The document discusses a study on local community benefit sharing mechanisms for CO2 storage projects. It finds that (1) benefit sharing should be part of stakeholder engagement and social impact management, not separate; (2) benefits can include maximizing direct/indirect project impacts or community investment programs; (3) for CCS, benefits mainly accrue to capture plant communities, so storage communities may need revenue sharing or investment programs to address the "benefits gap."

1. 2013 Community Benefit Sharing Study: Local Community
Benefit Sharing Mechanisms and Options for CO2 Storage
Projects
13 November 2013
COP19 Warsaw: IETA CO2 Capture Project Side Event
CO2 Capture Project (CCP) Policy & Incentives Team

2. Study background and aims
Background to the study:
• In 2011, the CO2 Capture Project conducted a review and analysis of carbon, capture and
storage (CCS) stakeholder issues.
• One of the key findings from the study was that local communities are more likely to become
actively involved and oppose CCS project developments when there are no apparent benefits
to the community itself.
This study aims to explore this finding further, and investigates experience with local
community benefit sharing in the oil and gas sector, and options for local community benefit
sharing in the context of a CCS development.

3. Context – what is benefit sharing?
• The concept of benefit sharing stems from the acknowledgement that the siting of some
facilities can have real or perceived negative impacts on host communities that could outweigh
the real or perceived benefits to those communities brought by the development.
• This can be the case for large developments which bring regional or national benefits, but
where the costs (in terms of visual impact, noise, etc.) are borne for the most part by the host
community, which may feel distant from the regional or national benefits
o E.g. oil and gas extraction / processing projects; mining projects; dams; renewables; landfills; large
infrastructure developments; CCS developments.
• Experience with past project developments suggests that project acceptance by local
communities can be influenced by the extent to which negative impacts are minimised, and
positive impacts (e.g. employment; local procurement of goods and services) are maximised.

4. Findings: Benefit sharing within the broader
social risk and impact management process
A review of case studies and discussions
with project managers and stakeholder
management experts highlights that:
• Benefit sharing is not a stand-alone
exercise. It should be one part of the
stakeholder engagement process, and
will form part of a project’s social
management plan.
• Before benefit sharing is discussed in
detail, developers should first seek to
identify and manage any negative
impacts from a development.
Benefit sharing

5. Findings: Benefit sharing options (1):
Maximising direct and indirect positive impacts
• International experience with benefit sharing
highlights a number of different forms of
benefits associated with developments.
• Benefits to local communities can stem directly
or indirectly from the project itself, or can be
shared through specific community
investment programs.

6. Findings: Benefit sharing options (2):
Community investment programs
• Another way to ensure local communities benefit
from projects is through direct investment in local
communities
o By paying money into a community fund or Trust; or
o By investing in specific community projects.
• Principles for a successful community investment
program include:
o Involving multiple stakeholders in the planning &
implementation of projects, including local /
community stakeholders
o Establishing a fund Committee / Board including the
project developer and key community stakeholders to
manage the fund
o Designing a set of Principles and Objectives to govern
how the fund is managed and where money is spent
o Developing metrics to allow the success of the fund
and related projects to be measured over time
o Ensuring that the community leads the decision on
how funds are spent

7. Findings: Adopting a strategic approach to
community benefits
• It is important to adopt a strategic approach to community benefits to ensure there is a positive
and long-lasting impact on communities. The following principles should apply if a benefit
sharing program is to be effective and successful:

8. Analysis: Benefit sharing in the CCS context (1)
• Benefit sharing can be (and has been) applied in the context of a CCS development.
• With CCS projects, it is important to note that most of the direct and indirect positive impacts associated
with a development (jobs, procurement, etc.) will apply to communities hosting the CO2 capture plant.

9. Analysis: Benefit sharing in the CCS context (2)
CCS benefits gap analysis
• Considering different CCS project
types or ‘scenarios’, it is apparent
that there is frequently a lack of
direct and indirect project benefits at
the storage stage – often where the
greatest perceived impacts lie.
• There may be more positive impacts
for communities hosting storage sites
where enhanced oil recovery (EOR)
(i.e. carbon capture, utilisation and
storage, CCUS) is taking place
(Scenario 3).
• However, overall, there appears to be
a potential ‘benefits gap’ for
communities hosting CCS storage
sites.

10. Analysis: Options for benefit sharing with CO2
storage host communities
• (Non-EOR) CCS projects may need to think creatively about how to fill the ‘benefits gap’ at the
storage stage, and how to create a value proposition for communities hosting a CO2 storage site.
• An analysis of the drivers for a CCS project may help to identify a preferred approach to sharing
benefits with storage communities.
Commercially-driven projects could
consider revenue sharing or
community investment for CO2
storage host communities
Government-backed projects could
consider shared Government /
developer community benefit and
investment programs, and could
consider how direct and indirect
positive impacts can be distributed
across CCS stages

11. Summary of main conclusions
• Local community benefit sharing can help to address the potential imbalance between local
costs vs. national or international benefits associated with some major developments.
• Benefit sharing options include:
o 1) maximising the direct and indirect positive impacts of a project (such as employment, local
procurement, and wider economic benefits); and
o 2) enhancing local benefits through strategic community investment programs.
• In the context of a CCS project, benefit sharing needs to be considered particularly at the
storage stage where frequently the greatest public concerns lie, yet where project activities are
unlikely to offer significant benefits to communities in terms of jobs, procurement, local spend,
etc.
• Options for benefit sharing with CCS storage communities might include:
o Revenue-sharing (if projects are commercially-driven) – CO2 credits; revenues from EOR; etc.
o Community investment programs (if projects are government-funded) – e.g. education programs, on-site
visitor / learning centres, environmental initiatives, social initiatives, etc.
• Benefit sharing is not a ‘silver bullet’ when it comes to local acceptance: it must be incorporated
into a robust social management process and impact management.