A few weeks ago, the US government announced it would directly purchase carbon removal. The Department of Energy released news of a $35 million fund to procure CDR credits. The prize fund will take the form of offtake agreements and cover four pathways.
More and more governments are funding CDR pilots, supporting research, and adding CDR targets to their climate plans. CDR has quickly entered an era of widespread support throughout North America and Europe.
But while the support is wide, it is also shallow; most policies take the form of modest grants or targets, with a few more ambitious countries leading the way.
Many CDR commentators have come to the conclusion that without a compliance market, carbon removal won’t ever scale up.
On this episode we asked our policy panel about recent government actions on CDR: will they work, are they enough, and what more needs to be done? Are today’s policies sufficient to get us where we need to go?
Radhika is joined by Wil Burns, Co-Executive Director of the Institute for Carbon Removal Law and Policy at American University, and Holly Jean Buck, Assistant Professor of Environment and Sustainability at the University at Buffalo.
On This Episode
Radhika Moolgavkar
Resources
National Academy Report on CDR Research
DOE RFP for Responsible Carbon Management
Congress Members Letter on CO2 Pipelines
Heirloom commitment to DOE principles
Boston Consulting Group Report
Subscribe to Climate Workers Anonymous
My other show, Reversing Climate Change
Books referenced in the podcasts, at Bookshop
Full Transcript
Announcer: You’re listening to Carbon Removal Newsroom, a weekly show about current events in the world of carbon removal, from technology and innovation to policymaking and job growth. Brought to you by Nori, the carbon removal marketplace.
Radhika Moolgavkar: Welcome to the October 17th policy edition of Carbon Removal Newsroom. Today, I have my usual panel. Wil Burns, Co-Executive Director of the Institute for Carbon Removal Law and Policy at American University. Hello, Will.
Wil Burns: Hi, Renika.
Radhika Moolgavkar: And Holly Jean Buck, Assistant Professor of Environment and Sustainability at the University of Buffalo. Hi, Holly.
Holly Jean Buck: Hi, everyone.
Radhika Moolgavkar: And I’m Radhika Moolgavkar, Head of Supply and Methodology at NORI. So we’re just going to dive right in because a few weeks ago, the U. N. government announced it would directly purchase carbon removal. The Department of Energy released news of a $35 million fund to procure CDR credits. The prize fund will take the form of offtake agreements and cover four pathways. We know this might be a trend that we’re seeing that more and more governments are funding CDR pilots, supporting research and adding CDR targets to their climate plans. And it seems to be gaining support throughout North America and Europe.
But it could be true that while support is wide, it also is a little shallow in that most policies take the form of modest grants or targets with a few more ambitious countries leading the way. So many CDR commentators have come to the conclusion that without a compliance market, carbon removal won’t ever scale up. So I am curious about my panel’s position on this and what they think of these recent developments. I will jump in with the USDOE announcement and with Holly. So Holly, what can you tell us about this $35 million procurement prize, the overview of how it works, and what is the goal?
Holly Jean Buck: Yeah, basically, if your carbon removal idea is a winning idea, then the government will buy some carbon removal from you. And so this prize will provide up to $35 million in cash awards in the form of offtake agreements from the US federal government in four different pathways. That’s direct air capture with storage, biomass with carbon removal and storage, enhanced weathering and mineralization. And planned or managed carbon sinks. So, so the aim is really to help build standards for successful CDR programs and create a market to encourage innovation and basically grow the industry.
Radhika Moolgavkar: So as I kind of mentioned or alluded to at the top, well, $35 million isn’t a massive amount in the scheme of things. So, you know, what types of projects or technologies could this help advance? And, you know, in your opinion, what’s the importance of this announcement maybe outside of the amount that it’s funding? Yeah.
