Carbon Storage Due Diligence: A Cornerstone of Low‑Carbon Solutions
As global decarbonisation accelerates, carbon capture and storage (CCS) has moved from a niche technology to a strategic asset for companies pursuing low‑carbon solutions. For investors, developers, and governments alike, carbon storage due diligence is a critical step in assessing the viability, risk, and long‑term sustainability of CCS projects. Rigorous due diligence helps ensure that CO₂ injected underground will remain securely stored — and that the project delivers its promised climate and financial benefits.
Why Carbon Storage Due Diligence Matters
Underground carbon storage is not a simple “plug and store” operation. Geological formations vary enormously in their ability to trap CO₂ safely, and the financial and regulatory risks are significant. Without proper due diligence, a storage project can face unexpected permeability issues, leakage risks, or long-term liabilities that undermine its value and credibility.
A robust due diligence process therefore serves several vital purposes:
- Validates that the chosen reservoir is technically suitable
- Evaluates long-term containment and monitoring strategies
- Estimates capital and operating costs with greater confidence
- Identifies regulatory and environmental risks
- Provides assurance to stakeholders (investors, regulators, host communities) that storage will be safe and durable
Components of Effective Carbon Storage Due Diligence
A comprehensive due diligence programme typically covers the following areas:
- Geological Assessment
Experts evaluate subsurface data — including seismic surveys, well logs, and reservoir characterisation — to understand pore space, cap rock integrity, and geomechanically behaviour. This assessment is critical for determining whether a formation can safely hold CO₂ for decades or more. - Reservoir Modelling and Simulation
Using advanced reservoir simulation, consultants predict how the CO₂ plume will behave over time. They assess risks such as pressure build-up, fault activation, or leakage. This modelling helps estimate how much CO₂ can be injected and safely stored, guiding project design and capacity decisions. - Well Integrity Review
Each injection well must maintain long-term integrity. Due diligence analysts review well design, materials, and construction plans to assess the risk of failure or degradation over decades. - Monitoring, Reporting, and Verification (MRV)
Ongoing monitoring is non-negotiable. Due diligence teams advise on monitoring systems, verification protocols, and mitigation measures in case of unexpected behaviour. Rigorous MRV ensures that the project remains compliant and safe. - Regulatory, Environmental & Legal Risk Assessment
Storage projects must meet regulatory standards for CO₂ injection, storage, and liability. Expert advisers evaluate legal frameworks, permitting pathways, and long-term liability models to make sure that the project remains compliant and financially resilient. - Financial & Commercial Analysis
Beyond the geology, due diligence must assess the economics: cost of injection infrastructure, transportation, site operations, monitoring, and potential liability. Advisors estimate cash flows, capital expenditures, and return profiles under different scenarios.
Technical Due Diligence in Carbon Storage
Independent technical due diligence ensures that all subsurface and engineering assumptions are verified. Firms provide lender- or investor-friendly technical reviews of capture, transport, and injection infrastructure. By validating design assumptions, injection strategies, and long-term storage plans, technical due diligence gives financial backers confidence that the CCS project is built on solid science.
Managing Risk Through Insurance and Liability Frameworks
The financial risks associated with CCS go beyond technical performance. Insurance and risk assessments evaluate scenarios such as underperformance, unintended migration, or regulatory changes. A strong due diligence report should recommend strategies for risk allocation, liability sharing, and contingency planning throughout the life of the project.
Why This Matters for Low‑Carbon Solutions
High-quality carbon storage due diligence ensures that CCS projects are safe, durable, and economically viable. Through rigorous evaluation of geological, engineering, financial, and regulatory factors, organisations can de-risk carbon storage investments and support scalable low-carbon solutions. This comprehensive approach allows stakeholders to confidently pursue decarbonisation while maintaining the integrity and value of their projects.