In off-the-record discussions, numerous industry experts have expressed concerns that the proliferation of carbon removal firms is untenable, with an inevitability of a significant proportion fading away over time. The sector’s rise is largely due to increasing research suggesting extensive carbon removal is required to curtail escalating temperatures. Some projections even suggest that by 2050, countries may need to extract 10 billion tons of CO2 annually to prevent temperatures rising above 2°C or to reduce it to safer levels.
Furthermore, numerous corporations are seeking methods to honor their carbon neutrality commitments. For now, several enterprises are prepared to incur the steep current costs for carbon removal in an effort to help scale the sector. Companies like Microsoft and those associated with the billion-dollar Frontier program are part of this trend.
Currently, the demand from businesses for reliable carbon capture exceeds supply. The availability of direct-air-capture plants is limited, and the construction process for these facilities can take years. In addition, companies are still experimenting and scaling up other methods such as burying biochar or injecting bio-oil deep below the Earth’s surface.
While costs are likely to decrease over time, sustainable carbon extraction will always be a pricy endeavor. The number of companies willing to bear these costs will always have a limit. Therefore, as carbon removal facilities begin to meet business demand, government support will become increasingly important for maintaining the sector’s viability. This could involve creating carbon trading markets, instating pollution mandates, setting fuel standards, or implementing other measures.
It can be reasonably predicted that nations will persist in providing more incentives or imposing stricter regulations to sustain the sector. Notably, the European Commission is crafting a system for accrediting carbon removal, which may permit countries to employ a variety of tactics to achieve the EU’s 2050 carbon neutrality target. However, it is uncertain whether government support will increase at the rate investors anticipate or start-ups require.
In fact, some suggest the idea that nations will finance high-quality carbon removal on a large scale is a “fantasy”. To put this into perspective, a report by DCVC highlights that the removal of 100 billion tons of CO2 at a cost of $100 per ton would total $10 trillion, which is more than a tenth of the world’s GDP.
