Posted on June 23, 2022 by Savita Bowman
We often focus clean energy policy discussions on the next generation of technologies that emit less, or even no carbon dioxide (CO2). Those innovations are incredibly exciting, but as more and more companies are implementing bold goals to reach “net zero,” it’s imperative that we consider the great deal of CO2 already in the atmosphere. When we look at solutions, removing this existing CO2 needs to be part of the discussion. The good news is there are tremendously exciting activities and technology developments happening to address this challenge.
“Carbon dioxide removal” or “CDR” is becoming a common term in climate and clean energy policy discussions. But what is it? ClearPath is beginning to tackle the what, but also the how.
What is CDR?
Carbon is the foundation of all life, but too much of it turning into carbon dioxide and getting into the atmosphere is what causes climate challenges. The total amount of carbon on our planet does not change. However, where the carbon is located — as CO2 in the atmosphere or on Earth — is in flux.
Here’s another way to think about it: greenhouse gases are building up in the atmosphere like a bathtub being filled with water. But, like a bathtub, if CO2 is emitted faster than plants can absorb it, a little overflow is not ideal and significant overflow will cause all kinds of problems.
Right now, there’s more CO2 in the atmosphere than there should be. The National Academy of Sciences estimates that roughly 10 gigatons (Gt) of CO2 will need to be removed yearly by mid-century to reach net-zero – this doubles to 20 Gt globally by 2100. Though planting more trees to absorb more CO2 is part of the solution, trees do not remove CO2 as quickly or permanently as engineered carbon dioxide removal technologies. What’s needed are innovative solutions that can permanently remove significant amounts of CO2 and keep it out of the atmosphere, and grow and support economic and community development.
A few solutions are starting to gain popularity, like Carbon Engineering’s direct air capture machines or Charm Industrial’s biomass to bio-oil process, but these solutions alone are not enough — this is where policy steps in.
How can policymakers and the private sector accelerate CDR solutions?
A new proposal in the U.S. Senate to advance carbon removal: The Carbon Removal and Emissions Storage Technologies (CREST) Act was introduced by Sen. Susan Collins (R-ME) and Maria Cantwell (D-WA) on June 16, 2022.
The CREST Act would build on CDR research, demonstration, and development (RD&D) authorized by past legislation to expand the Department of Energy’s (DOE) scope of carbon removal and storage technologies. The Energy Act of 2020 authorized the first comprehensive federal carbon removal research and development program, and the bipartisan Infrastructure Investment and Jobs Act (H.R. 3684) invested $3.6 billion in direct air capture (DAC) technology. The CREST Act creates a path toward diversifying CDR and storage research programs at DOE and the Department of Interior (DOI), quantifies the net impact of carbon removal projects, and establishes an innovative pilot carbon dioxide purchasing program to accelerate market commercialization of high-quality CDR solutions.
With increasing private and public sector commitments to reach net-zero emissions by 2050, companies are scrambling to invest in quantifiable, durable, and verifiable CDR solutions. Despite increased interest, current cost estimates show that private sector investment alone is not sufficient to research and deploy carbon removal pathways. The federal government has historically played a key role in scaling up new technologies through research, increased testing, and enhanced public-private partnerships. Removing carbon dioxide from the atmosphere could follow that same model.
On the upside, investments in CDR have soared since 2021 – Bloomberg noted that private sector investments in CDR reached $400 million in four years from 2017 – 2020, then spiked to $2 billion in four months of 2021. Just this summer, a business coalition led by Stripe launched the $925 million Frontier Fund to purchase permanent carbon removals over the next eight years. Additionally, the developer of the world’s largest direct air capture facility, Climeworks, recently closed $600+ million from investors
Federal policy is also already advancing CDR technologies, including DAC. A few notable advancements include:
- $3.5 billion appropriated in the bipartisan infrastructure law for direct air capture (DAC) hubs, and
- The announcement of the Department of Energy’s (DOE) Carbon Negative Shot.
ClearPath is plugging in and recently hosted an educational briefing with Congressional staff on the importance of adding CDR to the climate solutions toolkit.
ClearPath Chief Strategy Officer Jeremy Harrell moderated an expert panel discussion with Tom Michels of United Airlines,
Nan Ransohoff, Head of Stripe Climate, highlighted that carbon removal efforts are substantially nascent and deserve government attention. The U.S. has the opportunity to become a leader in this space because “we cannot control what countries like China do, but the US can lead on CDR innovation at home and provide the high-quality solutions other countries aren’t willing to,” said Ransohoff.
When asked about the challenges facing the deployment of carbon removal, Shashank Samala, CEO of U.S.-based DAC company Heirloom, noted that “policy and incentives such as 45Q are going to be critical as we aim to scale these solutions.” It is important to note that there are a handful of bipartisan proposals pending in Congress that both increase the value of the credit per metric ton captured and extend eligibility to projects that begin construction by the early 2030s.
Tom Michels and William Swetra also noted that if we hope to deploy and scale CDR technologies, early engagement with impacted communities will be key to understand their needs and educate on the benefits of CDR deployment, including local economic opportunities and potential synergies that support existing local industries. Further, the pair recognized the DAC Hubs provision included in the bipartisan IIJA as an exciting opportunity to catalyze early deployment of DAC solutions to reach gigaton scale quickly and meet global carbon reduction goals.
In order to meet carbon dioxide emissions reduction goals, we need affordable solutions focused on technological innovation and market-based incentives for supply to meet surging demand. Concurrently, regulatory certainty that fosters the building out of storage and CO2 storage infrastructure is needed to enable the scale up of these solutions. A diverse set of high-quality CDR solutions is essential to removing carbon dioxide already in our atmosphere and affordably reducing emissions across the global economy.