Carbon removals are full of tantalising promise. Once the technology matures, it should be able to suck gigatonnes of carbon dioxide from the air and permanently store it in underground reserves, counteracting hard-to-abate emissions from sectors like agriculture, transport and industry.
The obvious risk is that polluters treat it as a magical solution and an excuse to keep emitting CO2 at unsustainable levels. It’s up to regulators in the EU and elsewhere to ensure that the technology is used as a supplement, and not an alternative, to emissions reductions.
“Removals are not a silver bullet. They will not solve everything,” says Wijnand Stoefs, a Brussels-based researcher at Carbon Market Watch, a not-for-profit watchdog that focuses on carbon markets. “Removals need to be on top of emission reductions, not instead of.”
There is currently no known technology to produce cement, raise cattle, or operate commercial flights – among other things – without causing harmful emissions. Carbon removals will be necessary to offset the emissions from these applications – but are insufficient for the EU to achieve its net-zero emissions goal by 2050.
For many industries, reducing or directly capturing emissions is economical only up to a certain point, beyond which carbon removals are a better solution. Hydro, a Norwegian aluminium producer, currently captures about 80 per cent of the carbon dioxide emitted during its manufacturing process and is in the market for removals to offset the remaining 20 per cent, says its director Liv Rathe.
At the same time, carbon removal technology is unlikely to scale up enough to offset emissions at current levels. According to one estimate, the nascent global carbon removal industry will need to grow by more than 40 per cent per year for the next 26 years. That’s a hugely ambitious figure even with emissions reductions in play.
New tech, new regulation
Some carbon removal technology involves creating natural carbon sinks, for example by planting forests or encouraging the growth of algae. But with limits to how much these methods can be scaled, most of the industry buzz is around novel approaches such as “biochar” which locks carbon into dead plant matter.
Currently, these new methods are limited to scattered projects worldwide and have yet to demonstrate they can operate at scale. North America contributes an estimated 48 per cent of carbon removals with biochar, with Europe following at 17 per cent, according to a recent report mapping the state of the carbon removal industry across the globe.
As the technological landscape evolves, so too are the regulatory frameworks that will govern carbon removals. The EU is furthest along, with the Carbon Removals Certification Framework (CRCF) nearing completion. It was adopted by the European Parliament in April this year and is ready to enter into force within weeks of being approved by national governments in the Council of the EU.
“There's a need to establish a regulation for carbon removals,” says Tobias Haas, a political scientist at the Research Institute for Sustainability at the Helmholtz Centre in Potsdam. “The EU CRCF is the first important step in that direction.”
The CRCF is a voluntary scheme that will make it clear what can count as carbon removal and what can’t, while also seeking to put numbers on the climate benefit of various types of carbon removal technologies. Only certified projects would count toward a country’s progress in meeting the EU’s emissions reduction targets.
The new EU framework has nevertheless been criticised for failing to address whether companies will be able to buy carbon removal credits or certificates and use them for offsetting purposes. This would allow a steel producer, for instance, to offset the gases released during the manufacturing process.
Stoefs describes this offsetting model as the “worst possible” option. “Removals cannot just pick up the tab for everything at the end,” he says, stressing the need for a continued regulatory pressure on industries to decarbonise.
Emerging market
Despite the current lack of a regulatory framework or financial incentive to pursue carbon removals, some tech companies have begun to do so. Last year Microsoft, Stripe and Shopify became the first companies in the world to pay a carbon removal company, Swiss-based Climeworks, to filter their carbon emissions out of the air and store them underground.
Still, many companies outside the tech sector have less cash on hand and would need the regulatory environment to provide the right incentives for carbon removals.
“You don't have a business case in Europe,” says Rathe, adding that Hydro is already the greenest aluminium producer in the world but risks losing out against overseas competitors with less stringent environmental requirements. “The EU is moving too slow in this area because it's been looking at it for many, many years, but it doesn't move.”
She urges EU lawmakers to move more quickly: “The regulations for how to use carbon removals need to be in place as soon as possible.”
For its part, the European Commission says it’s “providing funding for research, development, and deployment of permanent carbon removals under our funding programmes to help mature the technologies and lower their costs.”
But Stoefs says that a clear regulatory framework would also encourage investment in the carbon removal sector itself by giving clarity about the size of the potential market and how much money could be made. That way, he says, “the sector knows what it's working towards: We are taking a commitment on, we are actually going to be doing this stuff.”
For Haas, however, EU policymakers are right not to rush into a policy that might not be fit for purpose, for example by allowing certificates to be issued for low-quality removals. “If there’s very fast implementation, there's also a high risk that there will be mistakes in the [design],” he says. “So, I think we aren’t too slow with the timeline.”