Global Sustainability Agenda #16: Carbon dioxide removal (CDR) in the pursuit of 2050 net zero targets

Carbon dioxide removal (CDR) in the pursuit of 2050 net zero targets

Global Sustainability Reality

Sucking Carbon from the Air Becomes A Lead Strategy

The U.S. Department of Energy will award up to $100 million for projects that remove CO2 from the atmosphere (Scientific America)

European Union: New rules on greenwashing and durability (Global Compliance News)

MEPs seek to limit companies’ use of carbon offsets in anti-greenwashing move (Euro News)

Britain’s energy price cap set to fall to 2-year low from April (Financial Times)

DOE hydrogen hubs need better community engagement (E&E News)

Japan funds climate transition (IFRE)

Global Sustainability Business Impact

What Does Net Zero Really Mean? (Forbes)

Carbon removal sector buoyed by strong growth in corporate demand (S&P Global)

AI has a large and growing carbon footprint, but there are potential solutions on the horizon (The Conversation)

State-owned energy companies are among the world’s most polluting – putting a price on carbon could help (The Conversation)

Why understanding full value-chain carbon intensity is trumping the colour of hydrogen (Wood Mackenzie)

The path forward

Emissions Context

In the context of emissions reduction, achieving net zero CO2 emissions involves offsetting anthropogenic (human-caused) CO2 emissions with anthropogenic carbon removal efforts. This equilibrium ensures that the amount of carbon dioxide emitted by humans is balanced by the amount removed from the atmosphere, thereby preventing further accumulation of CO2 and averting additional warming attributable to human activities. Notably, achieving net zero CO2 emissions does not exacerbate global warming through increases in other greenhouse gases.

Conversely, net zero greenhouse gas emissions (GHGs) encompass eliminating emissions of all greenhouse gases, including methane and nitrous oxide. The neutralization of these gases holds the potential to mitigate rising temperatures.

The concept of net zero CO2 emissions can be applied globally, contributing to overall temperature stabilization, or at smaller scales, such as national or corporate levels, where entities commit to halting their contributions to further climate warming.

Neutralizing emissions involves counterbalancing residual emissions through carbon removal methods, ultimately achieving a state of net zero. The remaining emissions at net zero are often referred to as residual emissions.

Our collective failure to promptly address emissions reduction necessitates increased reliance on carbon dioxide removal (CDR) technologies to avert catastrophic climate change. CDR involves deliberately extracting CO2 molecules from the atmosphere, thereby reducing atmospheric CO2 concentrations and storing it securely.

While natural processes such as ocean absorption, rock weathering, and photosynthesis by plants naturally remove CO2 from the atmosphere, the rapid increase in CO2 levels over the past two centuries underscores the need for deliberate intervention. The Intergovernmental Panel on Climate Change (IPCC) suggests that limiting global warming to 1.5 degrees Celsius requires rapid emission reductions and achieving net negative emissions by around 2050.

Estimates suggest that CDR efforts may need to remove as much as 10 billion tonnes of CO2 annually by 2050 to reach this ambitious goal. However, the exact figure depends on the pace of emission reductions.

While some emissions are inevitable, particularly in industries lacking low-emission technologies, prioritizing emission reductions is paramount. CDR should primarily serve to compensate for truly unavoidable emissions and facilitate net negative emissions in the latter half of the century.

Human activities that enhance natural carbon sinks, such as reforestation, are beneficial but insufficient, given the scale of the challenge. Hence, there’s a pressing need to develop and scale up technological CDR solutions, often termed “engineered CDR.”

Carbon markets play a pivotal role in funding both nature-based and technological CDR activities. However, without robust policy support and increased investment, current funding levels may not suffice to scale up novel, primarily technological CDR solutions.

As CDR gains importance in achieving net-zero targets, it becomes a crucial consideration for businesses across sectors. For instance, companies aiming to achieve net zero under initiatives like the Science Based Targets must offset any residual emissions through CDR, particularly pertinent for sectors with challenging-to-reduce emissions.

Types of CDRs

CDR solutions include a variety of activities. Although there is no single way of classifying CDR activities, we often differentiate between two broad categories: nature-based and technological-based CDR.

