The 10 Commandments of CDR
RC #3: You must always come back to the pleasant fact that there are only ten of 'em (Introduction, Part III)
If scaling climate tech is the Wild West, then scaling CDR might be something like the Matrix. What’s real? What’s not? Do we take the nature-based pill or the engineered pill? Will Keanu Reeves help catalyze a robust market by purchasing durable carbon removal? Hey, you never know.
So far we’ve looked at my reasoning for exploring CDR and my philosophy on scaling climate tech. To finish off this three-part introduction to Renaissance Carbon, I’d like to dive into my philosophy on scaling CDR. Without further ado, here are my 10 Commandments of CDR.
Thou shalt not focus too much on DAC.
When the general public (along with most of the climate tech community) hears “carbon removal,” they may think of giant fans. At first glance, there’s nothing wrong with this. Direct air capture has received by far the most public funding of any CDR method in the US, its MRV is straightforward, and it’s essentially permanent. But at second glance, I start having some serious questions. What if public funding dries up? What if we don’t fall down the cost curve as quickly as we expect to? What if there’s a scandal or accident that sours public opinion? A wide range of things could lead to a DAC bubble that if popped, could damage prospects for all CDR methods. Even if all goes according to plan, we must be careful about advertising a DAC market in the many hundreds of billions annually. The general public will rightfully ask: How are we going to pay for this? We must expand our CDR focus beyond giant fans, not just for the CDR community, but for everyone.
Thou shalt not cast stones at DAC, either.
All this is not to say that DAC has no place in the CDR landscape. It does. But before it contributes significantly to our emissions removal efforts, it should at least attempt to contribute to our emissions reduction efforts. There are a variety of valuable products that could use CO2 from DAC as a feedstock, from fuels like methanol and liquified natural gas to materials like plastic and concrete. These have a (sometimes significant) green premium at first, but the existence of tangible outputs from DAC should aid us on our way down the cost curve. Once costs to capture and durably store CO2 using DAC fall, then it may be more feasible to scale more CDR-specific DAC facilities.
Thou shalt emphasize CDR methods with viable revenue streams beyond carbon credits.
At the very core of it, this is what I hope to focus on with Renaissance Carbon. Even if we can reach the mythical $100 per ton of CO2 removed in the long run, we’ll be putting around a trillion dollars per year into CDR. In some wealthy progressive countries, this may fly. In the US, it will not (and it doesn’t matter who’s President). If we want to have any chance at building a CDR industry capable of counterbalancing hard-to-abate emissions and removing legacy emissions, the US must be front and center. Despite the American focus on DAC so far, other methods with more clear value-adds will need to step up. This means using enhanced rock weathering and biochar to increase crop yields in the Heartland, using mineralization and durable wood products to construct buildings in the cities, and using carbon-negative cement to build the infrastructure that connects it all. The key word here? Use. If we’re not using the removed carbon in some way, then the general public will once again rightfully ask: How are we going to pay for this?
Thou shalt not rely upon the voluntary carbon market to build a gigaton-scale CDR industry.
This emphasis on methods with clear economic benefits beyond their CDR attributes should also protect us from overexposure to a voluntary carbon market that may not fully materialize. We still see carbon credits ranging from $1000 per ton for removal to $30 per ton for reduction. Most have grown properly skeptical of avoidance credits, but there’s still not much to stop prospective greenwashers from just finding the lowest bidders and claiming carbon neutrality. One way to at least partially address this is to have a market that’s exclusively used for durable carbon removal. Another way is to create a compliance market, which jurisdictions like the EU may actually do. But to echo the sentiment of Commandment 3, pigs will fly before the US implements a national CDR compliance market. Watching companies flock from California to Texas is one thing. Watching companies ditch the US altogether is another.
Thou shalt not forget about lifecycle emissions.
