Tag Archive for: Carbon Removal

Carbon markets: Which role does biomass play?

/by

Although compliance and voluntary carbon markets vary in scope, mechanisms and participants, biomass occupies a unique place. In compliance carbon markets such as the EU ETS, participants are obliged to monitor and report their emissions and ultimately pay for them. Using biomass in industrial facilities can allow for reduced financial burdens. Regulators set rules around biomass use and sustainability criteria to comply with. A large part of voluntary carbon market credits is generated by nature-based solutions, including forestry and other biomass-related projects. These projects are however under intense scrutiny due to issues regarding transparency and associated climate claims. Novel carbon removal solutions with biomass as feedstock show promising development and renewed regulatory oversight could restore trust.

Which CO2 and which carbon markets?

To assess the relevance of carbon markets for biomass and vice versa, requires an understanding of different types of emissions and how carbon markets account for them. The sources of CO2 emissions and their final sink can be categorized into four main pathways (Figure 1).

  • Unabated carbon emissions from fossil sources add emissions to the atmosphere (grey and black)
  • Abated emissions from fossil sources through carbon capture and storage (CCS) with long-term storage might not add additional GHG emissions to the atmosphere (purple)
  • Negative emissions through nature-based or technological carbon dioxide removal (CDR) solutions taking CO2 out of the atmosphere and storing it durably (green)
  • Utilisation of CO2 through carbon capture and utilisation (CCU) technologies, where the ultimate source of the CO2 (atmospheric or fossil) and the final product into which the CO2-molecules has been transformed determine the climate impact (blue)

Detailed analysis of the technological pathways, supply-chain emissions, and substitution effects is required to establish emission reduction potentials of these solutions.

Figure 1: Different pathways of CO2: fossil emission, CCS, CCU and carbon dioxide removal. Source: carboneer

Compliance and voluntary carbon markets both incentivise emission reduction or carbon removal, however each from a different angle. Compliance carbon markets aim to fulfill national or regional climate targets. By putting a price tag on emissions and they incentivise compliant actors to reduce their emissions in a cost-efficient way. The mechanics of voluntary carbon markets (VCM) aim at financially supporting projects that either reduce emissions or provide negative emissions through CDR. Private actors can purchase carbon credits from project developers to offset or neutralise their corporate emissions.

The EU ETS: zero rating for biomass

The EU ETS is one of the largest and most mature compliance carbon markets. Since its inception in 2005, the EU ETS has been a cornerstone of EU climate policy, covering 35-40% of the region’s emissions. Large industrial facilities, such as steel mills, chemical plants, cement kilns, and power plants as well as aviation and maritime transport operators need to monitor and report their annual emissions. For each ton of CO2-eq emitted, the compliant entity must surrender an emission allowance. The price of this allowance is determined at the market. Currently, many industrial facilities still receive free allowances. To prevent carbon-leakage while facing out this free allocation, the Carbon Border Adjustment Mechanism (CBAM) requires importers of certain goods from non-EU countries to report the embedded carbon emissions in imports and from 2026 onwards also to pay the same carbon price as EU-based industry. Most emissions from buildings and road transport in the EU are not yet subject to a carbon price. This changes with the new EU ETS 2 covering another 35-40% of the EU’s GHG emissions. Since 2024, suppliers of liquid, gaseous or solid fuels are required to monitor and report emissions released by their fuels at the end-user. Pricing in the EU ETS 2 starts in 2027.

Carbon in biomass ultimately comes from the atmosphere. When combusted, only CO2 stored in the biomass is released back to the atmosphere. However, for a comprehensive life cycle assessment, factors such as land-use emissions due to biomass harvesting or emissions along the value chain need to be considered. According to current regulations, emissions from biomass and biofuels in the EU ETS 1, CBAM and EU ETS 2 can generally be counted as zero, thus reducing the number of allowances to be purchased by compliant entities and reducing their costs (Figure 2). Depending on the type of biomass and its utilisation, compliance with the Renewable Energy Directive for sustainability or GHG saving criteria needs to be achieved.

Figure 2: Criteria for biomass utilisation in the EU ETS 1. Source: carboneer

VCM: Carbon removal with biomass

Forests, mangroves, biochar kilns and waste-to-energy plants with CCS all have in common that they are examples of biomass-based project on the VCM. Private entities purchase carbon credits from project developers to offset or neutralise their (hard-to-abate) emissions. These projects either reduce emissions or remove CO2 from the atmosphere and must follow certain standards and methodologies for project set-up and emission calculation. Third-party verification of the projects’ climate effects is needed to create trust and transparency in voluntary carbon markets where regulatory oversight is only rudimentary.

While a wide range of VCM methodologies and projects exist, biomass-based projects are ubiquitous and particularly divers. Many biomass VCM projects potentially create negative emissions (to stay within the targets of the Paris Agreement, estimates for the required global carbon removal capacity range from 5-10 Gt/year or 5-20% of today’s total emissions). While trees might store atmospheric carbon for decades, technological solutions, such as pyrolysis with biochar or bioenergy with CCS remove carbon for hundreds or thousands of years. Project developers and buyers of credits on the VCM need to navigate complexities arising from cost considerations, project types and quality, and applicable methodologies and standards (Figure 3).

