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CO2 removal market needs rapid acceleration to hit 2050 net zero goals

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Almost all current CDR comes from conventional removal methods on land (2 GtCO2 per year), primarily via planting trees and managing soils. Nearly all net zero pathways however require significant amounts of novel CO2 removals.

  • Nearly 100% of all of today’s carbon removal is nature based, with less than 0.1% coming from engineered removals.
  • 1300x more CDR from new technologies may be required to hit net zero targets, twice as much as from trees and soil.
  • Engineering carbon removals are expected to make up half of the market within the next few years.

The state of the carbon removal markets have been highlighted in the first State of Carbon Dioxide Removal report, which convened over 20 experts in the field of CDR and was led by Oxford University’s Smith School of Enterprise and the Environment.

According to the report, almost all current CDR comes from conventional removal methods on land (2 GtCO2 per year), primarily via planting trees and managing soils. Countries need to maintain and expand this, approximately doubling in 1.5°C pathways and increasing by around 50% in 2°C pathways by 2050 compared to 2020 levels.

In a warming climate though, this is going to be a huge challenge, as there will need to be trade-offs around land use. Doing this successfully will require dedicated policies and management. More than 120 national governments have a net-zero emissions target, which implies using CDR, but few governments have actionable plans for developing it, which presents a major gap in planning.

Virtually all pathways to net zero also require new CDR technologies, such as BECCS, biochar, enhanced rock weathering and DACCS. Yet new CDR technologies make up only a tiny fraction of current CDR (0.002 GtCO2 per year). Closing the CDR gap requires rapid growth of these new CDR technologies, by a factor of 1,300 on average by 2050.

“To limit warming to 2°C or lower, we need to accelerate emissions reductions. But the findings of this report are clear: we also need to increase carbon removal, too, by restoring and enhancing ecosystems and rapidly scaling up new CDR methods,” says report author Dr Steve Smith of the University of Oxford’s Smith School of Enterprise and Environment. “Many new methods are emerging with potential. Rather than focusing on one or two options we should encourage a portfolio, so that we get to net zero quickly without over-relying on any one method.”

What exactly is carbon dioxide removal (CDR)?

CDR involves capturing CO2 from the atmosphere and storing it durably on land, in the ocean, in geological formations or in products. Examples include reforestation, biochar, bioenergy with carbon capture and storage (BECCS) and direct air carbon capture and storage (DACCS). Some means of storage are longer-lasting and less vulnerable to reversal than others.

CDR is not the same thing as carbon capture and storage (CCS). To count as CDR, a method must capture CO2 from the atmosphere. While some CDR methods such as BECCS and DACCS will use the same CO2 transport and storage infrastructure as CCS, CCS usually refers to a set of industrial methods for the capture of CO2 from fossil sources.

Few offsets come from CDR but integrity, additionality and permanence are increasingly key

As countries and companies set out their net zero strategies, most if not all are reliant on carbon offsets, especially in hard to abate sectors. While the compliance carbon markets are still awaiting final decisions on some of Article 6. There is movement in terms of internationally transferred mitigation outcomes (ITMO) but the market needs to massively scale up, especially with the voluntary carbon markets sitting at around $2 billion.

Yet as the carbon markets mature they face increasing scrutiny. The recent scandal about the potential over-issue of afforestation credits, alongside criticism that many offsets do little to actually cut emissions, has led critics to attack the use of offsets once again.

Stakeholders are demanding action on integrity, in internal strategy and behaviour and in use of offsets. Purchasers increasingly require carbon credits to have verified emissions reduction impact, additionality and permanence, carbon removal would seem like a natural match. Yet CDR is not included in the EU-ETS, it’s not part of Paris Agreement’s Article 6 arrangements, and clearly that needs to change.

All pathways with any chance of keeping the world to a temperature increase of 1.5°C requires massive scale up of CDR. It is also going to require stronger commitments on, and delivery of, emissions reduction.

CDR will not be enough to hit net zero targets on its own

CDR is not a silver bullet, as pathways that limit warming to 2°C or lower require deep cuts to emissions in addition to, not in place of, CDR. The report argues that dependence on CDR can be limited by reducing emissions fast and using energy more efficiently.

While research, innovation and public awareness of CDR have expanded, closing the CDR gap requires urgent and comprehensive policy support. It’s important to note that the first verified CDR credits were only released early in 2023. The amount of CDR deployment required in the second half of the century will only be feasible if there is substantial new deployment in the next 10 years – what’s known as novel CDR’s ‘formative phase’.

“Innovation in CDR has expanded dramatically in the past two years, as measured by investment in capacity, publicly funded research, and patents. But given the orders of magnitude the CDR industry needs to grow by mid-century to limit warming, there is an urgent need for comprehensive policy support to spur growth,” said co-author Professor Gregory Nemet of the University of Wisconsin-Madison’s La Follette School of Public Affairs.

Report intends to formalise analysis of the CDR  market

The analysis of the market is intended to regularly inform researchers, policymakers and practitioners on the state of progress, by systematically collecting and analysing the vast amount of data and developments in many parts of the world.

“Right now critical information on CDR is widely dispersed and difficult to access. This hampers progress,” said author Jan Minx from the Mercator Research Institute on Global Commons and Climate Change (MCC) in Berlin. “The state of CDR research, development and policy lags behind – similar to renewables 25 years ago. Good decisions and accelerated progress in the field of CDR require adequate data. This report will help improve this situation step-by-step with the wider CDR community.”

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