Exploring the Policy Landscape of Carbon Dioxide Removal

The Environmental and Energy Study Institute (EESI) and the World Resources Institute (WRI) held a briefing about effective policy-making for carbon dioxide removal (CDR). CDR—the practice of removing and storing carbon dioxide from the atmosphere and ocean—comes in many forms, including direct air capture, soil carbon sequestration, ocean CDR, and forest restoration. These methods have garnered increasing scientific, governmental, and private sector interest, but expanded policy development is needed to bring them to the scale needed to meet national climate goals.

Leveraging key findings from recent reports, panelists from NGOs, academia, and the private sector explored existing policies supporting different stages of CDR development, the level of CDR we expect to need, the potential for CDR in the United States, policy options to enable scaling to that level, and private sector perspectives on the policy landscape. Panelists also pinpointed key takeaways relevant for federal policymakers.

Highlights

KEY TAKEAWAYS

Carbon dioxide removal (CDR) encompasses technologies and approaches that remove carbon dioxide directly from the atmosphere and sequester it permanently. CDR is an essential complement to commitments to reducing greenhouse gas emissions.
Four types of policy are necessary to support CDR: demand-side policy to create a reliable market, research and development policy to spur innovation, demonstration and deployment policy to transition innovations out of the lab, and infrastructure and other supportive policies to enable integration of the CDR market.
By 2050, the United States could potentially remove at least one gigaton of carbon dioxide annually using demonstrated technologies, which could create over 440,000 long-term jobs nationwide.

Sen. Michael Bennet, U.S. Senator (D-Colo.)

Colorado faces historic droughts and wildfires that place farmers, ranchers, and communities at risk. Climate change is an existential issue that requires reevaluation of past decisions.
Carbon dioxide removal (CDR) will likely be necessary to meet climate goals. American ingenuity, innovation, and legislative reform can make CDR implementation possible.
Engaging the U.S. and global agriculture sector is crucial to addressing climate issues and provides opportunities for bipartisan consensus. CDR has the same potential for across-the-aisle cooperation.
Colorado has favorable conditions for CDR, including appropriate geology; supportive academic institutions, entrepreneurship, and national labs; and early renewable energy adoption and clean energy standards. For these reasons, Colorado has a significant opportunity to experiment with and lead in CDR deployment.
Long-term planning for climate change requires sustained bipartisan support. The United States is uniquely positioned to lead climate action with its energy resources and innovation.
A forward-thinking view of the economy, particularly in energy and climate, is crucial.
To accelerate CDR, permitting processes for businesses and infrastructure must be reformed.

Katie Lebling, Associate II, Carbon Removal, World Resources Institute (WRI)

CDR encompasses technologies and approaches that remove carbon dioxide directly from the atmosphere and sequester it permanently. This method differs from carbon capture and storage, which captures emissions from their source before they enter the atmosphere.
The Intergovernmental Panel on Climate Change reaffirmed the need for CDR to achieve net-zero carbon dioxide emissions by 2050 in its Sixth Assessment Report.
CDR approaches include both natural and technological methods. Natural approaches include afforestation (i.e., planting trees where they have not been in recent times) and reforestation, while technological approaches involve direct air capture (DAC) and carbon mineralization. A wide range of ocean CDR approaches are also under various stages of development.
DAC uses chemicals that react with carbon dioxide to capture and store it, typically underground. This approach is energy and heat intensive, requiring renewable and zero-carbon energy sources to maximize carbon removal. Several megaton-scale DAC facilities are currently in development in the United States.
Carbon mineralization accelerates natural weathering processes in rocks to permanently sequester carbon dioxide, through methods like enhanced rock weathering and ocean alkalinity enhancement. Carbon mineralization can also be used as a storage option for DAC. One of the main challenges for this approach is logistics, including effectively accessing, moving, and spreading the right rocks in the right places.
Biomass carbon removal and storage processes use photosynthesis to absorb carbon dioxide and prevent reemission. Storage techniques include burying biomass in a manner that prevents decomposition, pyrolyzing it into biochar and adding it to soil, and pyrolyzing it into bio-oil and injecting it into the ground. This process can be most beneficial to overall greenhouse gas emission reductions when it uses waste and residual biomass rather than biomass grown specifically for CDR.
Estimates on the quantity of CDR necessary to meet net-zero carbon emissions by 2050 vary. The Biden-Harris Administration’s U.S. Long-Term Strategy estimates roughly one gigaton of carbon dioxide will need to be removed per year, the Office of Fossil Energy and Carbon Management estimates roughly 1.3 gigatons of carbon dioxide, and the Fifth National Climate Assessment estimates between half a gigaton and one gigaton.
Currently, less than one million tons of carbon dioxide are removed annually in the United States. Although the rate of adoption has been increasing, it is significantly lower than what is necessary to meet CDR goals.
Policy support for CDR is essential because CDR is a public good without a built-in market. Effective policy must create supply and demand that would ideally support basic research, demonstration, and deployment for CDR technologies and approaches.