Figure 3: Carbon removal solutions and considerations for VCM projects. Source: carboneer

To reduce the lack of credibility that has plagued the VCM and associated climate claims of credit buyers, the EU currently develops its own methodologies under the Carbon Removal Certification Framework. As corporates are increasingly under pressure to develop credible climate strategies, carbon removal solutions utilising biomass have their role to play. Several announcements of large-scale credit purchases by corporates from biochar and bioenergy with CCS project developers underscores that point.

Biomass and carbon markets: the take-aways

CO2 is not CO2: The ultimate origin of the molecule matters. Compliance and voluntary carbon markets assess emissions from different perspectives and objectives. Due to the wide array of biomass applications, rules on eligibility as well as on emission accounting in compliance and voluntary carbon market differ. Biomass use in the ETS can reduce costs for industrials and allow for decarbonisation at the same time. Biomass enables carbon removal solutions, but stakeholders need to navigate the murky waters of voluntary carbon markets. Finally, interactions between the EU ETS and the VCM might be restored against the backdrop of industrial carbon management policies, the need to scale carbon removal and to provide market stability in the ETS. Complexities abound when biomass meets carbon markets.

This article appeared first in Bioenergy International No 1-2024

Carbon Removal going mainstream? The EU carbon removal certification framework

/by

What is it and why is it needed?

In December 2021, the EU Commission published its Sustainable Carbon Cycles Communication in which it outlined the EU’s plan to capture and store carbon dioxide from different sources in order to reach climate neutrality by 2050. Core elements are:

  • Developing an industrial carbon usage registry;
  • Setting a carbon removal target through technological solutions;
  • Strengthening carbon farming to sequester CO2 in soils to contribute to the net removal target in the land sector of 310 million tonnes of CO2-eq by 2030.

To expand the implementation of carbon removal solutions, it is essential to establish a regulatory framework for the certification of carbon removals. Therefore, the European Commission has released additional information on the proposed voluntary and EU-wide framework in the end of 2022. It is known as the EU Carbon Removal Certification Framework (CRCF) and includes several outstanding issues to be addressed. The CRCF aims to promote carbon removal solutions, encourage carbon farming approaches, and to prevent greenwashing by establishing trust through the implementation of standards and certification procedures. Therefore the EU’s ability to measure, monitor and verify carbon removals needs to be ensured, while stimulating financing options from public and private sources.

Under the proposed framework, carbon removal projects may take a nature-based or technological approach. The certification of carbon storage in long-lasting products or materials is also possible. Figure 1 provides an overview of different carbon removal methods, their concrete implementation, and the final storage medium.

Figure 1: Taxonomy for carbon removal (source: IPCC)

Importantly, carbon removal projects under EU certification have to comply with the QU.A.L.ITY criteria and need to:

  • be QUantifiable and QUantified;
  • Additional to existing climate benefits;
  • strive for Long-term storage;
  • contribute to sustainabilITY.

Given the frequent criticisms leveled at the methodologies and practices of the voluntary carbon market, establishing a regulatory framework for carbon removal activities is crucial. The criticism relates to the lack of oversight, transparency, trustworthiness, and climate impact (additionality) of the projects and certificates on this market. All of these can create significant problems for entities relying on voluntary carbon credits to offset or neutralise their emissions as part of their climate strategy, as highlighted in a recent investigation. A regulated market can restore confidence and ensure that all projects conform to the same rules regarding accounting, monitoring, reporting, and verification.

How would the EU certification framework work?

The certification framework will be based on criteria and certification methodologies to be developed by the EU Commission with the support of an expert group. The Commission then recognises private or public certification schemes that register carbon removal activities, control audits and certificates, maintain public registries, and also issue the carbon removal units. The operators of carbon removal activities, such as farmers, biochar producers or BECCS power plant operators need to be audited against the certification methodologies by accredited private certification bodies. Only after a successful audit and recognition by the certification scheme, would the operator’s carbon removal activities be certified by the certification scheme (compare Figure 2).

Figure 2: Working principle of the certification system (adopted by author from EU Commission)

The current proposal allows the EU Commission to adopt secondary regulations, such as delegated acts, to establish the different technical certification methodologies and to harmonise rules for certification and recognition of certification schemes. Given that carbon removal is a new and evolving field, new certification methodologies certainly need to be developed over time.

Next steps for developing the methodologies

As mentioned above, the EU Commission has not developed detailed carbon removal methodologies or criteria yet. During the coming months the external expert group will develop tailored certification methodologies for different carbon removal activities. For reasons of transparency, related documents are being published and the first meeting took place on 7 March 2023, while carbon farming methodologies will be the topic of the next meeting on 21 and 22 June 2023. The timeline for the upcoming meetings of the expert group is depicted in Figure 3 (source: EU Commission).

Figure 3: Upcoming meetings of the expert group on carbon removal (source: EU Commission)

The Commission’s proposal also needs to be adopted by the European Parliament and the Council in a normal legislative procedure. At the end of April 2023, the responsible committee of the European Parliament published their first response with proposed changes to the Commission’s CRFC. Improving monitoring, liability and transparency mechanisms and a focus on long-term carbon removal are a priority for the Parliament to prevent low-quality removals. The report also calls for allowing permanent carbon storage outside of the EU Member states, if the carbon is captured in the EU and stored under similar rules to the EU. This would open the way to account for geological storage in countries such as Norway or Iceland.

