Policymakers will need to reduce the costs and scale of reliance on engineered removals by focusing on the demand side, reforming net zero policies and collaborating internationally on negative emissions approaches.
The ‘energy trilemma’ requires decision-makers to consider the three pillars of sustainability, security and affordability. This research paper has examined whether the high energy input, and hence the high cost, of engineered CO₂ removal technologies stands up to scrutiny in a context in which governments are prioritizing considerations of energy security and affordability. It also makes the case that governments need to think of more collaborative, cooperative and multilateral approach to BECCS and DACCS, where the costs and risks are shared and minimized. But even where costs are minimized, this does not mean that these technologies are low-cost solutions.
The emergence of a multi-polar world over the last few years has reshaped geopolitics, and disrupted established trade dynamics and supply chains. Nowhere is this more acutely evident than in the energy sector, where countries are already navigating new supply-chains costs that necessarily come with the net zero energy transition. The geopolitical shifts and ongoing conflicts compound the consequences of a period of historically low investment in upstream oil and gas exploration and production. Future oil and gas price rises cannot be ruled out, and many market analysts anticipate ongoing price volatility.
For all these reasons – and compounded by wider inflation and cost-of-living concerns across the world – urgent questions of energy security and affordability have risen up the political agenda, and are competing on the desks of decision-makers with the more expensive elements of net zero strategies. Indeed, in the EU, the US and the UK, the costs of net zero are coming under increased political pressure.
Based on NDC documents submitted to the UNFCCC, the upper-end projection of engineered removals is around 0.97 GtCO₂/yr of engineered removals in 2050, equivalent to 3.3 per cent of the fossil fuel emissions from G20 countries in 2023. This is largely driven by the US (52 per cent share), the EU (27 per cent share) and Canada (21 per cent share). Across all the IMPs assessed by the IPCC, engineered removals constitute 2.75 (0.52–9.45) GtCO₂/yr for BECCS, and 0.02 (0–1.74) GtCO₂/yr for DACCS, in 2050. Combined, engineered removals would therefore, by 2050, be sufficient to sequester 9.4 per cent of 2023 fossil fuel emissions from G20 countries, with 99 per cent coming from BECCS.
The primary near-term risk is that reliance on engineered removals technologies will be highly expensive, requiring subsidies paid for by taxpayers or energy consumers, or via carbon markets.
The high heat energy input requirements of engineered removals represent nearly 50 per cent of the cost of DACCS, and at least 33 per cent of the cost of BECCS. The risks of relying on engineered removals, primarily BECCS, at the scale G20 countries have indicated are multifaceted. However, the primary near-term risk is that reliance on engineered removals technologies will be highly expensive, requiring subsidies paid for by taxpayers or energy consumers, or via carbon markets with costs again, ultimately, passed on to consumers via increased prices of goods and services. This could have a disproportionate impact on low-income households, either as consumers or taxpayers, depending on how subsidies are paid for.
Not only do engineered removals entail high opex fuel input costs, which are undesirable for any government currently concerned with energy security and price, BECCS deployment costs, in particular, are unlikely to benefit from high learning rates. Technologies with high learning rates, and therefore fast cost reductions, tend to be modular, with thousands to millions being produced each year, such as solar panels and wind turbines, as well as lithium-ion batteries for EVs. All of these technologies have demonstrated – and continue to demonstrate – rapid cost reductions. BECCS is generally being considered as a retrofitted technology, with large CCS infrastructure being fitted to existing bioenergy power stations and coal power stations with fuel switching. As such, at most hundreds of BECCS facilities are likely, meaning that the opportunity for engineers and contractors to learn from experience, improve build efficiencies and drive down costs is more limited than for their modular competitors.
