Good question – but bear in mind that the global warming community has been trying to get global agreemnents for decades with limited success, perhaps this is the wrong question – or at least time to look for an alternative question.
So we’re starting with the question of ‘how could we make this work in the EU’?
or a red hydrocarbon scheme could also be introduced for a specific industry, for a group of companies, even a single company.
From a market point of view, a red hydrocarbon scheme will mean increased costs, but also possible benefits. For example, some airlines are spending lots of money developing biofuels because they would like a low carbon way of fuelling planes – they are already willing to spend more money.
From a regulatory point of view – it would be best to introduce this across a large country or group of countries. For example if the UK or Netherlands unilaterally decided to adopt a red carbon scheme (which would include imports as well as production) it would make their emissions uncompetitive with other countries. But the EU is probably big enough to adopt a system – there are already plenty of regulatory processes which make the EU uncompetitive with other parts of the world (such as safety laws) but the EU still manages.
Our theory is that a red hydrocarbon scheme could gradually be introduced in different parts of the world, different industries, different companies – until the net gets wider and wider. In the end, you only have Saudi Arabia or Russia’s domestic energy consumption which doesn’t go red (assuming that Saudi Arabia and Russia are not interested in carbon capture at all, which may not be true).