Carbon manage­ment and negative emissions: The European perspective

What potential do negative emissions have? What role should and can they play in climate protec­tion? How do we deal with possible risks? In two expert discus­sions moderated by Felix Schenuit (SWP) and Aysel Aliyeva (LibMod) in Brussels on 20 March, we addressed these and other questions. Against the backdrop of the Carbon Manage­ment Strategy published by the EU Commis­sion in February, we worked with the Heinrich Böll Foun­da­tion in the morning to discuss how the risks of carbon manage­ment can be dealt with sensibly. In the afternoon, together with the repre­sen­ta­tion of the state of North Rhine-West­phalia in Brussels we continued on the question of how regu­la­tion and infra­struc­tures can be consid­ered on a European level.

By giving short presen­ta­tions, our guests stim­u­lated the discus­sion: Mette Quinn (Head of Unit, Direc­torate-General Climate, EC), Christian Holzleitner (Head of Unit, Direc­torate-General Climate, EC), Chris Sherwood (Secretary General, Negative Emissions Platform), Ulriikka Aarnio (Senior Policy Coor­di­nator, Climate Action Network (CAN) Europe), Wijnand Stoefs (Lead Carbon Removals, Carbon Market Watch) and Artur Runge-Metzger (Senior Fellow, Mercator Research Institute on Global Commons and Climate Change).

A key message was that the volume of negative emissions will remain limited for the fore­see­able future. This makes it all the more important to reach a consensus on the specific role of negative emissions in climate policy. In view of the technical, economic and biolog­ical limi­ta­tions, it seems sensible to utilise the potential until the middle of the century.

By then, they will contribute to achieving a climate balance (net zero target). The main aim here is to offset emissions that cannot be avoided or are difficult to avoid.

In the second half of the century, negative emissions will be necessary to pull the CO2 balance into negative territory (net negative target) and thus stabilise the earth’s climate. Indus­tri­alised countries can thus contribute to reversing some of the emissions generated in the past.

Because of this important but limited role of negative emissions in climate policy, it is essential to prevent all avoidable emissions.

A European approach to carbon manage­ment and negative emissions

Negative emissions are already part of European climate policy today. For example, 310 million tonnes of natural CO2 sinks from land use, land-use change and forestry are part of the EU’s 2030 climate targets.

However, the issue of technical sinks should also be consid­ered from a European perspec­tive. This applies not only to the necessary CO2 infra­struc­ture (e.g. for CCS) and harmonised regu­la­tion, but also to a fair distri­b­u­tion of the negative emissions targets among the member states.

At a time when inter­na­tional coop­er­a­tion and cross-border initia­tives are more important than ever, the EU is rightly placing carbon dioxide removal (CDR) tech­nolo­gies such as bio-based construc­tion, geolog­ical storage and biochar at the centre of its climate policy for 2030. A key instru­ment here is the European Inno­va­tion Fund, which is specif­i­cally geared towards scaling up such technologies.

Differ­en­ti­a­tion of CDR methods and governance

Regu­la­tory approaches and incen­tives that treat the various methods differ­ently are key to utilising the potential of the different CDR methods (Direct Air Capture, BECCS, Enhanced Weath­ering, etc.), but also to coun­tering risks appropriately.

In addition, the extrac­tion of CO2 requires a high degree of quality, trans­parency and account­ability. Otherwise, the risk of free riders making a quick buck with weak certifi­cates and thus damaging the industry’s repu­ta­tion is too great. The certifi­cate market will only function and investors will only invest if there are clear rules. The EU certi­fi­ca­tion framework (CRCF) plays a central role here.

It also became clear in the discus­sions that one has not to start from scratch here. There are already various approaches in European climate policy to which the regu­la­tion of carbon manage­ment can dock. Whether the inte­gra­tion of negative emissions into the European Emissions Trading Scheme (EU ETS) makes sense is the subject of ongoing debate.

Real­is­ti­cally assessing and financing costs

There are different approaches to financing and distrib­uting the costs of CO2 removal. What is certain is that long-term CO2 removal will remain expensive for the fore­see­able future. It is obvious that companies and indus­tries that do not reduce their green­house gas emissions should pay for carbon dioxide removal according to the polluter pays principle. But who will bear the costs of removing CO2 emitted today from the atmos­phere in the second half of the century? A CO2 disposal tax is conceiv­able here.

With a view to the next EU budget, we are facing consid­er­able chal­lenges, not least with regard to the provision of addi­tional public funds for CO2 removal. The devel­op­ment of financing models such as climate protec­tion contracts or green lead markets, which are supported by both public and private investors, will be crucial. These strate­gies need to be actively pursued in order to be priori­tised in the budget of the next EU Multi­an­nual Financial Framework.

To finance the market ramp-up and offer start-ups financing oppor­tu­ni­ties, public-private part­ner­ships are a sensible solution in times of severe budgetary constraints. Offering start-ups a perspec­tive is important because the start-ups that exist today are devel­oping the CDR solutions that we will need by the middle of the century.

The biggest danger would be to only look at the risks — and not take action

All levers should now be pulled to realise negative emissions on a large scale. At the same time, we need to keep an eye on the risks and keep addressing them. However, the greatest danger would be to only look at the risks — and not act. This is all the more true in view of the fact that the issue is being tackled much less timidly in other regions of the world. Europe can still set standards — but it needs to get started now.

At the same time, it is important to bear in mind that the long-term storage of CO2 can be a problem for both natural and technical sinks. In addition, the crediting of certifi­cates is compli­cated and compe­ti­tion for energy and land consump­tion can arise.

A critical aspect here is that risks and chal­lenges that we do not yet fully recognise may be under­es­ti­mated. At the same time, given the urgency, we could hardly wait until all the problems have been solved. For many things, a solution will only be found along the way.

Long list of to do’s for the new European Commission

All partic­i­pants agreed that the to do list for the new European Commis­sion is long. Above all, it must integrate carbon manage­ment into other climate policies.

At the same time, it is becoming apparent that the political envi­ron­ment following the EU elections in June will make discus­sions and decisions on climate policy more difficult. In addition, the EU budget is likely to be tighter, meaning that fewer financial resources will be available.