Our assessment and issues to be solved

The proposal for the EU CRCF is commendable for being among the first globally to address the need for removals in climate policy and for stringent, transparent regulatory oversight on certification of removal activities. However, several issues still need to be resolved to ensure that the climate effect of the removal activities under the CRCF can become a reality: Removal activities through nature-based solutions could be short-lived and thus the climate impact could be reversed quickly. Furthermore, it is unclear how differing risks for reversals depending on the removal solutions will be dealt with and which actor will ultimately be (financially) responsible.

As there is currently a lack of details on the methodologies for the different removal activities and the certification schemes, the EU Commission, together with the expert group, needs to develop tailored rules for different removal activities. Especially the issues of reversal and liability mechanisms have to be addressed as well. It is essential that these rules are developed in a transparent and collaborative manner with input from stakeholders across the carbon removal industry to ensure that they are effective in promoting long-lasting carbon removal solutions while also providing clear guidelines on liability and risk management.

Reach out if you would like to learn more about the proposed regulation and understand how it impacts your business model or offsetting strategy.

Carbon Management and CCU/S in Germany

/by

The German government is currently developing a Carbon Management Strategy for CO2 storage and utilisation. Because, one thing is indisputable: Without the capture, use and storage of CO2 from industrial processes (CCU/S) and the atmosphere, Germany can hardly become climate neutral by 2045. The basis for the Carbon Management Strategy is the new evaluation report on the Carbon Dioxide Storage Act. In this article, we explain the key points and principles of such a strategy.  

The CCU/S nomenclature

For the purposes of consistent nomenclature, we use the term carbon management below as an umbrella term for carbon management that includes CO2 capture, transport, and use (CCU) or storage (CCS) from fossil as well as biological or atmospheric sources as negative emissions or carbon dioxide removal (BECCS and DACCS). Likewise, dealing with other nature-based solutions to remove and reduce greenhouse gas emissions from the atmosphere is part of carbon management (see Figure 1).

Diagram Description automatically generated
Figure 1: Sources and sinks of CO2 emissions of the different components of carbon management (source: carboneer).

The impact on the climate and the technical and economic details of the different technologies and options are complex and require detailed analysis. Feel free to contact us for more information.

Carbon management necessary for climate neutrality

In early January 2023, German Economics Minister Robert Habeck travelled to Norway to explore further cooperation in the field of energy and climate. Among other things, the topic of CO2 capture, transport and storage is to become an important part of the cooperation with Norway. With tightening climate targets at EU and German level, it is becoming increasingly clear that greenhouse gas or climate neutrality by mid-century will not be achieved without large-scale capture, utilisation and, above all, long-term storage of CO2. 

At the same time, the German Federal Ministry of Economics and Climate Protection (BMWK) published the German government’s evaluation report on the Carbon Dioxide Storage Act (KSpG) in December 2022. The KSpG came into force in August 2012 and was intended to test the first demonstration projects for the long-term storage of CO2 in the ground in Germany. Acceptance of CO2 storage in Germany has always been very low in the past, especially as the discourse was strongly linked to the use of CO2 capture at coal-fired power plants and the continued operation of coal power plants. However, by the end of the application deadline for approval of new underground CO2 storage facilities (end of 2016), only one demonstration project had been applied for and been built in Germany. Since no new applications can be submitted after the end of 2016, underground CO2 storage is de facto not possible throughout Germany.

CO2 capture for residual emissions in industry

In the future, the use of CCS at coal-fired power plants in Germany is not expected to play a role due to the planned phase-out of coal. Capture, utilisation or storage of CO2 will however be needed primarily for a climate-neutral industry. Even after the use of renewable energies or electrification, large quantities of process-related CO2 emissions will still be produced, for example in the lime and cement industries or in the steel industry. Carbon is also the starting point for many other important products in the chemical industry and is therefore also needed as a raw material. The long-term scenarios project assumes that around 30 million metric tons of CO2 will have to be captured, transported, reused or disposed of in final storage by industrial plants in Germany even after climate neutrality has been achieved in 2045. Possible locations of capture plants and transport pipelines for CO2 are shown in Figure 2. 

Figure 2: Possible CO2 sinks, sources and transport pipelines in Germany in 2045 (source: Langfristszenarien)

Here, it is noticeable that clusters of CCU/S sites are located in the core areas of German basic and heavy industry. This clustering is mainly due to economic economies of scale for infrastructures for capture, transport but also the potential reuse of CO2. Accordingly, the focus of the German Carbon Management Strategy will be primarily on the industrial sector and not on capture in coal-fired power generation.

In addition to the capture of CO2 at industrial sources, however, the use of carbon removal solutions, i.e., the physical removal of CO2 emissions from the atmosphere, must also be developed. Carbon removal is the only way to offset the greenhouse gas emissions that will continue to occur in 2045, for example from agriculture. At 45-80 million metric tons of CO2, the negative emissions required are actually at a higher level than CO2 emissions to be captured from industrial processes. We have presented the details here and here.

