Cautiously optimistic removers

Unpacking my thoughts after the Carbon Unbound conference

The world's first dedicated carbon removal business conference, Carbon Unbound, was a sold-out success. Most participants were CO₂-removing companies together with key ecosystem actors. The vibe was enthusiastic but sober. My impression is challenges was the most common topic. The sector has a healthy humbleness for how difficult it will be to scale CDR to get it to reach its purpose. 

Here are eight thoughts and observations from me:

1) Lack of demand is the biggest worry.
The private sector is needed to grow the carbon removal ecosystem. My sense was that out of everything discussed at the conference, the lack of buyers is what worries people the most. That's what I brought up in my presentation as well. In the Milkywire Climate Transformation Fund call for proposals, around 70 percent of the 117 carbon removal companies applying had never sold a tonne. And in 2022, only 16 buyers bought more than 1000 tonnes of durable removals. We need to normalize that all companies should finance climate solutions and that CDR must be supported now for it to be available at scale by 2040.

2) Don't rush to certify.
If a tonne of carbon removal is “certified”, it gives the impression that there is very little uncertainty about how much carbon has been removed and stored.
But scientific certainty is yet to be achieved for some CDR solutions like enhanced rock weathering and ocean CDR. For methods lacking published scientific evidence, an alternative to saying something is certified when following available standards could be "following best practice". This is not to say that certification can't allow for an uncertainty range - that's perfectly fine. The issue lies in the possibility that some methods might turn out to be significantly less efficient than we currently think. This also reminds us of to the need for a trusted third-party actor to judge the quality of different standards.

3) Money is not enough.
A lesson from implementing the Inflation Reduction Act is that money is just a prerequisite, not a panacea, for getting climate projects built. I think that even with infinite money CDR would struggle to reach a gigatonne this decade. There are significant bottlenecks regarding getting access to energy, securing the necessary permits, getting components from suppliers, engaging with local communities and developing storage. This is why it is so important to start scaling CDR now. It will take decades to grow to the necessary level. 

4) What is the relationship between demand and price?
The conference made it clear we don’t know how much price affects demand. If the relationship is weak, then companies will meet their net zero targets regardless of the cost, buying CDR when necessary as long as it’s cheaper than the hardest to abate emissions. If the relationship is strong, a lot of suppressed demand could be unlocked before corporate net zero targets dates if CDR becomes cheap enough. I would like to see more research digging into this. 

5) Don’t look at today’s prices too much.
The price at which carbon removal credits are sold doesn't necessarily reflect the cost of the method used. There have been instances where companies sell the same tonne at vastly different prices to different buyers. Some choose to bake in all their costs in the price, others sell at a large loss per tonne. And remember, costs today are not at all indicative of future costs. It is a big difference between what it costs to build something for the very first time and when mass produced.  

6) There is uncertainty about how to best design state support
Several discussions during the breaks focused on the uncertainty around how state support for CDR should be designed to ensure additionality. A recent example is The Energy Agency in Sweden's suggestion that tonnes that the state finances could be sold on the private market too, but will also be counted towards Sweden's targets. The devil will be in the details here. It makes a big difference whether the state promises to pay for the full cost or only a partial payment, and what happens if the private sector purchases credits. Small changes in policy design could ensure or totally eliminate the additionality of state-supported removal credits. I will return to this topic in a separate post.

7) Storage is a challenge in the short term. 
A looming concern is the storage issue for CO₂ captured the next few years. Several new entrants in the field are uncertain about where they will store the CO₂ produced by their initial facilities. Underground storage in a Class-VI well works well for large volumes, but it will likely be hard to access to them for small players. Alternative options, such as concrete and mine tailings, exist, but these don't come cheap with the current business models. In the longer term, storage is not a blocker. If we can capture it we can store it. We should also keep in mind that the biggest reason for supporting nascent CDR is to develop the technologies, not the few tonnes that are removed in first-of-a-kind facilities.  

8) Carbon removal will happen near people, who will have opinions. 
Ocean CDR company Planetary shared their experience in a presentation. They were going to test alkalinity enhancement by adding small amounts of magnesium hydroxide to a local wastewater stream. They tried to do proper community engagement and reached out to local people ahead of the tests, but few were interested in engaging. Then a local newspaper wrote a clickbait article, and they got massive resistance from people afraid of potentially harmful effects of the tests. Interestingly, this particular project has essentially zero scientific uncertainty regarding safety. The reasons for public opposition can come from many sources; NIMBYism, climate change denial, opposition against CDR from degrowthers, untrust of private companies and more. Much can be won by carefully designed community engagement that wins people’s trust. 

Finally, I really felt that people at this conference and in this industry are here for the right reasons. People want to develop this crucial part of solving climate change. No one is here to make a quick buck. We have a very strong community of driven, smart and warm-hearted people spread across the world. Together we will tackle the challenges and develop a sector that ensures we can stop warming.

My presentation at the conference. Photo Erik Matzner

Many of these insights come from talking or listening to the brilliant speakers and participants at the conference, such as Maurice Bryson, Anu Khan, Joanna Klitzke, Lennart Joos, Na’im Merchant, Philip Moss, Adrian Corless, Paul Needham, Cindy McLaughlin, David Elenowitz, Anna Stukas, Brock Battochio, Gabrielle Walker, Toby Bryce, Savita Bowman, Sebastian Manhart, Tito Jankowski, Nicholas Chadwick, Josh Santos, Jason Hochman, Angela Hepworth, Maddie Hall, Jason Grillo, Adam Wolf, Stacy Kauk, and many more. And a big thanks to Oliver Katz and Unbound Summits for arranging the conference, I am looking forward to the next one.