Wil Burns: Yeah, I mean, I’m a big proponent of government procurement. I think we’ve seen empirically in the past that it really kickstarted the viability of the semiconductor market with the U. S. driving that. It kickstarted solar PV penetration primarily because of Germans’ commitments, including procurement. So I think that can really help, right? It can help you attain economies of scale. It can help you in terms of knowledge diffusion. In the voluntary carbon markets, only about 7% of what is a very modest market is for removals as opposed to avoided emissions. So we clearly need another demand node.
But as you suggested, this one is extremely modest, right? So I’m not certain that it really can accomplish any of those kind of goals that we’re talking about in terms of economies of scale or much knowledge diffusion. As you suggest, however, it may provide a signal that encourages more of this. There’s a number of states, for example, New York, Colorado, Illinois, California, that have talked about government procurement also. And so if this helps galvanize those states to also develop their own programs, maybe as we cobble them all together, it ultimately gets us somewhere.
Or If we see some initial success in terms of the federal government, perhaps it’ll galvanize them to increase these commitments in the future.
Radhika Moolgavkar: How sophisticated is the CDR work happening within the DOE? You know, how would you rate their efforts to scale up CDR kind of based just on your experience and your general knowledge of the government?
Holly Jean Buck: Well, you know, I think that they’re Doing a good job with what they can do with the money that Congress appropriates. And so, you know, when you look at these federal agencies, if they’re working with specific things like that were specified in the bipartisan infrastructure law, for example, they’re just executing what Congress told them to do. So I think that if you think about the levels of funding that the National Academies recommended that would be necessary for really developing the scientific basis, For scaling carbon removal, you have the 2018 National Academies report that covered terrestrial CDR with blue carbon that recommended about $7.
2 billion on the low end and much more on the higher end. Then you have the ocean carbon removal report a few years later that was $1. 14 billion for kind of priority areas plus another $125 million for overarching challenges. And so out of that, what did we get? So we have this kind of uneven funding. And I actually think if you really wanted to do this, it would be much more because of the money you would need for the social side of things. I’m sorry, I’m just going to have to say that.
So the National Academies Recommended $50 million for the social and environmental impacts of carbon removal. That wasn’t funded. It recommended $1 million for 10 years for social engagement around geologic storage. I think it’s very clear that you would need a lot more engagement than $10 million over 10 years if you wanted to talk with the public about storage. We’re seeing a lot of opposition. You know, given what Congress appropriated, they’ve done a good job, but what they had available was uneven and inadequate. So we really need the policy community and people who are talking with congressional staffers to write in this other stuff into budgets if we want more progress, basically.
Radhika Moolgavkar: Yeah. And for those listeners who might not have seen this, two Democratic representatives have sent an open letter to President Biden, I believe, asking to halt all CO2 pipelines across the country. I don’t know if there was like a backstop to that. So there is a lot of opposition, like Holly mentioned, and it kind of doesn’t get addressed, I think, in a lot of these conversations we’re having within the CDR space. So Will, moving on to other critics of public spending on CDR, they point out that the same amount could negate more emissions if invested in more established technologies.
What would you say to that? I don’t know if the IPCC report carries weight with them or not, but what do you think?
Wil Burns: Yeah, I mean, that’s people that I, you know, respect a lot, like Mark Jacobson at Stanford, right, who makes this argument. But I think there’s a couple of problems with that argument in this context. Is as you alluded to the fact, the IPCC says it isn’t either or at this point, right? We’re going to need both. And so then the question is, what’s the nature of the opportunity cost? And I think that if you look at solar and wind and their trajectories at this point, A lot of that can now be carried by the private sector because the levelized cost of these approaches are often as competitive or more competitive than fossil fuel alternatives, right?
And so I’m willing to believe that the private sector can drive most of the market penetration with these approaches at this point. Carbon removal is fundamentally different. As we were alluding above, it’s still very expensive. It’s not being driven by voluntary carbon markets isn’t likely to be. And so I think that it’s important if it’s going to matter in the timeframe where carbon removal is going to be critical starting from mid-century that we start to scale up and bring down costs. And so I think intuitively a good case could be made for government procurement on a fairly large scale concentrated in this area and make the argument that may be the optimal approach in terms of the amount that we’re looking at.