Key principles of the German carbon management strategy

The use of CCU/S in industry will play a role as a decarbonisation option, alongside energy and resource efficiency and the use of green energy sources and electrification of processes. Key findings from the latest climate neutrality studies for Germany (Klimaneutrales Deutschland 2045, Klimapfade 2.0, dena-Leitstudie Aufbruch Klimaneutralität, Langfristszenarien) allow the following assessments:

  • Increase in ambition level of climate targets leads to increased use of CCU/S
  • CO2 capture in the million metric ton range necessary as early as 2030
  • Use of CCS mainly in industry and waste sector
  • Negative emissions from carbon dioxide removal must be scaled up from 2030 at the latest
  • Permanence of CO2 removal and storage by nature-based methods is uncertain and therefore makes technical solutions necessary as well
  • Fossil CCU/S and technical carbon dioxide removal can use the same infrastructures and should be considered in an integrated way
  • Transparent and continuous dialogue needed to ensure societal acceptance for ramp-up of CCU/S
  • Significant amounts of CO2 capture at global level (6-12 Gt/year depending on scenario) also driven by CCS at fossil power plants 

The recently published evaluation report on the KSpG provides the following key recommendations to the German government for revision: Examination and adjustment of regulations of the (cross-border) transport of CO2 and regarding German final storage sites for CO2, the further integration of CCU/S into the European Emissions Trading System (EU ETS), and the development of a clear framework for accounting of negative emissions. The details are to be elaborated in a German Carbon Management Strategy (Figure 3) by the German government, which will be presented during 2023. 

Figure 3: Basic pillars for carbon management in Germany (source: German government, adjusted by carboneer).

Which issues need to be clarified?

The German Carbon Management Strategy first aims to spell out a prioritisation of CCU/S applications. Questions must be answered for which industries and which emissions CCU/S measures are most important in order to use available resources in an appropriate manner. This should go hand in hand with the adaptation of the relevant regulatory framework, for example for approval procedures and the development and financing of (transport) infrastructures. Measures and funding programs in special application areas are also to be developed.

Methodologies for monitoring, reporting and verification (MRV) for CCU/S need to be developed. For example, the accounting of CCU/S in the EU ETS and the accounting for the use of CO2 from different sources (fossil, industrial cycle, biogenic, from the atmosphere) in the chemical industry and in the production of synthetic fuels must be clarified.

In particular, the possibility of transboundary CO2 transport will play a major role across the EU. In this regard, the Norwegian government has already made offers to the EU industry for accommodating their CO2 in underground storages in Norway. The design of pipeline and ship capacities as well as questions of EU network regulation and financing are important issues. The synergy effects of CCU/S clusters between industries as sources and sinks of CO2 must be elicited to find the most efficient solutions when planning infrastructures.

For possible CO2 storage facilities to become a reality also on German territory (probably rather under the seabed than under the mainland), social acceptance for CO2 capture and final storage must be built up. This can only happen through clear and transparent communication regarding the necessity of CCU/S for a climate neutral Europe and Germany.  

We will keep you up to date on the latest developments regarding the German Carbon Management Strategy. Please feel free to contact us if you have any questions on this topic.

What is the potential for negative emission technologies in Germany?

/by

The updated German climate law requires negative emissions technologies (NETs) and carbon removal from the atmosphere (read all about that in our previous article). Here we want to answer the question, which of the solutions could be used in Germany and what their potential might be. The main take-away: Nature-based and technological carbon removal solutions will both be necessary at the Megatonne scale.

New studies confirm need for carbon removal

Two new reports that model pathways of how Germany can achieve climate neutrality by 2045 have been published in October 2021. The dena-Leitstudie “Towards Climate Neutrality” by the German Energy Agency and the Ariadne report as part of the Kopernikus Project funded by the German Ministry of Education and Research both make clear that substantial amounts of negative emissions are required to balance certain land use, agricultural or industrial emissions. Figure 1 extends our findings about how much annual negative emissions will be needed in Germany in 2045 including the data from the latest studies.

Figure 1: Required annual negative emissions in Mt CO2-eq in 2045 in Germany (source: cr.hub)

Generally, the latest numbers are similar to those from earlier studies. However the various studies still disagree on how much carbon Germany needs to remove from the atmosphere by a large margin. The resulting figures range between 40 and 100 Mt CO2-eq. The average between all studies points at annual carbon removal needs of a bit over 74 Mt CO2-eq at the point where Germany wants to be climate neutral.

Not only the scientific community alone is stressing the need of negative emissions, but increasingly industry groups and associations take the issue seriously. In a recent open letter to the new federal government a range of large corporations under the Stiftung 2 Grad stressed the need for developing a political framework for actively managing the carbon cycle and start developing solutions for capturing CO2 from industrial facilities and storing it underground (CCS).

Which negative emissions technologies are needed?

Broadly we can differentiate between nature-based carbon removal solutions and technological ones. The predominant nature-based solutions is re-, and afforestation, but also the renaturation of peatlands, the enhanced sequestration of carbon in soils through different agricultural practices or growing kelp in the sea fall into that category.

On the technological side, the main focus currently lies on DACCS (direct air capture and storage). Of course also hybrid solutions exist, such as BECCS (bioenergy with carbon capture and storage) or the production biochar which uses biomass and utilizes a technical process to sequester or bind the carbon in a non-reactive form.

We explain and compare a range of those NETs here. Figure 2 shows which of the various NETs are being foreseen to help Germany to achieve climate neutrality by 2045 based on selected studies. The answer to the question which NETs and carbon removal solutions are needed is simple: all of them!

