Carbon Dioxide Removal

The methods and stakeholders scaling carbon dioxide removal

As well as reducing emissions, countries have to remove CO₂ from the atmosphere and store it to achieve net-zero. Recognizing the importance of carbon dioxide removal, Congress introduced the Carbon Dioxide Removal Investment Act in late 2024. The Act would support a range of carbon dioxide removal methods through tax credits and drive investment and innovation to the space.

What is carbon dioxide removal?

Carbon dioxide removal (CDR) is the removal of carbon from the atmosphere. CDR addresses residual and historic emissions. For some industries, eliminating their GHG emissions is currently impossible or very difficult. With CDR, these hard-to-abate sectors can remove residual emissions and achieve net-zero goals. CDR also removes historic emissions. For decades, industries have emitted CO₂, which has accumulated in the atmosphere, and since CO₂ stays in the atmosphere for hundreds of years, CDR is crucial.

Types of CDR

There are three broad types of CDR methods, nature-based CDR methods, engineered CDR methods, and hybrid methods, as well as several methods for storing the removed carbon or carbon dioxide.

Carbon capture is commonly used interchangeably with CDR, but they are separate concepts. Carbon capture and storage (CCS) captures CO₂ from power plants and industry before it is released into the atmosphere. CCS prevents CO₂ from entering the atmosphere, but it does not reduce the concentration of CO₂ in the atmosphere.

Metrics to Measure Quality

To measure the quality of CDR methods and projects, three key metrics are durability, additionality, and justice.

Durability is a measure of the length of time CO₂ is stored. For example, mineralization in rock can store CO₂ for thousands of years, whereas storing CO₂ in soil may be less permanent due to potential land-use changes and poor management.

Additionality is a measure of whether the carbon removal would have happened without the specific intervention. For example, a reforestation project funded by carbon credits is additional if the project would not have happened otherwise. However, protecting a forest from deforestation by paying a land owner to not convert the forest into agricultural land is not additional if the forest was not at risk of deforestation.

Pachama

Justice is a measure of how the carbon removal project affects the local community and stakeholders. For example, a direct air capture facility that provides jobs and revenue-sharing for local communities aligns with justice metrics, whereas an afforestation project that displaces local farmers and restricts land use does not.

1. Nature-based CDR Methods

Nature-based carbon removal is relatively inexpensive and globally scalable. These methods often are not permanent due to vulnerability to disasters and wildfires. Measuring their additionality can be difficult because it is hard to know if carbon removal would have happened without financial incentives.

Ocean Alkalinity Enhancement

Ocean alkalinity enhancement involves increasing ocean alkalinity to enhance its ability to absorb CO₂.

Coastal Blue Carbon

Coastal blue carbon involves protecting and restoring ecosystems that store large amounts of carbon, particularly in their soil, such as mangroves, tidal marshes, and seagrass meadows.

Soil Carbon Sequestration

Soil carbon sequestration involves land management and agricultural practices that increase soil carbon storage and improve soil fertility, water retention, and crop productivity.

Improved Forest Management

Improved forest management involves adjusting harvest schedules, thinning methods, and conservation practices to increase carbon storage in forests.

Afforestation and Reforestation

Afforestation involves planting forests in areas there were none in before. Reforestation involves restoring forests in areas where they were lost due to deforestation or land degradation.

Pachama

2. Engineered CDR Methods

Direct Air Capture

Direct Air Capture (DAC) removes CO₂ from the atmosphere and concentrates it for permanent geological storage deep underground or for use in products such as synthetic fuels, carbonated beverages, and building materials. CDR with DAC is durable, additional, quantifiable, and scalable. However, DAC is currently very expensive, at around $600-$1,000 per ton of CO₂. It is also energy-intensive, and DAC plants have to use renewable energy sources to prevent reemitting the CO₂ they are removing. There are also legal issues around storage and few policy incentives. There are only two companies doing DAC commercially.

Climeworks

3. Hybrid CDR Methods

CO₂ Mineralization

CO₂ mineralization involves certain minerals reacting with CO₂ to form stable carbonate rock and permanently remove CO₂ from the atmosphere.

Enhanced Rock Weathering

Enhanced rock weathering involves crushing silicate rock into fine particles and spreading them over agricultural lands to capture CO₂. This method also benefits soil, waterways, and oceans.

Biomass Carbon Removal and Storage

Biomass Carbon Removal and Storage (BiCRS) uses plants, algae, and other biomass to capture CO₂ from the atmosphere through photosynthesis. Biomass decays and emits carbon as it does, and burying biomass is a permanent, relatively inexpensive, and scalable method for storing carbon.