Assuming wood pellet prices remain at a similar level to the 2027 forward price illustrated in Chapter 3, and that BECCS is responsible for 99 per cent of the 2.77 GtCO₂/yr sequestration level within the IPCC’s AR6, by 2050 engineered carbon removal costs could climb from the high end of the $192–315 billion/yr range, to up to $460 billion per year. This in turn would represent 13 per cent of annual clean energy investment. This is 6.4 times the cost of wind, solar and EVs mitigating the same amount of CO₂. It should be noted, however, that as the global emissions gap widens CO₂ removal will become more important relative to mitigation, and that CO₂ removal should be additional to both renewable deployment and fossil fuel phase-out.
The significantly large costs of engineered carbon removals should be set within the context of historically high levels of countries’ debt to GDP, as well as the ongoing war in Ukraine, and tensions in the Middle East and Asia leading to military spending increasing by 6.8 per cent in 2023, reaching $2.4 trillion globally.
The risk, therefore, is that the future costs of engineered removals may be incompatible with the new energy security and affordability era, and therefore the reliance that countries have already built in cannot be fulfilled. This would widen the emissions gap and increase the risk of triggering accelerated climate change.
While engineered CO₂ removal technologies hold some promise for mitigating climate change, the very real cost challenges, particularly when relied on at scale, mean that addressing supply-chain and build-cost barriers will be crucial for unlocking their full potential.
International collaboration
A cooperative and collaborative approach to CO₂ removal, based on equitable burden-sharing and CO₂ storage trading, is needed to meet global removal targets at least cost. This is principally because countries do not all possess the same geological and biophysical assets to help them provide sustainable, permanent and affordable CO₂ removal.
Many multinational companies have already forged corporate partnerships with BECCS and DACCS developers. However, international cooperation between countries remains limited; what does exist is largely centred within the EU, coordinated by the European Commission.
International cooperation projects play a crucial role in reducing the risks and costs associated with deploying new and innovative technologies. Cooperation between countries can facilitate knowledge exchange, enable technology transfer, reduce duplication costs and streamline supply chains via standardization.
Nuclear power, like engineered removals, is highly contentious and costly relative to other low-carbon technologies. Moreover, the storage of radioactive waste, like the geological storage of waste CO₂, requires careful consideration for its permanence and leakage risks. Furthermore, the supply chains of uranium and plutonium encompass critical risks, albeit very difficult to those concerning woody biomass for BECCS.
In 2010, the World Nuclear Association set up the CORDEL working group, with the aim of achieving greater international standardization in nuclear reactor design. Harmonization of reactor design not only brings increased confidence in safety, but also lowers construction costs. France’s National Audit Office reported that EDF was able to leverage the standardization of the French fleet, with a vertically integrated supply chain, resulting in significant cost reductions.
Standardization between countries requires industrial organization, resulting in increased manufacturing productivity via the production of a greater number of identical components. Increased volume production via standardization also boosts supply-chain competition, and facilitates long-term contracting. Standardization also enables operational efficiency and learning. This highlights the potential for international collaboration, via programmes akin to CORDEL, to reduce the costs of engineered removals. Moreover, greater efforts need to made towards an international regulatory framework for risk governance of carbon capture and storage.
Based on the experience of various global collaboration efforts around innovative but highly expensive technologies, greater international cooperation around engineered CO₂ removal technologies has the potential to minimize costs and scaling risks through various mechanisms:
- Governments can provide incentives for innovation and facilitate collaboration between public and private sectors by encouraging investment in R&D.
- Collaborative R&D efforts enable countries to pool resources, expertise and infrastructure. This is crucial given that countries do not possess equal geological and biophysical assets in order to provide sustainable, permanent and affordable CO₂ removal.
- International research collaborations also enhance the robustness and credibility of engineered removal technologies, by subjecting them to peer review, validation and independent assessment.
- International collaboration allows countries to share the financial burden and risks associated with developing and deploying engineered removals at scale. Pooling financial resources reduces individual countries’ exposure to high upfront costs and uncertainty, making engineered removals more economically viable and attractive for investment.
- By coordinating supply chains, standardizing processes and sharing infrastructure, countries can reduce production costs, streamline operations, foster a skilled workforce and enhance scalability.