Figure 2: Comparison of annual carbon removal capacity in MtCO2-eq of different NETs in recent reports for Germany in 2045 (source: cr.hub)

The different nature-based solutions are summarized into the land use, land use change and forestry (LULUCF) category in Figure 2, which takes up the largest share of necessary carbon removal in most studies and in many cases is not split up into more detailed removal pathways and sinks in the studies.

In addition, most studies foresee the need for substantial technical removals via BECCS and DACCS. Especially in case the nature-based solutions would not be able to deliver the large CO2-capturing capacities, technological solutions are required.

More exotic carbon removal solutions such as enhanced weathering do not feature prominently. The usage of carbon dioxide from the atmosphere as feedstock for green naphtha or methanol production and in long-lived plastic products goes into the 10 MtCO2-eq range. It is worth noting that the different studies do not necessarily agree on the potential or capacity of the different NETs. This is also due to the fact that not all studies consider the entire range of possible NETs or focus on specific technologies or sinks.

And just as a reminder: In 2018 the LULUCF sector in Germany only delivered 18 MtCO2-eq of negative emissions (source: dena). That means within the next 23 years a doubling to tripling of the annual carbon removal capacity through forests, swamp renaturation and soil carbon sequestration needs to be achieved. Otherwise the reliance on technological solutions that are as of now not scaled-up will be even higher.  

Negative emission potential in Germany

As seen above, a silver bullet or one NET to take out the excess carbon to make Germany truly climate neutral by 2045 does not exist. Much more, all solutions and technologies will be needed. To give a better overview of how such a carbon removal portfolio on the country level can look like, we used the numbers from the Ariadne project report and compared the potentials across the different NETs. Figure 3 shows the shares of different NETs in Germany in 2045 according to the report of the Ariadne project with a total potential of almost 110 MtCO2-eq.

Figure 3: Potential share of different NETs in Germany by 2045 according to the Ariadne project, light green wedge represent LULUCF (source: cr.hub)

The light green wedge taking 46 per cent of the total carbon removal potential represents the LULUCF sector, which can then further be split into re-and afforestation, soil carbon sequestration and carbon storage through changed agricultural practices such as agroforestry. Technological solutions such as BECCS and DACCS make up 37 per cent of the entire carbon removal potential, whereas biochar and enhanced weathering add up 17 per cent in total.

The way forward

The most recent results from climate and energy system modeling from a variety of different research groups are clear: Carbon removal from the atmosphere will be important for Germany to reach its climate targets. In 2045 the capacity to remove 10 per cent of the greenhouse gas emissions Germany emitted in 2020 from the atmosphere has to be in place.

That is not an easy feat, especially considering that carbon removal from the LULUCF sector today only has the capacity of providing a fifth to a quarter of the required negative emission capacity. In addition, climate change might impede the carbon storage capacity of nature-based solutions further during the coming decades. If natural carbon sinks cannot deliver, then technical or hybrid carbon removal solutions such as BECCS, DACCS or biochar become more relevant.

The most recent studies under consideration in this article arrive at different carbon removal capacity and needs for different NETs, as figure 2 demonstrates. Starting a structured conversation about how the recent reports arrive at their negative emission capacity for different technologies would be important. In that way science can develop an understanding about assumptions and the potential for an integral negative emissions modeling framework.

At the political level, devising a framework for active carbon management alongside capacity building measures and restarting a public dialogue on carbon removal and CO2-storage as necessary and important parts towards climate neutrality are the most important steps. Furthermore, a process on revising current regulations on CO2-storage and -transport, possibly across borders in a European context has to start. German climate targets should accommodate the differences between genuine emission reduction and carbon removal (as already being started in the UK and Sweden).

The take-away for the private sector: A new industry is forming and it needs to be scaled rapidly. Forward-looking companies and industries can be on the forefront of that development if they seize the opportunity. This holds for technology providers, project developers and emitting industries that can provide and utilise NETs. However, also companies with climate targets can demonstrate more credible climate action by neutralizing part of their difficult-to-abate emissions via negative emissions or carbon removal credits instead using less permanent and less credible offsetting projects.

We can help you to develop strategies concerning your climate targets and the role of negative emissions and provide you with insights into this new sector and market. Feel free to reach out for further discussions.

New German climate goal only possible with negative emissions?

/by

Following the ruling of the Federal Constitutional Court in April 2021, the German government had to revise the Climate Protection Act. According to the revised law, Germany must be climate neutral as early as 2045 and greenhouse gas negative by 2050. These higher climate ambitions also mean earlier use of significant amounts of negative emissions. What changes have there been in climate legislation and what do the latest scenarios on carbon removal say for Germany?

As promised in our article on the global dimensions for negative emissions, this time around, we want to have a closer look at Germany. The country is touted for being one of the leaders in decarbonizing the energy system of an industrialised country both in terms of speed and scope. Renewable energies already make up 45 to 50 per cent of Germany’s electricity consumption with a goal to reach 65 per cent in 2030. 

