In this report, we assess the current state of affairs surrounding technological carbon dioxide removal (CDR)—sometimes referred to as “engineered” CDR or negative emissions technologies (NETs)—in the United States.
Interest in technological approaches to CDR among people concerned about climate change and those who want to make money from climate solutions is skyrocketing. A number of new companies have moved forward rapidly with CDR technologies to help meet global climate policy goals, including the benchmark set in the 2015 Paris Agreement, which aims to keep global warming below 2˚C.
Yet, uncertainty continues about how much of a role technological CDR will play in helping to solve climate change in the medium to long term. It is clear that CDR technological advances are crucial to reaching the United States’ and the world’s climate goals, but research, discussions and investment are still at early stages. Despite progress in CDR technologies and their long-term promise, investor appetite remains cautious due to a variety of risks, and as a result, companies have yet to scale up.
Given the nascent state of the industry and the urgency to decarbonize in the next few decades, policymakers should help accelerate momentum on technological CDR to fully bring it into the mainstream. Public investment is needed not only to mobilize private investment, but also to ensure the data generated from pilot deployments are publicly available to researchers, fostering further innovation.
To take advantage of the current environment, the U.S. government has a suite of options at its disposal to help meet climate goals and foster the commerciality of CDR.
POLICY RECOMMENDATIONS
To take advantage of the current environment, the U.S. government could do the following to help meet U.S. climate goals and foster the commerciality of CDR:
- Extend the 45Q tax credit beyond January 1, 2024 to broaden the number of actors that can apply for the credit.
- Develop standards and safeguards for industry and government to follow.
- Invest in continued research, development, and demonstration of CDR technologies so they can be deployed as soon as possible.
- Collaborate with industry.
- Stimulate innovation by developing a prize competition.
- Government procurement of products that are made with CO2.
- Establish a federal price on carbon, whether through a carbon tax, carbon fee and dividend, or cap-and-trade system.
- Provide tax credits for midstream infrastructure products so CO2 can be transported from where it is captured to demand centers.
- Collaborate with other countries to share critical technology and expertise with them, particularly emerging markets where dependence on fossil fuels is growing.
- The U.S. government should work within the UNFCCC to elevate CDR technology within the Paris process.
