Barriers to scaling the long-duration carbon dioxide removal industry

To reach net-zero targets and stabilize global temperatures, we will need to dramatically cut emissions and remove large quantities of carbon dioxide from the atmosphere. Awareness is growing around the need for long-duration carbon dioxide removal (CDR) — a suite of largely nascent approaches to removing CO₂ from the atmosphere and storing it for hundreds of years or more. To date, private sector investment in long-duration CDR via the purchase of carbon credits has largely happened outside of the conventional offsets system and in the absence of established third party standards.

We conducted this assessment to explore whether the general lack of third-party standards for long-duration CDR currently presents a barrier to its growth, as well as how critical of a factor that is relative to other market barriers. Through the course of our interviews, we found that the lack of standards is not considered a main barrier to scaling up long-duration CDR today, but is expected to grow in importance as initial markets expand to reach a broader set of buyers.

We executed this assessment in four stages. First, we set out to understand how existing third-party standards in the conventional offsets market are poised to interact with long-duration CDR approaches, today and in the future. Second, we identified a set of key stakeholders involved in the current long-duration CDR ecosystem, and grouped them according to their role (CDR Providers, Buyers, Brokers, and System Actors; see Table 1). Third, we developed surveys to gather stakeholder perspectives on third-party standards and other potential barriers to long-duration CDR. Finally, we conducted 37 virtual interviews, synthesized survey input, and identified convergent and divergent stakeholder perspectives on the barriers to scaling long-duration CDR. These perspectives are summarized below.

Convergent perspectives

We identified three perspectives that were commonly shared across stakeholders.

First, stakeholders commonly expressed their view that the lack of third-party standards does not present a major barrier to scaling long-duration CDR approaches in the short term. However, most interviewees also recognized that standards could play an increasingly important role as the market for long-duration CDR grows. Views largely converged around the notion that trusted third-party standards may be needed to attract the next wave of buyers, who will likely be more risk averse or have less internal capacity and expertise than today’s buyers.

Second, stakeholder perspectives also converged around the view that public sector support is the most important factor for scaling up long-duration CDR. Stakeholders acknowledged that voluntary private sector demand has played an important and catalytic role to date, but expressed the view that the public sector will play a larger role than the private sector in enabling long-term growth.

Finally, many stakeholders stated that successfully scaling up long-duration CDR will require costs to fall, with a common benchmark suggestion of $100 per ton. Despite many interviewees anchoring to this number, there was a lack of consistency on how stakeholders interpreted it: some framed it as a break-even point for the provider, others as a post-incentive price to the buyer, and others still as a full cost net of government incentives and producer margins.

The lack of clarity highlights the need for more modeling and analysis around target costs, as well as greater clarity on how the CDR community defines its long-term goals.

Divergent perspectives

We also identified four topics on which stakeholder perspectives split into two or three distinct points of view.

First, although stakeholders converged on the importance of public sector involvement to scale long-duration CDR, they expressed different views on the specific role the public sector should play. One view was that governments should set standards and technology-neutral policy signals, and then “get out of the way.” A second view preferred a more catalytic role in which proactive policies would serve to “crowd-in” investment, support research and development, and streamline deployment. A third view imagined governments acting as large-scale buyers and directly procuring long-duration CDR. While these views were not mutually exclusive and some stakeholders indicated a preference for combining multiple approaches, the diversity of views signaled the need for more discussion within the CDR community about the appropriate policy levers for scaling up long-duration CDR.

Second, stakeholders expressed divergent perspectives on the role of conventional carbon offset registries in developing third-party standards for long-duration CDR. Some providers and brokers shared that they are already working with conventional offset registries to establish standards, despite encountering logistical challenges with respect to the speed and cost of this approach. Other providers indicated that they are avoiding conventional registries altogether based on fundamental critiques of the conventional offset registry system.

Third, views also diverged around the importance of brokers, advisors, and marketplaces for scaling long-duration CDR. Some stakeholders expressed the view that brokers add tremendous value to the market, providing much-needed transparency and scrutiny for novel projects that most buyers cannot provide in house. Others expressed the opinion that brokers have a less important role to play in helping to scale long-duration CDR because they are subject to significant price and supply constraints over which they have little influence.

Finally, while buyers ranked cost as the most important barrier to scaling up CDR, providers were generally sanguine about reducing costs over time and did not see it as a major barrier. Providers suggested that current high prices do not appear to be stifling near-term demand, and many expressed confidence that costs will come down as CDR technologies mature.

Note that, because our survey only included buyers who have made long-duration CDR purchases, our results do not incorporate perspectives expressed by those who either did not consider or did not choose long-duration CDR on the basis of current costs.

Other notable stakeholder views

In addition to the convergent and divergent perspectives summarized above, interviewees also identified two significant issues.

First, stakeholders expressed dissatisfaction about how two major standard-setting initiatives address long-duration CDR approaches — namely the European Commission’s CDR certification framework consultation and the Science Based Targets initiative (SBTi). Our survey included a question about the European Commission’s consultation. Although relatively few stakeholders indicated they were familiar with the details, those who were expressed concern that the framework does not adequately identify or prioritize long-duration CDR in comparison to short-duration carbon removal approaches involving forests and soils. Without any prompt from our survey questions, many stakeholders also expressed concern about the SBTi’s corporate net-zero standard, specifically that the guidelines set forth do not send a clear message about how corporations should plan to incorporate long-duration CDR into their net-zero strategies. These statements highlight the need for greater participation from long-duration CDR stakeholders in both public and private sector standard-setting initiatives.

Second, many stakeholders identified infrastructure challenges as an emerging area of concern and potential supply bottleneck, especially the lack of safe and effective CO₂ storage and transportation infrastructure. Stakeholders perceived a lack of resources being directed toward the infrastructure needed to support future deployment of long-duration CDR.

As public interest grows and new policies and financing mechanisms take shape to help scale up long-duration CDR, it is more important than ever to address the institutional barriers that could limit its responsible growth. We learned that the barriers to scaling up long-duration CDR are complex and that the opportunities to address areas of divergence and confusion are numerous. Greater stakeholder engagement is needed to explore the different roles the public sector could play in scaling long-duration CDR, create alignment on how costs are defined, and clarify the implications of emerging supply and infrastructure concerns. Although stakeholders did not identify the lack of coherent third-party standards as the most pressing concern today, there was a general consensus that the absence of credible standards is a significant risk to market growth in the years ahead. We believe that deeper stakeholder engagement and more research and analysis on the topics covered in this assessment are critical prerequisites to building a mature CDR industry that is effective in helping achieve global climate goals this century.