Demystifying Carbon Dioxide Removal
September roundup
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Dear all,
Last month's Inflation Reduction Act (discussed in detail last month) has given a big boost to direct air capture (DAC) projects in-waiting. We take a look at some of the record-breaking deals already announced - including plans to build the world's largest DAC facility and the biggest carbon removal purchase to date.
We also have a look at new perspectives shining a light on the tension between stronger regulation vs rapid expansion of carbon removals in the voluntary carbon market. Verification schemes are proposed, but some think they don’t go far enough and government intervention will be needed to ensure climate targets are not compromised.
Finally, we take a look at new research exploring how CDR potential, impacts and policy differ around the world. For example, physical limits of CDR capacity in some countries may result in more carbon removal taking place in the Global South, with potential justice implications.
As always, please feel free to share this newsletter with anyone who may be interested. Sign up here and click here to see an archive of previous editions. And feel free to get in touch at any time with suggestions or feedback - it’s always great to hear from you.
Till next time,
Victoria
victoria...@gsccnetwork.org
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IRA ‘game changer’ for CDR
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Last month, we looked at what the Inflation Reduction Act (IRA) had on offer for carbon removal technologies, and it seems the impact is already being felt. US climate tech company CarbonCapture announced that it plans to build the largest DAC project in the world, aiming to capture and store five million tonnes of CO2 a year by 2030. This is a big undertaking, especially given that the 19 DAC projects that have come online since 2010 collectively remove just 0.008 million tonnes of CO2 each year, equivalent to about seven seconds of global CO2 emissions from energy production in 2021. CarbonCapture CEO Adrian Corless said that the IRA accelerated the launch of “Project Bison” by a couple months, giving his company and the DAC industry the financial support and long-term certainty needed to scale up the technology.
Bison aims to capture five times as much CO2 and be completed a full year ahead of 1PointFive’s DAC plant, which was previously projected to be the world’s largest plant. 1PointFive is a subsidiary of Occidental Petroleum, which has announced plans to achieve net-zero carbon emissions by 2050, thanks in part to the IRA’s support to accelerate Occidental’s DAC technology.
Another record-breaking announcement was made at New York Climate Week by British power generator Drax for the biggest carbon removal deal ever. Drax signed a memorandum of understanding with carbon finance firm Respira International that could see Drax sell up to two million carbon removal credits from proposed biomass projects in the US. Drax CEO previously said the IRA would be “game-changing” for carbon removal companies looking to invest in bioenergy with carbon capture and storage (BECCS) and, if enacted, would enable Drax to kick start its pipeline of BECCS projects in the US. But Drax’s sustainability claims continue to come under fire, and new allegations are coming to light about the company's role in environmental racism in the US South. In the UK, where Drax currently emits more carbon than any other single energy plant, MP’s and environmental groups are warning against providing the company any further government support.
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Reining in ‘wild west’ VCMs
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In the past year, carbon removal has attracted a lot of funding from governments, as well as venture capital (a record USD 882 million in this year's second quarter alone), but a significant amount of funding is also supplied by the voluntary carbon market (VCM) - around USD 172 million, according to one source. While carbon removals currently only make up a small part of credits sold, VCMs are projected to grow extremely fast, to 50 times their current size in the next eight years according to the Taskforce on Scaling Voluntary Carbon Markets.
Indeed carbon removal companies and marketplaces are getting excited about selling credits. Just this month, carbon marketplace Puro launched a new digital carbon asset to facilitate carbon removal prepayments and Salesforce launched the Net Zero Marketplace to make buying carbon credits easy and transparent. However, most of the time credits are sold before the carbon has even been removed. According to cdr.fyi, an open-source website that tracks publicly disclosed carbon removal credits, only 1.1% of all purchases have been delivered. Moreover, VCMs are currently unregulated and often referred to as the ‘wild west’.
