Deciphering the Policy-Technology Nexus: Enabling Effective and Transparent Carbon Capture Utilization and Storage Supply Chains

Abstract

In response to the global imperative to address climate change, this research focuses on enhancing the transparency and efficiency of the Carbon Capture Utilization and Storage (CCUS) supply chain under carbon tax. We propose a decision-making framework that integrates the CCUS supply chain's optimization model, emphasizing carbon tax policies, with a blockchain network. Smart contracts play a pivotal role in automating the exchange and utilization of carbon emissions, enhancing the digitalization of the CCUS supply chain from source to sink. This automation facilitates seamless matching of carbon sources with sinks, efficient transfer of emissions and funds besides record-keeping of transactions. Consequently, it improves the monitoring, reporting, and verification processes within the CCUS framework, thereby simplifying compliance with regulatory mandates for net emission reductions and carbon taxation policies. By eliminating reliance on third-party verifiers, our blockchain-based CCUS system reduces verification costs and ensures reliable tracking of emissions, mitigating the risk of carbon leakage. Policymakers and stakeholders gain valuable insights to optimize the CCUS network design, specifically considering the impact of carbon tax. This study represents an advancement in sustainable practices, providing a robust tool for decision-makers engaged in climate change mitigation efforts.