Radhika Moolgavkar: So Holly, some of the other criticisms, obviously, that you kind of alluded to are that social and environmental impacts of CDR. The DOE has announced that they’re working on guidelines to ensure that carbon management projects meet social and environmental responsibility, though I think that definition is also hard to pin down. So they are requesting input. And if you were responding, or maybe you are responding, what would you recommend?
Holly Jean Buck: Yeah, so I just want first want to say that this is an important effort because it sets forth a consensus about what the best practices are that people can point to. And you see these things come up, you know, within industry or the private sector, but I think it’s great that the government is doing it. And it should have been done a few years ago, but good to do it now. So this initiative has two phases to it. The first phase is they’re going to publish principles for responsible carbon management projects that includes carbon removal in their view.
And they have different categories, community engagement, workforce development, environmental justice, tribal consultation, and so on, including emergency response and transparency, long-term stewardship, things like that. And so companies can pledge to abide by those principles. I think Heirloom was one of the first companies to do this already. And in the second phase, they’re going to provide technical assistance through a funding opportunity to support project developers who are trying to meet those principles. Including increasing transparency or third-party verification. And so I think that’s great because sometimes companies, especially if they’re smaller, they may not know how to do community engagement or environmental justice work.
They might not have somebody on staff that really has the expertise. So great that the government wants to support that. And then they talk more about, you know, what they might do in the future. You know, for me to say what I would recommend, that’s more than we have time for, but I think that they have a lot of the right categories that they’re looking at, and I would encourage them to adopt principles around transparency and engagement that include community-based monitoring, informational dashboards, make it so people can really see what’s going on in these facilities and what the air quality and water use and these kinds of things are, and Also, this is a paradigm that we need for industry broadly if we want acceptance of all of the new clean energy industries.
And, you know, carbon removal has a chance to be a model and lead the way here.
Radhika Moolgavkar: All right. Final question under this topic is for you, Will. I mean, obviously, the principles that Holly talked about and just generally funding within the government is important. At the little bit at the mercy of the presidential administration, we are gearing up for a presidential, I laugh when I say it, but presidential contest. And so, you know, given sort of the limitations that the DOE has with the flip-flop in American policy and all of that can happen and administrations and the lack of House leaderships, What can the DOE accomplish with this process and how much time do they really have before everything gets put on hold till the next administration is known?
Wil Burns: Yeah, they don’t have a lot of time. I think one of the things that DOE is doing and the administration is doing to its credit is to try to make a bipartisan case for this approach. And I think there is some acceptance of that. And so You know, a lot of arguments are being made that whether you buy climate change is anthropogenically driven or not, it is occurring, right? And it is harmful. And so you don’t have to concede that it’s related to humans to concede we should address it, right?
And I think that’s the argument that’s being often being made or that A lot of these projects can provide some good jobs and capital infusion into communities that are looking to transition, much as we’ve been arguing with hydrogen hubs in West Virginia, for example. And so I think that may help to create some structural impetus for carbon removal that could carry forward into another administration. We scaffold that probably the better, but you know, there’s no guarantees. Every administration has their own priorities and other than contracts that are already entered into, right, in terms of purchases, everything is up in the air moving forward.
That’s just the nature of democracy and especially one as kinetic as ours is.
Radhika Moolgavkar: That’s a nice way of putting it. Well, I like it. So moving to international news, Will, our Article 6 expert here, what is happening with the UN Article 6 process, which we’ve talked about many times? And, you know, can you just give the audience a primer on what’s going on and if there have been any updates recently? Yeah.
Wil Burns: Yeah, so just a reminder, most of the focus is on Article 6. 4, and this is a provision in the Paris Agreement that provides a structure for a carbon market in which greenhouse gas emissions reductions or removals that might be developed by approved developers could be transferred internationally to countries to meet their nationally determined contributions, right? The Conference of the Parties to the Paris Agreement contemplates that they are going to make some decisions in this context at their upcoming meeting of the parties. And they had appointed the supervisory body to the Article VI instrument to, among other things, look at the role of carbon removal.
