Putting the ‘net’ in net zero: scaling up carbon removal technologies in Europe [Promoted content]

How will Europe remove millions of tonnes of carbon dioxide from the atmosphere to keep on track for its climate commitments – that’s a key question facing the next European Commission and Parliament.    

Kasia Wilk, Head of Public Affairs and Policy, EU and Asia, Drax.

There’s growing consensus about the critical role carbon dioxide removal technologies will play in the fight against climate change. They quite literally put the ‘net’ in net zero.

Although reducing emissions remains the key focus of international climate efforts, the UN’s IPCC estimates that between 5 and 10 gigatonnes (Gt) of carbon dioxide will need to be removed from the atmosphere per year globally by 2050 to keep international climate goals on track. That’s the same as removing three times the total emissions of the EU (c. 3.1 Gt) or two times the emissions of the US (c. 4.7Gt).

Research by McKinsey predicts the carbon removal sector could be a $1.2 trillion industry by 2050. To reach that potential it needs to scale up, and quickly. Making this happen requires every tool in the policy toolbox including tax incentives, subsidies and, crucially, supporting the growth of the voluntary and compliance markets to create demand for carbon removal credits (CDRs).

The EU Commission is making progress.  Earlier this year it announced its 2040 climate target recommendation for a 90% net reduction of GHG emissions, including an ambition to deliver up to 400 MtCO2 of carbon removals.

Released on the same day, the Industrial Carbon Management Strategy provides a roadmap for the removal and storage of millions of tonnes of carbon dioxide in the next three decades. The strategy identifies the need to develop policies and support mechanisms for carbon removal technologies, including accounting for the CDRs they generate in the EU Emissions Trading Scheme.

The EU has also reached an agreement on the Carbon Removal Certification Framework. This certification mechanism will ensure carbon removal projects, and the credits they produce, are high integrity.

Nevertheless, the current legislative framework remains fragmented and this nascent industry needs more support including via the exchange of credits on voluntary carbon markets – one of the key sources of funding currently available.  A healthy CDR market is fundamental to stimulate investment in essential carbon removal technologies, like bioenergy with carbon capture and storage – or BECCS for short.

The Green Claims Directive, currently being discussed in the European Parliament, has an important role to play here.

The Directive aims to prevent organisations making false or misleading claims about their ‘green’ credentials to consumers. Only companies that have verified their claims are able to make them and they could be fined if they don’t. The Parliament’s current position on CDRs is that “compensation claims” based on the use of carbon credits may only be made in respect of the residual emissions of a trader.

Residual emissions are yet to be properly defined but what that will mean in practice is that companies will be dissuaded from buying CDRs until they have reduced their existing emissions by around 90-95%. While that may sound OK in theory, in practice it will lead to a rush to buy CDRs from 2040 onwards which the market won’t be able to support. The credits just won’t be there, nor will the technologies and projects that provide them.

The market, and the technologies they support, need stable and steady support to scale up over time. This supports learning, innovation and cost reductions as technology developers have find better and cheaper ways of doing things.  To help provide that, companies should be encouraged to purchase the permanent CDRs they’re likely to need to hit net zero in parallel with making emissions reductions, on one proviso. The CDRs must be high integrity, permanent, transparent and not interfere with absolute emissions reduction efforts and targets. This would align the Directive with the European Sustainability Reporting Standards which takes a similarly conditioned approach.

It is essential to have appropriate rules to avoid greenwashing, but that should not come at the expense of facilitating the necessary investment in permanent carbon removals. As we raise the bar for carbon removals with Carbon Removal Certification Framework, the EU must also ensure that the right policy frameworks and demand-side levers are in place to support the needed gigatonne scale up of carbon removals or it will fall short of its climate ambition.

About Drax

At Drax, our aim is to become a global leader in carbon removals. We are currently progressing plans to deliver two BECCS projects – one in the UK and one in the US – by 2030, with both projects able to permanently remove a combined volume of 7 million tonnes of carbon dioxide from the atmosphere each year.