Galen Bower, Senior Analyst, Rhodium Group

The Rhodium Group’s report, The Landscape of Carbon Dioxide Removal and U.S. Policies to Scale Solutions, highlights four types of policy that are necessary to support CDR: demand-side policy to create a reliable market, research and development policy to spur innovation, demonstration and deployment policy to transition innovations out of the lab, and infrastructure and other supportive policies to enable integration of the CDR market.
The Inflation Reduction Act (IRA) (P.L. 117-169) increased the 45Q tax credit to $85 per metric ton of carbon dioxide stored. The separate tier for DAC increased the tax credit to $180 per metric ton of carbon dioxide stored.
The IRA also provided funding for natural CDR methods through U.S. Department of Agriculture programs.
The Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58) provided $3.5 billion for Regional Direct Air Capture Hubs that will each capture at least one million tons of carbon dioxide annually.
Current policy is insufficient to achieve one gigaton of carbon dioxide removed annually by 2050. Projections indicate that current policy will enable the removal of approximately 50 million metric tons of carbon dioxide per year, or approximately 5% of the one gigaton target.
Research and development policies to promote CDR include supporting pilot programs as well as funding feasibility studies, basic engineering, and pilot-scale demonstrations. In addition, effective monitoring, reporting, and verification standards are crucial to ensure effective carbon dioxide removal and sequestration.
Demonstration and deployment policies to promote CDR include loan guarantees to provide favorable rates compared to the open market.
Infrastructure and other supportive policies include further developing carbon dioxide transportation and storage, state action to complement federal CDR efforts, workforce development programs, and public education on the variety of CDR approaches available.

Peter Psarras, Research Assistant Professor, University of Pennsylvania

The Lawrence Livermore National Laboratory’s report, Roads to Removal: Options for Carbon Dioxide Removal in the United States, explores the potential of CDR technologies to identify appropriate technologies for different regions.
By 2050, the United States could potentially remove at least 1 gigaton of carbon dioxide annually using demonstrated technologies, which could create over 440,000 long-term jobs nationwide.
The analysis focuses on mature technologies for three main reasons: the availability of data; support in monitoring, reporting, and verification; and the ability to leverage existing technologies.
DAC is projected to have significant growth in the near future. Nature-based pathways are particularly important in the near term due to their cost-effectiveness.
Biomass offers substantial carbon removal value because it both helps achieve CDR goals and aids in the decarbonization of other sectors. It also produces valuable energy co-products, such as sustainable aviation fuel.
DAC should be located in regions with reliable geologic storage and access to renewable energy to maximize effectiveness.
Robust community engagement and comprehensive social and environmental impact assessments are necessary to understand the unique risks and benefits of proposed technologies to ensure that local communities are not negatively affected.
CDR is an interdisciplinary effort that requires collaboration across various fields to effectively address the complexities of carbon removal.

Laura Hatalsky, Deputy Director of Policy, Carbon Removal Alliance

CDR is essential, but it should not replace commitments to reducing greenhouse gas emissions. The United States aims to remove 25 million tons of carbon dioxide by 2030, a significant increase from the current less-than-a-million-ton annual figure.
Effective monitoring, reporting, and verification is vital for demonstrating the climate benefits of CDR across various systems, including the voluntary carbon market and nationally determined contributions (i.e., country commitments under the Paris Agreement).
The absence of an authoritative standards body leads to inconsistencies, as current registries lack oversight and often have incentives to over-credit carbon credits.
Immediate action is necessary to establish high-integrity processes as the carbon removal industry scales.
Rapid scientific advancements in carbon removal require better organization and transparency to attract more resources and build market confidence.
The Department of Energy (DOE) is actively purchasing carbon removal credits, positioning the United States as a leader in CDR policy and setting an example for the private sector to follow.