Updated climate target requires climate neutrality by 2045

The German climate law has been revised in June 2021, after the Federal Constitutional Court required changes and more ambitious action. As a result the current government updated the country’s climate goals with an increased ambition towards climate or greenhouse gas neutrality by 2045. From 2050 onwards Germany is supposed to be greenhouse gas negative. Figure 1 depicts Germany’s historical emissions, the targets stipulated in the new law and potential negative emissions in 2050 according to the study Klimaneutrales Deutschland 2045 (Climate neutral Germany 2045) (data sources: BMU, UBA, Agora Energiewende).

Figure 1: Historic greenhouse gas emissions and targets for Germany in Mt CO2eq according to the new climate law and estimates for negative emissions by Agora Energiewende (source: cr.hub)

For 2021, Agora Energiewende expects the strongest annual increase in emissions since 1990, with a plus of almost 50 Mt (source: Agora Energiewende). This means that emissions this year could be back at the level of 2019 before Corona. The emission reduction of 40 per cent compared to 1990, which the country managed to achieve in 2020, would then be obsolete again.  

Are negative emissions part of the German climate strategy? 

A few years ago negative emissions or CCS were not part of the discussion concerning the climate and emissions reduction strategy in Germany, at least not on the policy level and only partially in the scientific context. This outlook changed:

  1. It is increasingly clear that emissions of greenhouse gases will remain in hard-to-abate sectors (such as industry and agriculture) even after strong emission reductions. 
  2. The current efforts of decarbonizing sectors other than the electricity sector, specifically buildings and transport is lagging behind and might not deliver the emissions reductions needed to even achieve the older and less ambitious climate targets. 
  3. Climate ambitions grew as the impact of a warming planet is already clearly visible and civil society demands more action. On the EU level the new target of 55 per cent emission reductions by 2030 compared to 1990 has been agreed on, and Germany followed suite with its new climate law.

Therefore negative emissions are more prominent in recent scenarios and studies on how Germany might be able to achieve its climate targets. On the policy level, they are only implicitly mentioned in the new climate law in terms of negative emissions in the Land Use, Land-Use Change and Forestry (LULUCF) sector. Concrete expansion targets for technologies that generate negative emissions are still lacking.

How much negative emissions does Germany need?

In this analysis we present and compare the results and implications of three detailed studies released during the past three months: the study Klimaneutrales Deutschland 2045 (Climate neutral Germany 2045) by Agora Energiewende, the outcomes of the Fraunhofer ISI project Langfristszenarien für die Transformation des Energiesystems in Deutschland (Long-term scenarios for the transformation of the energy system in Germany) commissioned by the German Ministry for Economic Affairs and the working paper Wissensstand zu CO2-Entnahmen (Knowledge base on CO2-removals) by the Mercator Research Institute on Global Commons and Climate Change (MCC). 

Based on those three publications, figure 2 depicts the projected needs for negative emissions in Germany. All of the studies agree that negative emissions in the order of several ten to hundred millions of tons CO2eq will be needed in Germany by 2050 to achieve the country’s climate targets.

Figure 2: Amount of negative emissions including LULUCF sector needed in Germany from 2030 onwards in Mt CO2eq (missing numbers in studies have been linearly interpolated) (source: cr.hub)

According to current estimates Germany emitted about 740 Mt of greenhouse gases in 2020. As figure 2 shows, the negative emissions necessary by the time Germany wants to reach climate neutrality (2045) range from 67 to 100 Mt CO2eq, so 9 to 13 per cent of 2020’s emissions. Scaling-up nature-based and technological solutions and technologies is already required starting today and in this decade. At present, the use of technologies to remove CO2 from the atmosphere is comparatively expensive. Reducing these costs requires massive investments in technical and organisational infrastructure, and comprehensive political and economic support.

To some extent the new German climate law takes into account negative emissions and aims at a contribution of LULUCF sector of 25, 35 and 40 Mt in 2030, 2040 and 2045, respectively. However, land-use and forestry related carbon removal suffer from low permanence, tricky accounting and potential reversibility through misaligned management practices or natural events such as wildfires.

Thus, in addition to negative emission from the LULUCF sector as part of nature-based carbon removal solutions, technological removals will be needed as well according to all of the three studies. In a coming article we will dive deeper into the proposed kinds of negative emissions solutions for achieving Germany’s climate targets and the potential of some of those solutions. 

To learn more about carbon removal and how it can play a role for your company’s climate strategy, follow us on Twitter or LinkedIn, subscribe to our newsletter or directly get in touch with us.

How much carbon do we need to take out of the atmosphere? Current global scenarios

/by

Net zero targets are taking centre stage in climate policy and action. Depending on the speed of emissions reductions in the coming years and the ambition level of climate goals, negative emissions and thus carbon removal from the atmosphere will be instrumental for achieving those targets. To get a better picture of the scale required we dig into the latest global reports on Net Zero scenarios. 

Net Zero terminology

Even after aggressive emission reduction have taken place, residual emissions might still occur. Greenhouse gases must then be actively removed from the atmosphere in order to further reduce emissions on balance. A country or organisation achieves net zero emissions or climate neutrality when the amount of emissions removed reaches that of the residual emissions, i.e. when no more greenhouse gases are released into the atmosphere on balance. Emissions removed from the atmosphere are also called negative emissions. Various negative emissions technologies exist, which today mainly focus on the removal of CO2 as the most important greenhouse gas from the atmosphere, hence the focus on carbon removal.

