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First movers: the commercial case for investing in early-stage carbon dioxide removal

  • Victoria Harvey
    Carbon Ratings Scientist
  • Ted Christie-Miller
    Director of Carbon Removal
  • Carbon Removal
The climate case for carbon dioxide removal (CDR) is clear. By 2050, a cumulative total of 165 billion tonnes of removal is going to be needed, amounting to as much as 10 billion tonnes per year, to limit climate change to 1.5°C (Energy Transitions Commission, 2022). According to the Intergovernmental Panel on Climate Change (IPCC), billion tonne scale CDR is now “unavoidable” if we are to hit climate targets.

BeZero Carbon has published a report that focuses on the commercial case for investing in early-stage CDR and the need for public and private sector support to help the industry scale.

Here are the six key reasons for investing

  • Future financial savings.

It will help support projects to commercial demonstration, bring down future costs and help the industry scale. The report uses a case study of Airbus, who bought 400,000 future direct air capture credits from the supplier 1PointFive, which uses Carbon Engineering’s technology.

  • New business opportunities.

The undersupply of carbon removal capacity means there are business opportunities to fulfil the pent up demand. The report uses a case study of LowerCarbon Capital raising $350 million in 2022 to invest solely in CDR companies.

  • To comply with regulatory requirements.

Both the UK and EU are actively exploring bringing carbon removal credits into their emissions trading schemes. This move is making companies think ahead to when they will want the supply of those credits to comply with their emissions trading scheme obligations.

  • To comply with voluntary standards.

Voluntary standards such as the Science Based Targets initiative and the Net Zero Banking Alliance are being used for industries not covered by regulated regimes. These standards are increasingly requiring high integrity carbon removal for their participants.

  • To be seen as a climate leader.

As a 2021 poll from BeZero Carbon and Stack Data Strategy found,  87% of people support businesses investing in carbon removal. 44% agree even if it impacts businesses revenue. Businesses are grasping the PR opportunities that come with investing in early-stage carbon removal.

  • To improve commercial knowledge and networks.

Early investors and participants in this market will gain insights and understanding that will be useful for growth of the sector and related activities.

Contents

  • Executive Summary

  • The challenge

  • Commercial Opportunities

  • Engagement approaches

  • Conclusion

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