Engineered carbon removals need to penetrate voluntary carbon markets to scale at the rate necessary to avert climate catastrophe, argues BeZero Carbon’s Ted Christie-Miller
We are standing at a climatic tipping point. What we do in the next five years will define our world for the next 50 years. Keeping warming at a manageable rate – 1.5C above pre-industrial levels – will now rely on both fast-paced emissions abatement and vast amounts of carbon removal, both engineered and nature-based. To achieve the latter, we need to harness the power of the market to bring down costs and help the carbon removal market scale.
We need to take a lot of carbon out of the atmosphere. The UN Intergovernmental Panel on Climate Change (IPCC) says large scale carbon removal is now “unavoidable” and we will need 10 billion tons of removal annually by 2050. To put this in perspective, by 2050 we will need to remove 16 times the amount of carbon sequestered by the Amazon Rainforest every year, just to keep us on track with climate targets.
It goes without saying that this removal cannot come from trees alone. Engineered carbon removal – from methods like direct air capture and enhanced weathering – are steadily becoming, rightly or wrongly, the great hope for saving planet earth from catastrophic climate change. The UK’s Climate Change Committee has forecasted that 10 per cent of the UK’s abatement by 2050 will need to come from engineered removal.
This will influence the make-up of the voluntary carbon market, with a shift from avoidance credits to removal credits taking place. A new report from BeZero Carbon projects that by 2030 as much as 56 per cent of credits on the market will be removal credits, with their share increasing further towards 2050. Of this 56 per cent, analysis projects over half could be from engineered removal credits . A significant increase for removal from their current share of one fifth of credits issued, zero of which are engineered removal.
The market is currently too immature for engineered carbon removal credits. At the moment, the vast majority – 96 per cent – of engineered removal credits are bought bilaterally, from suppliers to consumers, not through an intermediary. On top of this, just one in ten – 11 per cent – of sold engineered carbon removal credits represent actual carbon removal. The remainder corresponds to removal that will happen at some point in the future.
At current pricing, engineered removal credits are no comparison for their nature-based counterparts. The current price of direct air capture credits ranges from $320 – $2050 per tonne, while nature solutions like tree planting remain between $3 – $50 per tonne. If nothing changes, these technologies will remain prohibitively expensive, which will stop them from scaling at the level necessary. Analysis from BeZero finds that even with engineered removal credits reducing to $100 per tonne by 2050, annual costs could be as high as $8.5tr – roughly triple the size of the entire UK economy. If the pricing of carbon removal technologies is not brought down these costs will be even greater.
The power of the market – specifically the voluntary carbon market – needs to be utilised to make these solutions affordable and therefore able to scale. A reliable and robust market will increase competition, improve resilience and stability, quicken integration and make removal accessible to more potential customers. If this can be achieved, engineered carbon removal can replicate the success of former green technologies such as solar PV and drastically bring down the cost curve.
To help engineered removal to reach scale, three things are urgently needed.
First, accreditation needs to be improved. To be valuable and tradable, credits need to demonstrate a level of integrity. Accreditation is necessary to demonstrate feasibility, durability and viability and to maintain standards across this emerging marketplace. At present, not all registries have engineered carbon removal credits available.
Second, ratings need to be implemented. There is a lack of correlation between price and quality in the voluntary carbon market. Ratings can address this market gap. As engineered removal projects are relatively expensive, it is important that their relative risk is demonstrated in a way that allows customers to understand the reason behind their prices.
Lastly, and crucially, strong public sector support is needed. Governments have an important role in fostering innovation. This is no less true in the case of engineered carbon removal development. Policymakers can help to de-risk these new technologies, increasing demand and enhancing the market in the process.
The challenge to scale engineered carbon removal from basically zero to 165 billion tons in just thirty years is a monumental task. To achieve it, removal companies must integrate and embrace the market infrastructure. If they do, costs could be reduced, capacity could be increased and gigatonnes of CO2 could be removed from the atmosphere.
Ted Christie-Miller is head of carbon removal at BeZero Carbon