New publication together with D. Treß on the need for the development of short term incentives for investment in CDR on an industrial scale.

The role of permanent carbon dioxide removal (CDR) from the atmosphere is currently the subject of intensive discussion within the context of developing a new EU emis­sions reduction target for 2040 and a German long-term strategy on negative emissions. At the same time, a short-term strategy for the coming years is needed to ensure the successful scaling of technologies for what can be called “industrial CDR”. So far, the focus has tended to be on a conceptual discussion of the quantities of CDR that are required to achieve net-zero greenhouse gas emissions; as a result, sufficient attention has not been paid to the question of how and on what time horizon the first large-scale CDR projects can come into being. Some countries have already developed short-term instruments aimed at triggering an initial investment drive into industrial CDR. A comparative assessment of these approaches reveals several viable policy options for targeted CDR scaling in both the EU and Germany.

https://www.swp-berlin.org/publikation/scaling-industrial-carbon-dioxide-removal-policy-options-for-a-short-term-strategy

Key takeaways:
1️⃣ Industrial CDR is a key pillar in reaching net-zero emissions goals
2️⃣ There is a need for action, particularly with regard to CCS-based methods: Already today, existing industrial processes using biomass waste (e.g. cement, lime, waste incineration) could deliver CDR capacities.
3️⃣ A “short-term strategy” would be the next sensible step: establishing new incentives after largely conceptual discussions about the amount of CDR needed in the long-term. The focus should be on how to support pending investments in low-hanging CDR potentials in existing industrial processes
4️⃣ With the possible reversal of CDR policy in the USA, the EU and Germany have an opportunity to lead globally, enhancing innovation and competitiveness
5️⃣ We analyze 4 feasible policy options with examples in other countries: tax credits, direct public procurement, contracts for difference, reversed auctions (see Table 1)

Core elements of a short-term CDR strategy:
▪️CO2 removal as an integrated component of carbon management (CDR, CCS, CCU) and CO2 infrastructure as a prerequisite
▪️Mapping achievable CDR capacities
▪️Incentivizing investments in these capacities
▪️Positioning Europe as an integrated carbon management market
▪️ Ensure CDR complements, not replaces, conventional emission reduction