Here it is necessary to differentiate between carbon removal, carbon capture and storage (CCS) and carbon capture and use or utilisation (CCU). CCS prevents emission from fossil fuels from entering the atmosphere in the first place, but does not remove any emissions from the atmosphere. In that respect it is not a negative emissions technology or solution. CCU refers to the use of captured CO2 in the production of fuels or other products. If a particular CCU process and product actually leads to negative emissions or not depends on where the captured CO2 comes from and on the life-time of the product in question. Figure 1 explains the difference between carbon removal, CCU and CCS.

Figure 1: Differences between Carbon Removal, CCU and CCS (source: cr.hub)

Clearly, terminology is important when it comes to setting and specifically achieving credible Net Zero targets or climate strategies as well as when evaluating Net Zero claims or scenarios.

Assessing global scenarios

Given the vast amount of global climate scenarios and modeling exercises we only focus on a few of them in the following. Figure 2 shows an exemplary emission pathway for achieving 1.5°C, while at the same time showing traditional mitigation technologies, such as renewables and energy efficiency and carbon removal separately. The figure is based on data from the Network for Greening the Financial System (NGFS) climate scenarios for central banks and supervisory authorities.

Figure 2: Necessary order of magnitude for carbon removal for emission paths of 1.5 °C (source: cr.hub)

In order to widen the scope of the analysis and to reduce the risk of looking in only one direction, we included scenarios of five different organisations:

The International Energy Agency’s (IEA) Net Zero by 2050 Roadmap, the Consultation Paper Reaching climate objectives: the role of carbon dioxide removals by the Energy Transitions Commission (ETC), the Special report: Global warming of 1.5°C of the Intergovernmental Panel on Climate Change (IPCC), McKinsey’s Climate math: What a 1.5-degree pathway would take and NGFS’s Climate scenarios. A few numbers on the relevant amount of negative emissions has been distilled from the report The case for Negative Emissions by the Coalition for Negative Emissions. We are aware that this selection only captures part of the available literature.

All scenarios considered aim to keep the temperature increase below 1.5 °C compared to pre-industrial levels. Still, comparing scenarios and studies is difficult due to different assumptions on which part of the economy and thus which emissions are included in the scenario or what exactly qualifies as carbon removal and what does not. In addition, the probabilities in keeping below a certain temperature threshold differ between scenarios and studies.

All of the above shows that increasing attention needs to be paid to making modeling and scenario assumptions for Net Zero as clear as possible in order to understand the implications of the scenario outcomes. 

Rapid scale-up of carbon removal needed

What do the scenarios have in common?

Emission reductions from large-scale deployment of renewables and electrification of large parts of the industrial and transport sectors are included in all scenarios. Yet, all scenarios agree that there is a significant need for negative emissions in the gigatonnes (Gt CO2eq) range to achieve the 1.5°C climate target, as Figure 3 shows (data sources: Coalition for Negative Emissions, IEA).

Also, carbon removal technologies have to be available on a large-scale basis already during this decade and reach the Gt level by about 2030 from a very low level today. Given today’s greenhouse gas emissions of almost 50 Gt per year, the removals needed according to the five scenarios in 2050 amount to about 5 to 20 per cent of current global emissions. This is a stark reminder that negative emission technologies are not marginal implementations and potential fixes on the race to Net Zero, but important requirements to deal with residual emissions in laggard and hard-to-abate sectors.

Where do the numbers disagree and why?

On the upper end are the high range numbers of the ETC and the IPCC with up to 10 GtCO2eq of carbon removal by mid-century, while the IEA’s Net Zero Roadmap features on the lower end with an expected need of 2.4 Gt of negative emissions by 2050. The IEA foresees a total capture of 7.6 Gt including CCS and CCU. However, removals from the atmosphere make up only about 30 per cent of those. Also, the scenario assumption of the IEA include no new investments into unabated coal power plants and new oil and gas fields or coal mines from 2021 onwards, as well as the phase-out of unabated coal power globally by 2030. The level of ambition for classical mitigation strategies is very high here compared to the other four scenarios.

Figure 3: Required negative emissions for 1.5°C climate targets according to different scenarios in Gt CO2eq/year (source: cr.hub)

If a medium pathway such as in the NGFS or McKinsey scenarios is taken seriously, that means that negative emission technologies (NETs) need to be scaled up rapidly within the coming decades to achieve a removal potential in the Gt scale. A scale-up of at least 50 times from the present days is needed for that according to The case for Negative Emissions report. Especially as the current pipeline for carbon removal projects including Natural Climate Solutions, Bioenergy with CCS and Direct-Air-Capture until 2025 only stands at about 0.15 Gt (source: Coalition for Negative Emissions).

Implications for policy

To achieve net zero by 2050 while keeping global temperature below 1.5°C will require unprecedented efforts and are seemingly not plausible any longer without large-scale utilisation of carbon removal. Indeed, even many 2-degree pathways hinge on negative emissions although on a lower level, especially if international climate action falls short of more ambitious action (source: Minx, et. al., Fuss et. al.).

This leaves policy makers with many questions, such as:

  • Which ways exist to integrate carbon removal in climate policy?
  • What is the interaction between emission reduction and removal policy?
  • How to scale-up NETs and innovation in the sector?
  • Where to focus investments and resources?
  • How to implement carbon removal credits and how to integrate them into the emission trading systems such as the EU ETS?

