The main thing holding carbon removal back

The biggest blocker to voluntary demand for carbon removal is that it cannot fulfill near-term climate targets. As long as durable CDR is reserved for “residuals only” and not seen as equal to, for example, biofuels and CCS, it will never scale.

Much has been said about how corporate climate standards treat carbon dioxide removal, but no one, myself included, has clearly written about the core issue holding CDR back: that it is the only mitigation option denied substitutability with the rest.

The SBTi and other standards view carbon removal as something you use for remaining “residual” emissions to reach a net zero target by a certain year. CDR is never treated as substitutable with other forms of mitigation, such as replacing fossil jet fuel with biofuel (SAF). Only substitution, CCS, and demand reduction/efficiency are SBTi-allowed methods up to the level deemed residual by 2050.

This is in

You could, very simplified, say the SBTi looks at how quickly decarbonization technologies could realistically be scaled up by 2050 if the whole world were on board, and then uses CDR for whatever is left. CDR need is just an artifact of other technologies not having reached 100% deployment by the net-zero date.

That means that CDR use is transient at best under the SBTi. It is something to be used to counterbalance residual emissions to reach net zero by a specific year, but then likely reduced to nothing as decarbonization technologies continue to scale up.2

The 2050 residual part SBTi assumes is very low. Using their beta version target setting tool, you can see that for general Scope 3, SBTi assumes a 90.9% reduction before removals are allowed. For electricity and heat near 100%. For the two sectors where CDR probably makes the most sense, aviation and shipping, the numbers are 97% and 100%, allowing almost no CDR3. These are the gross reductions required before carbon removal can neutralize the remaining emissions to achieve net-zero fulfillment. In other words, SBTi is neither letting companies meet near-term targets, nor net zero targets in the cheapest and fastest way possible4.

Only CDR is treated in this way. The SBTi categorically excludes durable CDR from target implementation while allowing other constrained, immature and potentially costly mitigation options. Even if the pathways the SBTi builds on only model, for example, 50% biofuel for aviation, a company could use 100% biofuel for its flights and still be SBTi-compliant. Similarly, even if CCS is limited to a small percentage of electricity generation in the model, there is nothing stopping a company from buying 100% of their electricity from sources using CCS. The pathway says how fast emissions must be mitigated, but is not used to determine what mitigation solution is chosen, except in CDRs case. Why CDR is singled out is never clearly motivated or defended.

There are various common arguments for why CDR should be treated differently than other types of mitigation; that it is limited and unproven, that it has externalities, that it is a must for certain sectors so should be saved for those, and that markets are not suitable to allocate CDR. In this previous article, I go through why none of these arguments justify categorical exclusion. CDR is not uniquely scarce, unproven or unique in having externalities. No CO₂-emitting activities must use CDR in the long run, and if CDR turns out to be scarce, prices will rise, limiting its use.

The strongest remaining argument would be to prefer full decarbonization, since that locks in continued net-zero. If CDR were allowed to substitute for mitigation, parts of the fossil infrastructure remain. If countries and companies later stop using CDR, emissions would continue. The risk of that would be much lower if you already phased out all emission-generating activities. That is a logically coherent argument, but applies to CCS as well which does count.

The real reason is probably simpler, accounting. They don’t want to allow out-of-sector offsetting, period. That is why in-sector SAF book and claim credits are allowed for aviation target fulfilment, but not CDR. This needs a justification. For cheap carbon credits with significant quality issues such as low additionality the choice is correct. But high quality carbon removal credits can be as good as many emission reductions.

Either way, excluding CDR means companies are forced to go for the hardest and most expensive path to net zero, making an almost impossibly hard task even harder.

The SBTi is not unique in singling out CDR. The draft ISO net zero standard shares the same fundamental reduction-first architecture. But a crucial distinction is that ISO gives companies the ability to justify higher residual emissions through a technical and economic feasibility analysis, including comparing available reduction solutions with the cost of durable CDR. Higher residuals would however not mean companies could meet short-term targets using carbon removal, restricting near-term demand.

The way SBTi and ISO tackle the need to grow CDR is to make scale up towards residual emissions mandatory, by 2035 in SBTi’s case, and within five years of setting the target in ISO’s case. For ISO there would be incentives for companies to keep the projected residual

The most pragmatic solution would be to introduce near-term net mitigation targets. Those keep how fast emissions must fall, but let companies use either durable carbon removal or other solutions to meet them. CDR use would of course be subject to stringent guardrails, just as other solutions like biofuels have them.

I do not have high hopes for an SBTi change to net mitigation targets (although possible for ISO). The SBTi 2.0 standard is finished and published. But I do hope for a clearer justification from the SBTi for their choice, something that would let us engage with the arguments and make clear to companies what normative choices have been made for them. (SBTi recognition for reaching operational net zero targets is also still a possibility.)

Making CDR count in the near-term is by far the most important issue to solve for the nascent carbon removal sector. It is also not just a voluntary-market issue. Scaling CDR in a compliance market also relies on it being seen as a mitigation solution in its own right, but thankfully the EU seems to be taking the right path here.

Share