How should we use carbon removals?

The world must remove 7 to 9 billion tons of CO2 annually by 2050 to reach net zero emissions and keep global temperatures within the bounds of the Paris Agreement (source: State of CDR). No matter how generous the pledges, the voluntary carbon market alone will never deliver that.

For the European Union, which has committed to reaching climate neutrality by 2050 at the latest and becoming net-negative thereafter, CDR is a vital asset to meeting its climate goals. EU policymakers have for now focused on building a public framework to certify carbon removal credits, the Carbon Removals and Carbon Farming Certification Regulation (CRCF). While this represents an essential step towards harmonising and improving the quality of CDR supply, it falls short of tackling a key question for CDR scale-up: who should be using CDR, and to what end?

Today, demand for CDR is driven almost exclusively by the voluntary carbon market, which represents around USD 2 billion annually (source: BCG). Purchases of permanent CDR represent only a small fraction?of this amount (4% according to the State of CDR report), despite being those in the direst need of financing to significantly scale up. Furthermore, given the current lack of clear guidance on using carbon credits and the related claims, CDR is not yet properly integrated into companies’ net-zero strategies.

In our recent policy brief, Using carbon removal to deliver climate impact, we argue that a wider set of use cases for CDR must be considered and a dedicated policy framework, underpinned by a trustworthy certification framework, must emerge. This is essential for these uses to grow in harmony, diversify and increase revenue streams.

This work has led us to the following key conclusions:

• We must go beyond the voluntary carbon market (VCM). Companies that make voluntary investments in CDR, either through compensation or contribution claims, are today the prime funders of the CDR industry. However, while the VCM can drive demand in the near term by?building on clearer corporate guidance, they won’t suffice for the CDR industry to grow at the scale needed for real climate impact.
• Governments need to get involved in CDR. The role of CDR needs to be clearly defined in national climate strategies to reach net zero, accompanied by dedicated policies. This should start with increasing public investment in research and innovation and?developing ad-hoc procurement programmes to use public investment as a catalyst. At the EU level, policymakers should consider setting up compliance markets for CDR to ensure companies contribute to removing the?CO2 they often emit in the first place.
• Nature must be better considered and protected. As most carbon credits currently sold on VCMs come from nature-based solutions, there is concern that this could create a “carbon tunnel vision”, leading to more harm than good done to ecosystems and local populations. Instead, governments should lead a paradigm change on nature restoration, by promoting practices[MG3]? which protect ecosystems in their own right – and, where possible, measure CDR as a co-benefit.
• Certification should be designed and adapted to underpin all use cases. Certification is essential to guarantee the climate benefit of CDR units, and correctly account for the CO2 effectively sequestered. While certification requirements should be as stringent as possible for certain CDR uses, namely compensating for emissions, they should remain open to all use cases for CDR. Some flexibility in methodologies to allow, for instance, certification at a lower cost when the use isn’t compensation, or a better consideration of all biodiversity co-benefits, would be beneficial to the?wider use of CDR.

In conclusion, next to ensuring that the CDR we generate is of high quality, it turns out that clarifying how carbon removal units can and should be used is equally important to deliver their climate benefits.

To learn more about our analysis and recommendations, read our publication here: Using carbon removal to deliver climate impact

By Thibault Aubert , Associate Policy Analyst at Carbon Gap.