On the EU-level the first initiatives are on their way to support carbon removal, such as the Negative Emissions Platform and the European Commission wants to propose a robust carbon removal certification system by 2023. In addition, research and innovation on carbon removal are being funded by Horizon 2020 and the follow-up program Horizon Europe. The Innovation Fund, which receives 10 billion EUR from the income of the EU Emission Trading System, includes the commercial demonstration of low-carbon technologies, such as carbon removal and CCS into its framework. 

As an example of how increased climate ambition leads to negative emissions is the case of the German new climate law. In a forthcoming article, we will have a closer look at the need for carbon removal in Germany’s road to greenhouse gas neutrality.

How is the industry preparing?

For the private sector, especially for corporations and companies that set climate targets and aim to go for their own net zero goals, the complexity of the discussion rises. Internationally acknowledged standards of setting climate targets and the role removals and reduction play within those such as the Net Zero Standard by the Science Based Targets initiative will be of great importance (source: SBTi).

Industry-led initiatives on voluntary carbon markets such as the Taskforce for Scaling Voluntary Carbon Markets (TSVCM), where cr.hub is part of the consultation group are needed as well to drive the demand and market. The TSVCM just launched their report of Phase II of implementing an industry-wide carbon market. However it is important that only high-quality removals feature in those industry-led initiatives in order to achieve real climate benefits. The discussion of what a high-quality removal actually entails, is a story for another time. We will come back to that in further articles.

In conclusion it becomes clear thatmany players and organisations are taking carbon removal and negative emissions now much more seriously in their climate and energy modelling scenarios and as a potential tool for reaching net zero targets. In addition, NETs have to be scaled dramatically in order to achieve the required removal potential.

Get in touch with us to learn more or subscribe to our newsletter.

Carbon. Removal. Accelerated.

/by

With this motto, our goal is to counter climate change also with carbon removal and negative emissions. carboneer guides your company through carbon markets, negative emissions and climate strategies.

But first things first: 

What is Carbon Removal and how does taking CO2-emissions out of the atmosphere relate to global climate goals?

CO2-emissions back at pre-Corona levels

Looking back at the past year, the Corona pandemic will probably be the most remembered thing of 2020. And in the public perception, the pandemic and its effects seem to have displaced climate change as the biggest challenge.

As a result, global energy-related CO2-emissions also fell by about 6 percent in 2020 compared to 2019. Due in particular to lockdown restrictions and the economic crisis, energy-related emissions fell by more than 2 gigatons in 2020 to just over 30 gigatons. No one expected such a drop in emissions in early 2020. In fact, some countries, such as Germany only achieved their climate targets as a result of the Corona crisis. Otherwise emissions would not have dropped that much. 

However, a look at the latest figures and statistics reveals that energy-related CO2-emissions have been back at the previous year’s level since December 2020 and could end up just 1 % below pre-Corona emissions of 2019 during 2021. 

Carbon Removal essential for climate goals

Let’s leave 2020 and 2021 behind for a moment and look at how CO2-emissions would have to develop to meet the Paris Climate Agreement’s 1.5 or 2 degree target. For that to happen, carbon emissions would have to decline globally by about the same factor (3-7 percent) each year for the next few decades as they did during the Corona pandemic.   

However, based on the most current plans of the various countries regarding their climate targets (Nationally Determined Contributions), it is more likely that the overall decrease in emissions will be no more than 2 percent by 2030 compared to today. This corresponds to a temperature increase of 2.4 ˚C from pre-industrial levels. Because of these realities, the discussion about large-scale atmospheric removal of CO2 through negative emission technologies is gaining momentum. 

Necessary order of magnitude for carbon removal for an emission path of 2 °C (Data source: NGFS (Network for Greening the Financial System) Scenario Explorer. Model: REMIND-MAgPIE 1.7-3.0; provided by IIASA)

Carbon Removal solutions need support

All solutions are needed in the fight against climate change, from emission savings and reductions to the removal of greenhouse gases from the atmosphere. For a process or technology to be considered carbon removal, four conditions must be met:

  1. CO2 is physically removed from the atmosphere.
  2. the removed CO2 is permanently stored outside the atmosphere.
  3. emissions generated during the process are included in the overall balance.
  4. emissions generated during the process are less than the negative emissions produced.

However, scaling and application of the various nature-based and technological solutions to remove carbon dioxide from the atmosphere are still in their infancy.

Selected negative emission technologies

Based on scientific research from the IPCC reports, these negative emission technologies will need to remove and permanently store several gigatons of CO2 per year from the atmosphere over the coming years and decades. This is roughly equivalent in magnitude to the decline in CO2-emissions caused by the Corona pandemic, the largest economic collapse since the 1930s. 

 

carboneer: the experts on CO2 markets and negative emissions

Against this background, Simon Göß and Hendrik Schuldt founded carboneer.

Our expertise covers mandatory carbon markets and negative emissions. Through our consulting services (link) we help companies to understand the complexity of carbon markets, to meet the legal requirements and to successfully use negative emissions for the company’s climate strategy. 

Feel free to contact us with your questions.

Let’s take the next step towards solving the climate crisis together.

Your team from carboneer.