Resorting to CO₂ removals – ie when carbon is directly removed from the atmosphere and stored through temporary natural or more permanent technological approaches – as the solution to lower the concentration of greenhouse gases (GHG) in the atmosphere and solve global warming has been the subject of increasing interest over recent years.

As the Intergovernmental Panel on Climate Change (IPCC) has confirmed, removing carbon from the atmosphere should be considered as ‘unavoidable’ for the purpose of balancing out inevitable emissions to reach climate neutrality in the middle of this century. However, many countries and companies are pursuing removals options reach their climate targets, and momentum is building to develop business cases and to stimulate a scaling up of the market.

The role of CO₂ removals in our climate action hierarchy is still poorly understood. Temporary removals, such as when carbon is sequestered and stored by natural ecosystems, do not and cannot balance out emissions. Meanwhile, technical solutions, such as direct air capture and storage, that remove CO₂ more permanently, and thus have a higher potential to effectively supplement climate mitigation, remain in prolonged infancy, are unproven at scale and could involve more lifecycle emissions than they remove.

Contrary to the growing interest and enthusiasm, the truth is that sustainable and effective carbon removals remain a finite resource that should be used to help clean up the atmosphere and balance out those emissions that are extremely hard or impossible to eliminate.

Unfortunately, current regulatory proposals to address carbon removals, such as the European Union’s system to certify carbon removal units or UK government plans to include removals in its Emissions Trading Scheme (ETS), still consider the use of removals as a replacement for emissions reductions and include options that are not true removals. Not only do these positions fail to create the right incentives to purchase high-quality removals, they also undermine our ability to meet climate goals.

Drastic emissions cuts
As recently stated by UN Secretary General António Guterres, carbon removal technologies ‘cannot be a substitute for drastic emissions reductions or an excuse to delay fossil fuel phase out’.    

Removals are an inherently weaker form of climate mitigation compared to emission reduction for many reasons. The potential risks of reversals, technological constraints, demands and requirements of scarce energy, water and land supplies, as well as risks for biodiversity and local communities, make leaving fossil fuels underground a much better option. Geophysical constraints related to the limited physical capacity of our planet to store carbon must also be taken into account.

In addition, once released into the atmosphere, GHG emissions have a permanent and often irreversible impact on the Earth’s climate, ecosystems and human health. It is clear that stringent emissions reductions are needed now to maintain planetary stability.

Masking climate inaction
A fundamental problem about integrating carbon removals in policies dedicated to reducing emissions, such as an ETS, is that it enables polluting entities to slow down their mitigation efforts by using removals to offset their emissions, masking their climate inaction.

Market logic dictates that removals entering a carbon market will be utilised as long as these are cheaper than emission reductions. But climate policy should be driven by producing lasting climate benefits, rather than reducing abatement costs.

Buyers motivated by minimising the cost of climate action are most likely to purchase cheaper, probably unsustainable or non-permanent removal options. Furthermore, if ETS prices are too low to generate demand for more expensive removals guaranteeing higher permanence, there will be pressure to also integrate cheaper options such as (highly vulnerable) land-based sequestration while the pricier, potentially more reliable removals that are needed will not be deployed.

This could then lead to an overreliance on removals and obstruct economy-wide climate neutrality efforts, leading to a misallocation of sustainable and permanent removals to ETS sectors rather than putting the finishing touches on decarbonising our societies.

All in all, integrating carbon removals into the ETS will not apply necessary and appropriate pressure on reducing emissions nor to scale up sustainable removals over time. The ETS should aim to make polluting expensive so that companies are left with no choice but to slash their emissions to zero. The price for residual emissions should be high enough to incentivise decarbonisation and reflect the costs to society and the economy of carbon pollution.

Market logic dictates that removals entering a carbon market will be utilised as long as these are cheaper than emission reductions. But climate policy should be driven by producing lasting climate benefits, rather than reducing abatement costs.

Acting on all fronts
Separating targets and policies for reducing emissions, protecting natural sinks and developing sustainable permanent removals is beneficial for several reasons. Both land-based carbon sequestration through natural sinks and permanent removals have a role to play in the context of the climate crisis, but should be addressed differently. The former are vital for nature and biodiversity, while the latter can be used to reduce the concentration of CO₂ in the atmosphere or balance out the very last residual emissions.

The capture and storage of carbon by natural ecosystems should be incentivised through policies fostering nature protection and restoration, and biodiversity enhancement. These include a potential Nature Restoration Fund or making better use of the Common Agricultural Policy in the EU. We must avoid applying a ‘carbon tunnel vision’ to nature, by transforming it into credits to be used to offset emissions. Land-based sequestration activities are difficult to quantify and measure, and require constant monitoring and management for generations to come.

Policy solutions that will develop sustainable and permanent removal methods include applying the polluter pays principle by using ETS revenues to finance removal projects or creating a separate removal trading scheme. Separate removal targets could also be reached through public procurement. The private sector can contribute by procuring removals without offsetting their emissions.

The EU can show leadership by proposing separate targets for 2040 in its upcoming revision of the Climate Law.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further information: ‘CCUS – a $196bn investment opportunity’. Global carbon capture, utilisation and storage (CCUS) will require $196bn in investments by 2034, with North America and Europe leading the charge, according to a new report from Wood Mackenzie. Government funding will play a crucial role, contributing $80bn across five key countries, predominantly the US, UK and Canada.
• Find out more on Norway’s Northern Lights carbon capture, use and storage (CCUS) project, which despite cost overruns, is heading towards start-up in 2025, with a first-phase capacity of 1.5mn t/y, rising to 5mn t/y in the second phase. That schedule puts the scheme in the running to be among Europe’s first large-scale CCUS projects to start up.