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"An analysis of EU national policies finds that CDR is still on the fringe of discussions and that member states are not ready for large-scale removals"
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CDR startups and organisations are thinking about how VCMs can be shaped to help foster carbon removal while ensuring rigour, accuracy and accountability in the amount of carbon being removed from the atmosphere. In a white paper, the Carbon Business Council highlights the need to establish a minimum credit quality and to streamline verification processes. In line with calls for stronger monitoring, reporting and verification, Climeworks just released its first certification methodology for carbon removal via DAC, with “stringent standards” for measurement and reporting. CDR advanced market commitment Frontier fund and carbon analytics non-profit CarbonPlan also developed a metric to represent the confidence with which carbon removal can be accurately quantified.
But developing stricter standards is not going to be easy. Verra, the world’s largest certifier of carbon offsets, recently criticised an initiative to improve governance, claiming “few, if any, credits would pass” under proposed new rules. Verra’s criticisms underscore the tension involved in reconciling company demands to rapidly scale up VCMs with the need to introduce tougher standards to guarantee project quality. NGO Bellona suggests that without government intervention, expansion of CDR will undermine broader climate mitigation efforts, recommending that governments regulate CDR “before markets run amok”.
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Global disparities in CDR
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A lot of policy and literature on CDR is either global or country-specific, but how does CDR vary between different regions? A new study analysed the CDR potential of 182 countries based on physical and economic factors that affect the performance of these technologies, such as availability of land, energy and geological storage sites. The study suggests that OECD countries will not be able to conduct enough CDR domestically when quotas based on equity sharing principles are applied, and will need to collaborate with regions with surplus CDR potential, such as Latin America and Sub-Saharan Africa, through financial support and investments. The higher allocation of carbon removal to OECD countries is due to their liability for historical emissions as well as their ability to fund removal.
Expanding CDR, of course, comes with a set of trade-offs. New research focusing on the Global South explores the potentially unjust implications of different land-based negative emissions technologies (NETs) for land, labour, capital and politics in rural areas. These impacts are based on the indicators used by integrated assessment models (like those used by the IPCC) that assume land-use conversion for NETs will occur predominantly in the Global South, and normalise speculative options like BECCS. Another paper analyses what farmers think about soil carbon sequestration as a climate strategy. It finds that co-benefits are a strong motivator for adoption, especially given lack of regulatory policies for soil carbon sequestration and low carbon prices. However, there are significant knowledge gaps as data is highly skewed to studies in North America, Europe and Australia.
Moving to the EU, an analysis of national policies finds that CDR is still on the fringe of discussions and that member states are not ready for large-scale removals. Only Portugal has a legally-binding and quantified CDR target. Belgium, Hungary, France, the Netherlands, Spain and Sweden also quantify removal targets (albeit not legally-binding) and the German climate protection law has targets for natural sinks. The authors suggest that the EU Commission's proposal on CDR certification may trigger necessary public debate, promote societal consensus on CDR and help adopt laws that prioritise emissions reduction over removal targets.
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Useful resources this month
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Interview: Climeworks assesses progress at its Icelandic facility, Orca, the largest DAC plant in the world, one year into its operation.
Conference: Join MIT Technology Review’s conference on technology solutions for climate change on 12/13 October 2022.
List: A list of who’s who in the world of global direct air capture.
Commentary: The IPCC’s recent recommendations for policymakers appear to have been influenced by fossil fuel stakeholders.
Study: Enhanced weathering may in fact destabilise the natural carbon cycle in tropical peatlands that act as important carbon sinks and protect against coastal erosion, potentially offsetting any carbon uptake.
Roadmap: Part II of the Geochemical Negative Emissions Technologies Roadmap, published by MIT and other climate research institutes, lays out needs and high-priority initiatives across six key elements required for the responsible and effective deployment of geochemical NETs.
Proposal: Researchers propose that stratospheric aerosol injection could reverse ice loss by partially blocking sunlight, helping to manage rising sea levels.
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Each month the demystifying carbon dioxide removal newsletter digs into the world of CDR to bring you the latest stories on everything from carbon credits and net-zero plans to nature-based solutions (NbS) and new technologies. Feel free to forward this email to your colleagues!
Contact me at victoria...@gsccnetwork.org
Mailing address
Neue Promenade 6
10178 Berlin
Germany
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