Climate Change

The push to scale carbon dioxide removal technologies

With the urgency of the IPCC report and a growing public awareness of CDR, investors, corporations, and policy makers are turning their attention to scaling the technology.
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Climeworks

· 5 min read

For the first time, the Intergovernmental Panel on Climate Change (IPCC) report released last week included a section on carbon-dioxide removal (CDR), noting that it will be necessary to pull existing CO2 out of the atmosphere in order to meet climate goals.

This topic has sparked a heated discussion about carbon-removal technology, most of which remains in its early stages and very expensive. Experts say mitigating the impacts of climate change will require deploying existing, affordable solutions, like wind and solar, and funding nascent tech that we’ll need in the coming decades.

The world will need to remove 6–10 billion metric tons of CO2 per year by 2050 to stay within 1.5 degrees Celsius of warming, according to the IPCC report and other estimates. That’s a massive jump from the less than 10,000 tonnes of CO2 we’re currently removing annually.

Reaching that scale by 2050 would mean growing CDR by about 45% every year for 30 years, according to Gregory Nemet, a professor at the University of Wisconsin-Madison and co-author of the latest IPCC report who researches how climate tech scales.

“Solar and wind were slightly slower than that…electric vehicles are going a little bit faster than that,” he told Emerging Tech Brew. “So we’re kind of at the upper end of what has happened in the past, but it’s not unprecedented. We’ve certainly seen technologies grow faster than CDR needs to grow to get to gigatonnes.”

With the urgency of the IPCC report and a growing public awareness of CDR, investors, corporations, and policy makers are turning their attention to scaling the technology.

So what are the options to address this giant problem? Here’s a short list of recent actions that could help move carbon removal toward viability.

Corporate funding: Earlier this week, Stripe, Alphabet, Shopify, Meta, and McKinsey Sustainability announced they would spend a collective $925 million over the next nine years on permanent carbon removal. They created Frontier, an advanced market commitment that will work to ensure future demand by enabling large organizations to purchase high-quality carbon removal from startups developing promising technology.

  • The aim is to conduct due diligence on emerging CDR tech and provide a customer base to CDR startups looking to scale. On Frontier’s website, its founders say they want to send a “strong demand signal” to the industry and help accelerate the increase in the supply of CO2 removal.
  • “What we’ve known from previous technologies that have scaled up is that it’s confidence there’ll be a market in the future which has really helped enable investments in new manufacturing,” Nemet said.
  • While it remains a voluntary market, DAC startups told Emerging Tech Brew they are seeing an uptick in demand for carbon removal from companies this year.
  • Frontier is a wholly-owned subsidiary of Stripe, and will also receive funding from tens of thousands of businesses who purchase carbon removal via Stripe Climate, according to the companies.

Policy moves: Following the release of the IPCC report, Reps. Paul Tonko (D-NY) and Scott Peters (D-Calif.) introduced legislation in Congress that would provide federal support for CDR tech.

  • The Federal Carbon Dioxide Removal (CDR) Leadership Act would require the US Department of Energy (DOE) to remove an increasing amount of CO2 each year, using direct air capture and other carbon-removal tech. It would also require the DOE to invest in smaller CDR projects and emerging carbon-removal technologies.
  • The New York Legislature introduced a bill with the same aim at the state level earlier this year. The Carbon Dioxide Removal Leadership Act would direct the state to purchase at least 10,000 tonnes of CO2 removal in 2024 and then double that target each following year for a five-year period.

Venture capital: Direct air-capture startup Climeworks raised $650 million earlier this month—the largest round ever for a CDR company, according to Bloomberg. The Swiss startup operates the world’s largest DAC plant in Iceland, which can pull about 4,000 tonnes of CO2 out of the atmosphere each year.

  • Climeworks plans to use the funds to build a 40,000-tonne DAC plant in the next three years. The company’s goal is to remove more than 1 million tonnes annually by 2030.
  • And more money for CDR is on the way. On Thursday, VC firm Lowercarbon Capital announced it has raised a $350 million fund focused on backing carbon-removal startups.
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Big Picture: The most recent IPCC report is extremely bleak. It found that current levels of warming are already leading to the spread of diseases, mass die-offs and extinctions, food and water shortages, and the transformation of carbon sinks into greenhouse-gas emitters—and that the world’s most vulnerable populations face the greatest losses and damages.

“Any further delay in concerted global action will miss a brief and rapidly closing window to secure a liveable future,” Hans-Otto Pörtner, a co-chair of Working Group 2 of the IPCC, told The Guardian.

It will take public- and private-sector support to deploy and scale the technologies that can help mitigate the worst impacts of climate change.

“You can make billion-dollar [CDR] companies and not make a dent in the climate,” Nemet said. “Say it’s five gigatonnes [of CO2 removal] a year: If that’s at $100 a tonne, that’s half a trillion dollars a year of investment. That’s a huge market. So that’s the scale we’re talking about to make a difference for the climate. If it’s a bunch of even $10 billion companies, it’s great, that’s helpful. But it’s not material enough to help the climate.”

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