And there’s been a number of reports that they’ve made and recommendations. And, you know, as we’ve talked about in the past, one of the Highly critical of so-called industrial carbon removal approaches and said, you know, direct air capture can’t ever be sustainable, nature-based solutions, good. You know, as we’ve talked about in the show, I thought that was simplistic. And it seems that a lot of the input that they’ve been provided since then has kind of changed the positions of the supervisory body and maybe ultimately Paris. Discussion now about the distinctions between industrial and nature-based solutions.
There’s a lot more discussion of kind of characterizing the risks and benefits of individual approaches, which I think makes a lot more sense. And there have been developments since then. There was a meeting that took place in September and the supervisory body released a recommendation document that focused on largely on MRV issues and reversal issues and a bit on environmental impacts, right? And so it developed a whole set of standards for MRV, which are too much to go into detail on, but suffice to say they exist. A requirement or a suggestion that potential CDR sellers conduct risk assessment in terms of potential reversals and update this every five years, establish a reversal risk buffer pool within the supervisory body.
Potentially develop insurance mechanisms to address reversals. And in terms of environmental impacts, it suggested that these impacts be assessed using the sustainable development tool that’s under Article 6. 4. And it emphasized the need for local and global stakeholder consultation and an appeals and grievance procedure under some circumstances. And then The other thing that they did is they issued an information document which shows that the CDR community has really gotten into the game now. There’s a huge amount of recommendations in that document. I think it’s about 80 pages long. But a lot of those recommendations come from the CDR community and focus on issues like MRV and reversals in a way that may help shape the process.
So they’ll meet again now at the end of October for one final meeting before the meeting of the parties to Paris. And then we anticipate at the Paris meeting. That will see the contours of an Article 6. 4 process, including where removals may fit into that process.
Radhika Moolgavkar: Baby steps, baby steps, right? We’re getting there, slowly but surely. So Holly, a recent report from Boston Consulting Group predicts that a few private buyers, of which we’ve talked about many of them on this show and other CRN episodes, will drive growth in CDR until 2030, at which point compliance markets will start generating demand. Do you think that the Boston Consulting Group’s 2030 prediction is a good one? Do you agree?
Holly Jean Buck: So I have a short answer, which is maybe. I mean, not at like a U. S. federal level or, you know, but maybe other countries, maybe at state levels. What will California or New York or Switzerland do in terms of their compliance markets? How many actors you need to drive growth for CDR? I don’t know the answer.
Radhika Moolgavkar: Maybe Will knows. Will, do you want to take a bet? 2030? Thumbs up, thumbs down?
Wil Burns: Yeah, I’m, you know, a natural skeptic.
Radhika Moolgavkar: Well, we need your skepticism to keep us on track. So let’s then turn to the London Convention, which is an international treaty that governs ocean pollution. I quite like the title, London Convention. This body... Has released some new reports on marine CDR. And so, Will, I know this is an area of expertise of yours. Kind of what did they say and what are the implications for how governments may handle carbon removal in the oceans, which has a whole nother layer of complexity due to the ownership, quote unquote, of oceans.
Wil Burns: Yeah, so just a little bit of setting on the table again. So yes, as you suggest, the London Convention regulates dumping of materials into the ocean. And in 2008, in response to ocean iron fertilization activities, they passed the parties to the London Convention passed a resolution that said, you know, good news is this doesn’t constitute dumping because we have an exception that says if you’re putting it in there for a purpose other than mere disposal, It’s not dumping as long as it comports with the rest of the principles of London, which are essentially protecting the marine environment, right?