Q&A

Q: What are your reflections on Senator Bennet's remarks?

Lebling

Carbon removal can drive innovation and enhance national security. CDR policies can be structured to provide additional benefits beyond carbon removal itself.
For example, enhanced rock weathering on agricultural fields can boost crop yields and ocean alkalinity enhancement can mitigate ocean acidification.
CDR should not be carried out in a vacuum. Failing to meet U.S. greenhouse gas emission reduction goals may necessitate increasing carbon removal efforts beyond the target of one gigaton per year. While it is important not to rely exclusively on CDR, the United States must acknowledge our current reliance on it and avoid becoming overly dependent.

Bower

The wide array of CDR techniques allows communities to select the approach that best suits their specific needs.
For communities concerned about the transition of oil and gas workers out of the fossil fuel industry, options like bio-oil production or CDR methods involving injection and storage may be particularly relevant pathways.

Psarras

The United States stands out as one of the best locations in the world for deploying CDR technologies, making this an exciting opportunity.
The country's abundant and diverse resources provide a strong foundation for success in the CDR space.
Community engagement is crucial to align CDR benefits with a community's specific needs and priorities.

Hatalsky

With a commitment to innovation, the United States can continue to be a global leader in CDR.

Q: Is the oil and gas sector investing in CDR?

Hatalsky

Yes, one of the larger DAC companies in the United States is an Occidental Petroleum Corporation spin-off. Many of the companies that are members of the Carbon Removal Alliance have buyers from the oil and gas sector.
The Carbon Removal Alliance makes it clear that CDR is not a crutch to avoid decarbonization.

Psarras

Workers in the oil and gas sector have skills and experience that are transferable to and much needed in the CDR space.

Q: How might a carbon fee policy impact CDR?

Psarras

According to the Roads to Removal report, the carbon fee would be instrumental for the agriculture industry, because farmers need to make a profit.
A price on carbon can drive at least some demand for carbon dioxide removal (CDR) solutions.

Q: Do you see a shift in CDR from power-intensive methods to those that require less energy? Is this something the industry is currently considering?

Bower

Projects, like Project Bison, are struggling to implement CDR due to insufficient renewable energy supply, revealing a new hurdle for energy-intensive CDR methods. In the case of Project Bison, the main issue was the competition for renewable energy with new data centers.

Psarras

DAC facilities need renewable energy 24/7. In reality, most facilities would be using a virtual power purchase agreement where the DAC facility pulls energy from the local grid and purchases renewable energy certificates to match the energy used. It is important to understand what the actual carbon outcome is in terms of the load placed on the local grid compared to the renewable energy that is generated elsewhere. The assumption has been that they are equal, but current research shows they are not equal—and the difference can vary greatly depending on many factors. Some of the rules that are starting to be established for hydrogen are furthering this understanding, but hydrogen production and direct air capture are distinct industries.

Q: People working in the oil and gas sector are able to make a good living in that sector. What will it take to incentivize high earners in the oil and gas industry to transition to the nascent CDR field?

Hatalsky

Anecdotally, individuals are already switching over from these legacy industries.
More robust analysis is needed to know what these transition numbers actually look like.

Bower

In her personal experience, Bower is also seeing people with petroleum and geology backgrounds moving into CDR and carbon capture and storage.

Q: How should the United States start to build out CDR infrastructure when it is not yet clear what the best or most efficient infrastructure might be? How does Congress make sure it is not funding projects that will then need to be retrofitted later?

Hatalsky

Many technologies are modular and built to scale up. They can be added to over time.
Existing DOE programs can be leveraged for transportation and storage. A coordinated approach is necessary to scale up these projects effectively.

Psarras

Standardization in manufacturing is a great way to decrease costs and keep designs consistent.

Bower

Companies are taking innovation seriously and are adopting modular approaches.
It is less concerning that the United States will get stuck with infrastructure that cannot be used and more concerning that the speed of deployment may not keep up with the need to address climate change.

Lebling