A DAC plant (or any CDR facility, for that matter) is not serving its intended purpose unless it uses 100 percent clean power. And even if it does, we still live in a time when that clean power could be used to decarbonize the grid in general. But to meet the challenge of scaling to the multi-gigaton CDR industry we need, we must make that sacrifice and divert power toward CDR at a (relatively) small scale now so that we can build these facilities at a large scale later. Ultimately, impactful CDR industries will rely upon our having significantly more clean power than we need to run our world sans carbon removal. Lifecycle emissions go beyond using clean power, too. For example, any feedstock required for CDR should be transported via low-carbon methods over as short of distances as possible.
Thou shalt not compare CDR to waste management.
Trash smells bad and is unsanitary. Atmospheric CO2 does not and is not. We can’t expect these markets to operate similarly at all. Enough said.
Thou shalt not mistake CCUS for CDR.
I see this a lot in Houston, and I’m sure it’s a common mix-up in other traditional energy cities, too. Here in the energy capital, it goes without saying that carbon capture, utilization, and storage will play a key role in decarbonizing carbon-intensive sectors like power generation and steel manufacturing. But it’s also worth noting that CCUS isn’t CDR. According to the State of CDR report, an activity must satisfy three conditions to be considered CDR:
A) The CO2 captured must come from the atmosphere.
B) The subsequent storage must be durable, such that CO2 is not soon reintroduced to the atmosphere.
C) The removal must be a result of human intervention, additional to the Earth’s natural processes.
CDR methods like DAC may be used for things like sustainable aviation fuel production, which falls under the broad umbrella of CCUS (it breaks the durability condition above, as SAF re-releases CO2 back into the atmosphere and is therefore carbon-neutral at best). If SAF successfully scales, though, then DAC costs may fall enough so that DAC becomes a widely attractive option for pure play CDR.
Honor thy market-pull mechanisms.
The market-pull Holy Grail is the further expansion of 45Q in the US even beyond the expansion in the Inflation Reduction Act. Senators Michael Bennet (D-CO) and Lisa Murkowski (R-AK) introduced a bipartisan bill in the US Senate last month that would do just that by expanding tax credits for carbon removal to be tech-neutral instead of focusing on DAC. The 118th Congress wraps up in the coming weeks, so we must be ready to reintroduce similar legislation in the 119th. And I’m no clairvoyant, but I’m going to guess that CDR policy will make more headway at the state level than the federal level over the next four years (or at least the next two).
Honor thy subnational policy mechanisms.
As mentioned above, it is crucial for subnational jurisdictions to set policy for CDR, too. State incentives can in some cases be stacked with federal incentives, like the low-carbon fuel standards in California, Oregon, and Washington with 45Q. In addition, states and provinces (and smaller jurisdictions, like municipalities) can set their policy to be more attuned to the local economy, politics, and geography. Regardless of how subnational CDR policy shakes out in the coming years and decades, I can tell you one thing: It will not look the same in places like Texas as it does in places like California, and that’s okay.
Thou shalt not covet funding for emissions reductions.
In an ideal world, we could meet our climate goals without any CDR at all, but we no longer live in that ideal world. However, we can still get a significant portion of the way there with emissions reductions, rather than removals, by 1) electrifying transportation, 2) shifting to clean energy sources, 3) manufacturing low-carbon materials, and 4) decarbonizing our existing agricultural practices to the greatest extent we economically can. The emissions from some sectors may be difficult or costly enough to abate that we’re better off pursuing CDR to reach net-zero. We’re not sure yet, but this could include anything from maritime shipping and aviation fuel to cement production and steel manufacturing. And in the long-term, depending on how far we overshoot our temperature goals, we will likely need to reach net-negative emissions.
In the ideal world of the future, we will hopefully not need too much CDR to keep a relatively stable climate. But one thing seems more and more likely all the time. We’ll need the nature-based pill, the engineered pill, and everything in between.
Disclaimer: The opinions expressed in Renaissance Carbon are my own and do not necessarily reflect the opinions of any employer.