royalty/tax and production sharing contract (PSC) fiscal systems? What is the potential impact of carbon charges on upstream asset values?

Table of contents

  • Executive summary
    • Carbon tax
    • Emissions trading schemes (ETS)
    • Carbon charges and upstream asset valuations
    • Carbon charges and royalty / tax fiscal systems
    • Carbon charges and PSC fiscal systems
    • There may be trouble ahead...

Tables and charts

This report includes 10 images and tables including:

  • Carbon tax rates for oil and gas producers
  • Norwegian field CO2 emissions and ETS free credits
  • EU ETS average trading price (US$/tonne, nominal)
  • Current carbon prices in tax or ETS systems
  • Reduction in asset values because of carbon charges
  • Impact of new carbon charge under different royalty/tax systems
  • Gross and net carbon charges (US$/tonne, nominal)
  • Norway’s tax revenue from upstream operations 2017-2021
  • Late-life production vs carbon intensity
  • GPS under different methods

What's included

This report contains:

  • Document

    Carbon pricing, fiscal terms and upstream asset values

    PDF 1.15 MB