To convert biomass, it is harvested and processed into durable materials through methods like pyrolysis. Fast pyrolysis converts biomass into bio-oil, which is then injected underground for permanent storage. Slow pyrolysis produces biochar, a stable form of carbon that can be added to soil for storage. Other materials from the biomass are stored in ecosystems, geological formations underground, and durable products, such as bioplastics.

BiCRS may disrupt agriculture and ecosystems, requires energy for converting biomass, and carries the risk of releasing carbon back into the atmosphere through decomposition if not properly stored.

Biomass Energy with Carbon Capture and Storage

Biomass Energy with Carbon Capture and Storage (BECCS) burns or processes plant biomass, which absorbs CO₂ through photosynthesis, to generate electricity and heat and produce liquid fuel and hydrogen. BECCS is scalable with existing infrastructure, such as power plants and industry. BECCS is expensive and may disrupt agriculture and ecosystems.

Key CDR Stakeholders

Suppliers, buyers, marketplaces, and governments are driving the scale and growth of CDR.

Suppliers

There are many startups advancing CDR technologies, especially the following seven.

Pachama

Pachama uses remote sensing and satellite mapping to develop forest carbon projects and ensure the credibility and transparency of carbon credits and the carbon market.

Yard Stick

Yard Stick deploys handheld probes and spectroscopy for carbon measurement and reporting verification. The method is cost-effective and allows for a high number of samples, which reduces the signal-to-noise challenge in soil analysis.

Graphyte

Graphyte dries biomass to remove microbes and water and creates inert carbon blocks with barriers that prevent biomass decomposition. Graphyte stores the blocks underground and monitors them.

Climeworks

Climeworks does high-quality carbon removal, combining DAC with carbon removal solutions. It runs the world’s first two DAC plants in Iceland and provides tailored portfolios of nature-based and engineered methods to clients.

Carbon Engineering

Carbon Engineering does high-quality commercial DAC that removes CO₂ from the atmosphere and converts it into products such as synthetic fuels.

Heirloom

Heirloom combines DAC and carbon mineralization. It grinds limestone and exposes it to air, which absorbs CO₂ until it is saturated. The limestone is heated in an electric kiln to release the captured CO₂, which is then injected underground for permanent storage.

Heirloom

44.01

44.01 works with DAC companies to take their captured CO₂, combine it with water, and inject it into peridotite rock deep underground.

Buyers

There are two models for buyers, contribution and net-zero commitments. Contribution models involve setting investment commitments to reducing emissions, while net-zero goals involve setting emission reduction commitments. In line with contribution and net-zero commitments, the private sector has committed over $1B to CDR by 2030. Although CDR is crucial for net-zero, companies should prioritize emissions reductions over purchasing CDR credits.

Moral Hazard

One consideration for CDR deployment is the risk of moral hazard, where companies, such as oil and gas companies, may buy carbon credits based on carbon removal projects so as to continue to emit CO₂ at current levels. Some DAC companies have made commitments to not accept money or sell carbon credits to oil and gas companies. However, oil and gas companies have the financial resources to invest in carbon removal and the existing infrastructure for CO₂ storage. This can help accelerate and scale CDR technologies, and the subsequent removals can mitigate their historic emissions as well.

Marketplaces

To ensure CDR projects are effective and credible, carbon markets must be transparent and high-quality. Monitoring, reporting, and verification standards, blockchain systems, standardizing credits, and third-party verification can ensure integrity. Regulated global standards and open-access registries can prevent low-quality credits, and linking voluntary markets and compliance markets, such as EU ETS and California Cap and Trade, can increase liquidity and credibility.

Governments

In the US, the only federal policy that supports CDR is the 45Q tax credit, enacted in 2008 and expanded in 2018 and under the IRA in 2022. For CO₂ removed with DAC, 45Q provides up to $180/tCO₂ for geologic storage and up to $130/tCO₂ for utilization. The tons of CO₂ are calculated as the tons of CO₂ removed minus the tons of CO₂ required for the removal operations.

The EU has a 2050 net-zero goal that includes scaling CDR. Published in 2024, the EU-wide Carbon Removals and Carbon Farming Regulation created a system for quantifying, monitoring, and verifying carbon removals, carbon farming, and carbon storage.

What’s next?

In order to reach its net-zero by 2050 goal, the US has to remove around 1 GtCO₂, or 1B tons of CO₂, per year. That is the equivalent of 16% of the US’s 2021 GHG emissions. Globally, we need to remove 5-10 GtCO₂ per year by 2050 and 10-20 GtCO₂ per year by 2100. By some estimates, the CDR industry will be valued at $1.2T by 2050.

The deployment of CDR projects requires credibility and a massive reduction in cost, to below $150/tCO₂. Several factors, including economies of scale, automation, cheaper renewable energy, efficient infrastructure, policy incentives, carbon markets, and industry integration, will drive this reduction. Investing in these areas is key to scaling CDR to the gigaton levels we need.