They said, but the only way you can meet that standard is if it’s scientific research, not for a commercial motivation. He can’t be selling credits and it’s subject to risk assessment that’s signed off on the government with jurisdiction and it has to minimize, you know, potential harms to the marine environment, right? That resolution had limited impact because it’s not legally binding on the parties. Their resolutions are recommendations, right? But then in 2013, the parties to the London Protocol, and this is a That’s supposed to supplant the London Convention once all the parties to the convention join the protocol, passed an amendment to the protocol.
So this would be legally binding on the parties. And not only would it be legally binding, But it establishes the same standards as a resolution. So only scientific research, risk assessment, so forth. But it says that whereas it’s starting only with regulating ocean air and fertilization, it provides the flexibility to regulate other, quote unquote, marine geoengineering approaches in the future, right? And then in 2022, the parties to the convention and the protocol Issued a statement that said they may want to regulate other approaches. And among those they listed were enhanced ocean alkalinity and macroalgae harvesting and upwelling.
And so then fast forward to June, the legal committee for the convention and the protocol It suggested that the amendment should be provisionally applied by countries before it enters into force. It has to be ratified by 55 parties to the protocol before it enters legally into force. Only six have. But what the legal committee is recommending is that countries provisionally apply it despite the fact that it hasn’t entered into force. And so that could have significant impacts. And in 2019, they recommended that. In the context of a 2009 amendment that allowed the export of carbon dioxide for sub-seabed storage, and countries have done that, right?
So we may see these provisions applied inside of the protocol even before they come into place, and that could have some real significance in terms of regulating these approaches. There’s a scientific group under the protocol also. And it suggested that they should divide enhanced ocean alkalinity into three subcategories. One is just adding alkaline materials. One is using electrochemical approaches. And one is what they called controlled alkalization and reactors, discharging either carbon dioxide equilibrated or alkaline solution to the marine environment. And they suggested that the third category, if you’re just Releasing carbon dioxide equilibrated solution in the marine environment might not even be regulated under the convention.
And so that could have implications for those that are thinking about doing this. The legal committee also concluded that macroalgae projects can involve either growing and sinking seaweed or growing it for harvest and use on land. So that’s a wider application than some had concluded, right? You can contrast that with what EPA has been saying, for example, in U. S. waters under The Marine Protection Research and Sanctuaries Act, which implements London, the U. S. , they said they’d only focus on So there’s a lot of things happening the convention. Whereas it was fairly quiescent for a number of years in looking at marine-based CDR, I think given the fact that there’s a lot more activity associated with startups, now the convention is starting to look at both the breadth of approaches that it looks at and how it specifically should regulate some of these approaches.
Radhika Moolgavkar: Yeah, this is going to be a really interesting area to So, Holly. This is a new protocol that was signed by over 40 CDR companies who do open system carbon removal. And so it’s not applicable basically to DAG and bikers, I think. And they pledged to adhere to social environmental responsibility rules. You know, I’m curious what you think about the principles of this protocol and also what you think of the growing number of standards and protocols. And does it help?
Holly Jean Buck: Yeah, so first I’ll start out with my bias, which is that I hate bureaucracy and like my mind shuts off. So all these discussions about principles and standards and protocols, it’s hard for me to stay engaged. That said, I really did think this one is interesting. So here’s why. I mean, it contains the general stuff about having peer reviewed methodologies, environmental and social assessment. Suppliers need to publish complete engagement plans before starting operations. That’s all great. You know, it builds on what people have been talking about. But then it also talks about having these environmental credits on a public ledger.
So I like both the public ledger concept and this move to talk more about environmental credits, I think is interesting because the main conundrum I see for CDR is that The techniques that could get a really big impact in terms of carbon removal are the ones that people are nervous about. And by that, I mean like lay publics, like regular people. And the ones that regular people are excited about are these ones that really don’t have a huge CDR boost. I mean, things around maybe wetland restoration is like such a great thing to do for that ecosystem and has all these other benefits, but Right.
Right. Right. Methane removal, nox abatement, biodiversity, or ecosystem restoration. And they say, you know, represent those as separate credit types. I just think it’s an interesting move and worth further discussion.