These are some of the main activity types under each of them:

Source: McKinsey (2023)

Currently, nature-based CDR dominates, but increasing interest in novel methods suggests a shift in proportions. Challenges associated with nature-based CDR, such as land use and permanence issues, highlight the importance of exploring technological CDR options.

Technological CDR solutions, though complex and costly, offer potential advantages in land use efficiency and carbon storage permanence. However, ensuring their sustainability and minimizing ecological and social impacts is imperative.

Closing the removal gap to achieve net zero requires a combination of nature-based and technological CDR solutions. Nature-based solutions offer cost-effective removal options in the near term, while technological solutions provide durable removals essential for long-term effectiveness.

Policies and international Initiatives

Policy support is vital for scaling up CDR efforts globally. Many countries have signaled their intent to utilize CDR to meet climate targets, but significant investment and broader policy frameworks are necessary to realize the full potential of CDR.

International initiatives like carbon markets established under the Paris Agreement, along with national policies such as tax credits for CDR projects, are crucial drivers for CDR adoption. However, continued efforts from both public and private sectors are essential to overcome existing challenges and scale up CDR activities effectively.

Willingness to pay

While several real-world factors constrain carbon dioxide removal (CDR), it differs fundamentally from finite resources like land. The primary constraint for CDR isn’t depletable resources but rather the willingness to invest. In essence, if desired, we could deploy significantly more CDR than we’ll ever require.

Utilizing CDR today doesn’t diminish future capacity; it enhances it. For instance, converting biomass waste into biochar prevents emissions that would have otherwise occurred, effectively utilizing resources that would have gone to waste. This principle holds true for nearly all removal solutions except for forestation. Demand for CDR not only addresses carbon emissions in the present but also ensures the development of necessary capacity for future requirements.

However, there is doubt regarding the limit of CDR deployment. The theoretical limit is exceedingly high. We could deploy extensive amounts of CDR if willing to bear the costs. For instance, envision large fleets of nuclear power plants operating Direct Air Capture facilities in regions like the deserts of Oman, where ample geological storage capabilities exist. Storage capacity underground isn’t a limiting factor either. In the long term, there’s room for thousands of gigatonnes, far surpassing foreseeable needs.

However, the practical limit is primarily determined by the number of entities willing to invest in removals. The main obstacle to deploying significant amounts of CDR would be if too few organizations were motivated to invest in it. While challenges such as supply chains, permitting, and workforce training also play roles in setting limits, demand is the primary driver in overcoming these hurdles. During the ramp-up phase of CDR, any restrictions on its use will inevitably hinder its deployment.

Regarding the future use of CDR, it should, at present, not be a concern. Once sufficient CDR capacity is established, governments could restrict its use for offsetting purposes and compel companies to reduce emissions closer to zero. For instance, limiting the amount of CDR allowed in programs such as the EU Emissions Trading Scheme (ETS) could be a viable strategy. Paying for CDR today lays the groundwork for governments to allocate resources for optimal future uses.

Despite the potential of near-term CDR deployment, certain caveats exist. Reliance on cheap CDR in the future may impede emission reduction efforts today. To mitigate this risk, setting separate targets for removals and emission reductions can ensure that efforts aren’t diverted from reducing emissions while deploying removals. Planning for scarcity while building for abundance is essential. Additionally, all CDR initiatives must incorporate safeguards against ecological and social harm, and energy-intensive CDR processes should be self-sufficient rather than drawing energy from non-decarbonized grids.

Regardless of the pathway to achieving climate targets, the scale of CDR must increase dramatically—from hundreds of thousands of tonnes removed annually today to billions of tonnes in the coming decades. This expansion is essential to counterbalance residual emissions and address historical emissions to mitigate temperature rise effectively. Encouraging sustainable support for removals from all stakeholders is imperative, representing the most realistic pathway to achieving these targets.

Beatriz Canamary

Beatriz Canamary is a consultant in Sustainable and Resilient Business, Doctor and Professor in Business, Civil Engineer, specialized in Mergers and Acquisitions from the Harvard Business School, and mom of triplets. Today she is dedicated to the effective application of the UN Sustainable Development Goals in Multinationals.

She is an ESG enthusiast and makes it possible to carry out sustainable projects, such as energy transition and net-zero carbon emissions. She has +15 years of expertise in large infrastructure projects.

Member of the World Economic Forum, Academy of International Business and Academy of Economics and Finance.