- International harmonization of policies, regulations and standards can ensure consistency and coherence across jurisdictions, and reduce regulatory uncertainty and compliance costs for industry.
We need to rethink ever-increasing energy demand
Focusing on reducing demand in the short term could allow time for supply-side decarbonization efforts to catch up, and thus decrease the scale of dependence on engineered removals. Measures that reduce demand – among them energy efficiency improvements, lifestyle changes and behavioural shifts like those shown in Figure 9 – can lead to rapid reductions in emissions.
As was highlighted in Chapter 4, in 2022 the IPCC stated:
The IPCC classifies future emissions reduction mitigation strategies from the demand side as ‘avoid’, ‘shift’ and ‘improve’ options. As shown in Figure 9, the behavioural change elements of avoid and shift amount to around 7 tonnes CO₂e per capita; for context, per capita emissions from fossil fuels and industry are around 15 tonnes CO₂ in the US, a little over 7 tonnes CO₂ across the EU, and 8 tonnes CO₂ in China. Indeed, across three end-use sectors (buildings, land transport and food), the IPCC indicates with a high level of confidence that the demand side could reduce emissions of direct and indirect CO₂ and non-CO₂ greenhouse gas emissions by between 40 and 70 per cent globally by 2050.
Net zero needs reform
While the pursuit of net zero has created a broad church, and many companies in sectors where CO₂ abatement costs are high have signed up, there exists an ambiguity within national-level net zero targets. Often, governments do not stipulate a precise split between emissions reductions through conventional low-carbon technologies, and CO₂ removals via GGRs, inclusive of engineered removals. As such, a moral hazard exists whereby the world’s future reliance on engineered removals and all GGRs could exceed what is technically feasible, and at the same time reduce collective action to deploy proven and cost effect low carbon technologies that already exist.
Net zero commitments, while essential, require reforming in several ways to ensure their effectiveness and credibility over the coming years, particularly if reliance on GGRs increases. As a priority, net zero legislation needs to define the split between emissions reductions and removals; this split could change over time, and be reviewed by an independent body. In the UK, for instance, this body could be an entity like the Climate Change Committee, which could undertake yearly reviews. As engineered removals costs increasingly become clearer, and are no longer withheld for reasons of commercial confidentiality, the scaling risks ought to become better understood and managed, meaning that reliance on the technologies could justifiably grow. Conversely, if engineered removals fail to meet key performance indicators, reliance on removals within net zero commitments should be commensurately reduced.
Reforming net zero strategies to prioritize emissions reductions at source, rather than relying on CO₂ removal offsets or credits based on yet-unproved engineered removal technologies, is essential in order to avoid greenwashing, and to ensure that net zero targets are credible and effective in addressing climate change. This in itself is important if major policy failures are to be avoided, trust in government is to be maintained, and more harmful backlash against net zero policies is to be averted.
Summary of recommendations
- Greater international cooperation between countries is required to minimize the costs and risks associated with large-scale reliance on BECCS and DACCS. Such cooperation will need to:
- Acknowledge that countries do not possess the same geological and biophysical assets that would allow equal provision of sustainable, permanent and affordable CO₂ removal at scale, globally. Regions with geological storage sites need to collaborate with regions with significant biomass resources.
- Renew efforts to build international governance concerning the permanence of CO₂ within geological storage sites.
- Establish new international standards around the entire supply chain to drive down costs, as well as regulating sustainability standards pertaining to biomass.
- Facilitate the sharing of technological innovations to reduce costs.
- Greater transparency is needed between commercial developers of BECCS and DACCS, governments and the public regarding costs, allowing for the sensitivity of commercial information.
- Within net zero strategies, the split between emissions reductions and removals needs to be clearly defined, to reduce the risks of over-reliance on engineered carbon removal offsets that could fail to fully materialize. This split can be reviewed and amended over time as engineered removal technologies are deployed and more evidence of their performance becomes available.
- Greater focus needs to be placed on energy efficiency and demand management in order to reduce reliance on engineered removals, and simultaneously ease both energy security and affordability concerns.