Radhika Moolgavkar: Will, what do you think of all these growing standards and, you know, the stacking of different types of environmental credits? I agree with Holly that it’s interesting, but I also like, We can’t get a voluntary carbon market up and running how it’s hard to imagine other credit markets getting up and running. So how do you think about this?
Wil Burns: Yeah. Well, I’ll say at the outset is as a law person, I love bureaucracy, so I just Have to disagree with Holly on that, but I didn’t think that this approach kicked the can down the road very far. I agree with Holly that there’s some aspects that are salutary, and I thought that the suggestions that you try to avoid conflicts of interest by dividing responsibilities for independent scientific boards, standards developers, regulators, auditors, I think that’s important because I think there are Certification bodies that have some clear conflicts of interest that may or may not be influencing how they’re assessing, but anything that creates a taint of corruption is bad right now, given how perilous these markets are.
So I thought those suggestions were good. But I thought most of the rest of what they were suggesting was just really antidote. I mean, you know, who doesn’t want to plump for best available science, right? But when the rubber meets the road, You have to define what that specifically means, right? And establish some standards, whether it’s going to be specific bodies that you want to develop that best available science or what the specific criteria are. And I didn’t think they did that, right? And everybody supports environmental and social assessment, right?
And community engagement, but they didn’t define what that has to look like. Permission to operate was really limited to getting permits and following the law, which I would hope was not a controversial proposition. But they didn’t talk about social license to operate. Right. And what the what the role of stakeholders are in giving permission. Right. And so it just I just didn’t think it went very far. And so if you’re going to stack another one on the top of all the ones we have, I think you have to distinguish yourself.
And I didn’t think this one did.
Radhika Moolgavkar: So last bunch of questions for you. So it’s going to be a few all rolled into one. What are you guys looking for in the coming years as governments continue to help CDR scale, procure it? You know, what are the things you think will make it successful? And what are the things you believe might be either missing in the conversation or you worry won’t be included as governments get more involved? And Holly, I’ll start with you and then, Will, your turn.
Holly Jean Buck: I’ll just mention two things. I could mention a lot, but I think the first is Some clear guidance on what things are CDR worthy in terms of compensating for, like I’ve talked about many times, nobody wants to hear me talk again about residual emissions, but I do think we need some consensus that makes it so we’re not spending all of our CDR efforts on things that could just be mitigated. The second thing is, I think we need protocols that will clarify that carbon removal isn’t drawing energy from the grid. Where we need that energy for direct electrification, similar to, you know, the conversations around the hydrogen rules that are going on.
Radhika Moolgavkar: Will, your turn. Holly was so brief and articulate.
Wil Burns: I know. That’s a real challenge for me, but I’m going to try, nonetheless. I’m going to try to be brief at least. So I think there’s a couple, one, I think we need uniform certification rules. I think this wild west of you being able to certify your credits with whoever you want to use, some of whom are not providing very stringent sort of standards is ultimately undermining the credibility of carbon removal. And I think you’re going to need Regulatory mandates to rationalize the system, right? Whatever those mandates ultimately end up being.
I think the other thing is we need to drive demand for carbon removal much more quickly than we’re going to get there, right? I know the Boston Consulting Group study that you inverted to before suggests that in 2030, We’ll actually have more demand than supply. I’m skeptical about that. But even if it’s true, I think by the time you get to 2040 and 2050, that will clearly not be the case, right? So as I’ve said before, I hate to sound like a broken record, but I think we need to start thinking about things like carbon take back obligations that help us to drive innovation and drive down costs quickly and drive scale up quickly.
Because if we’re at a place where CDR is only at half a gig in 2050, which I think is very possible given the current trajectory, It’s just not going to be fit for purpose in the ways that’s contemplated under the IPCC or any other relevant studies.
Radhika Moolgavkar: All right. Well, on that kind of positive note, I’m not sure, but thank you both for your time this week. And, you know, have a wonderful rest of the week and month. And to all our listeners, thanks for your attention today.
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