Carbon Removals: How to Scale a New Gigaton Industry

Dec 4, 2023

CO2 removal (CDR) capacity is far from the gigaton scale needed to round out businesses’ net-zero efforts by 2050. We explore a mature CDR market’s potential and possible first-mover advantages.

The Intergovernmental Panel on Climate Change (IPCC) has made it clear that CO2 removal (CDR) is a critical tool for achieving net zero by 2050 because they could enable businesses to neutralize residual carbon emissions once all emission reductions efforts have been exhausted. Thus, by 2050, CDR competency could be a core part of management responsibilities across all sectors.

This report provides an analysis of the market potential for CDR, the investment requirements, and market trends. It also identifies which actions are the most likely to lower barriers to scaling CDR and delineates potential advantages for first movers in different stakeholder groups.

CDR’s role in reaching net zero

Reducing emissions remains the primary, most effective, and preferred response to climate change. But decarbonization alone could prove insufficient to reduce the residual “hard to abate” emissions that may persist in the medium term. Once decarbonization options have been expended, CDR could play a vital role in neutralizing residual emissions; therefore, most scenarios aligned with the Paris Agreement project substantial CDR capacities. Estimates from the Smith School of Enterprise and the Environment’s The state of carbon dioxide removal report, for example, show that six to ten gigatons of CO2 in annual CDR capacity would likely be needed by 2050 for most Paris-aligned net-zero pathways.

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