In recent years, many tech companies (Google, Microsoft, Amazon, Shopify and more) have been motivated by cultural or regulatory pressure to set net-zero emissions targets. Many of these companies are relying on carbon dioxide removal (CDR) technologies to achieve their goals and have funded CDR providers, exchanges, and verification providers. Since a fully decarbonized economy will require all sectors and not just big tech, to decarbonize, these platforms are an opportunity for other industries to achieve net-zero emissions, in particular for industries that are very difficult to directly decarbonize like aerospace, steel, and cement. As CDR expands, it is vital for potential investors and purchasers of carbon credits to have clear metrics to evaluate CDR producers, trading platforms, and verification methods. In this article, Alcimed explores six principles to guide purchasers into CDR technologies.
CDR technologies cannot displace emissions reductions, which is why it is most appropriate for hard to decarbonize sectors.
Emissions reductions are essential to limit temperature increases. This is because the scale of human emissions is large, and CDR will require decades to reach high scales of activity. This scale-up time is not available due to the need to minimize temperature changes. For example, the IPCC 6th Assessment Synthesis Report strongly states that to limit temperature increases to below 1.5ºC, CO2 emissions need to be reduced 48% by 2030 and 99% by 2050.1AR6 Synthesis Report: Climate Change 2023 (ipcc.ch) Since current carbon dioxide removal projects operate at small scales, experts estimate that even with substantial investment, full-scale up will require decades. As shown by the emissions reduction figures above, this time is not available.
However, some industries are more difficult to decarbonize than others, for example, aerospace and commodities. In the aerospace industry, sustainable aviation fuel is currently prohibitively expensive while in the steel industry, the high temperatures required for steel production are difficult to achieve with renewable energy. Since these industries’ products are essential for modern life, production levels must be sustained. As a result, these industries are particularly appropriate sectors to use CDR services to offset the CO2 emissions that result from their activities.
Buyers should investigate the ease with which a possible CDR technology can be monitored and validated. Some technologies, for example direct CO2 capture from the atmosphere are easier to technically verify. In these cases, the carbon is removed and converted to a measurable, storable form in one place, while alternative technologies like ocean alkalinity enhancement induce CO2 capture over large, diffuse areas. The diffusion of CO2 removal over a widespread area makes the measurement of CO2 capture more difficult. If CDR providers have not consistently conducted measurements that their technologies reliably remove CO2, they are not delivering on their promise to buyers and are not trustworthily sequestering CO2.
It is also important for possible purchasers to consider the full scope of emissions associated with a carbon dioxide removal project. For example, energy intensive CDR technologies may not remove very much net CO2 if the electricity powering the CDR plant is produced with fossil fuels.
Despite the large investments recently made into CDR, current carbon dioxide removal plants and pilots capture and store a minute amount of the total CO2 that will need to be sequestered to reach customers’ climate goals. As a result, a key ingredient for CDR success is scalability from small pilot scales to large facilities. Some CDR technologies will be easier to scale up than others. For example, approaches that require arable land such as Bioenergy with carbon capture and storage (BECCS) will compete with use of the required land for agriculture or timber. This land-use conflict places an upper limit on BECCS’ potential. In addition, approaches with high resource and infrastructure requirements like direct air capture (DAC) will face more scale-up challenges than other proposals because deployment at large scales will require the construction of several high-tech DAC facilities which must also be supported by renewable power if the net-emissions of the DAC plant are to be negative.
Find out how our team can support you in your decarbonization consulting needs >
Some CDR technologies rely on large-scale ecosystem engineering. While some ecosystem engineering approaches like wetland or seagrass restoration are viewed as unambiguously positive, other approaches like marine nutrient fertilization could have unforeseen complications. Marine nutrient fertilization proposals would add iron, phosphorous, or nitrogen to large regions of the ocean. These additions would induce a phytoplankton bloom which would then (if all goes according to plan) sink into the deep ocean and stay there for the long-term. This approach could have unintended consequences on marine ecosystems such as creating a decline in large fish and predator abundances in tropical oceans. As a result, a well-thought-out, carefully created research plan to evaluate these risks would need to be executed before pursuing such a strategy.
Importantly, operating all CDR technologies at the scale needed to significantly lower atmospheric concentrations presents risks of unintended consequences. As a result, investors and buyers should examine producers to see if they have forestalled these risks. This examination is particularly important for ecosystem engineering approaches, such as the ocean fertilization approach discussed above.
The most effective carbon dioxide removal projects to address climate change are those that remove additional CO2 beyond what would have occurred with no intervention. For example, if a conservation NGO plans to restore a forest or wetland to expand habitat for an endangered species, the resulting sequestered CO2 would be removed without a CDR investment. By asking, “would this project happen without a CDR investment?”, the principle of additionality allows investors and buyers to maximize the carbon reduction of their investment. Examining purchases with this principle is essential to avoid accusations of greenwashing by the press or the public.
Some CDR options remove CO2 more permanently than others. For example, ecosystem restoration strategies like reforestation store carbon in plant life. Since most plants have lifespans of years to decades, CO2 stored in plant tissue is not removed from the atmosphere for long periods of time. On the other hand, technologies that transform CO2 into geologically stable carbonate offer much greater permanence.
While reducing emissions is the clearest path to address climate change, some sectors like aerospace and commodities are inherently difficult to decarbonize. The CDR industry offers opportunities to companies in these essential industries to meet climate goals. The six principles discussed here offer a framework for possible investors and buyers in hard to decarbonize sectors to evaluate CDR producers, exchange operators, and verification providers.
If you are considering investments in CDR to meet climate goals, Alcimed can support you in your CDR evaluation projects, from identifying novel CDR strategies to investigating the efficacy of current producers’ products and more. Don’t hesitate to contact our team!
About the authors,
John, Consultant in Alcimed’s Healthcare team in the USA
Cross-sector
Carbon Capture, Utilization and Storage, or CCUS, is in the spotlight nowadays in the industry. Still, between utilization – that consists in reusing the CO2 as a feedstock in the industry – and ...
Energy - Environment - Mobility
What strategic role for renewable gases from wet biomass achieve to achieve the objectives of carbon neutrality?
Energy - Environment - Mobility
The environmental impact of renewable energy, like wind power, is not neutral. Discover 5 ways to reduce their ecological footprint.