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Exploring EU policy with Elisabeth Harding │ What goes up must come down, Episode 4
Introduction
In today's rapidly changing climate landscape, the need for effective carbon removal strategies is more pressing than ever. In our latest podcast with Elisabeth Harding, we delve into the recent developments in EU policy surrounding carbon dioxide removal (CDR) and discuss the implications for businesses and the environment.
Elisabeth, who serves as the policy manager at the Negative Emissions Platform, gave us insights into the EU's commitment to carbon removal. The organisation represents various technologies such as direct air capture, bioenergy with carbon capture, and marine carbon removal. As Elisabeth explained, the EU is increasingly focusing on not just the policies at the EU level but also on national levels where significant advancements can be made.
"We have to be going to negative emissions if we want to have a stable and habitable planet for generations to come."
- Elisabeth Harding, Policy Manager at the Negative Emissions Platform
TL;DR
- The EU Scientific Advisory Report on Carbon Dioxide Removal (CDR) outlines nine key recommendations for policy improvements.
- There’s a strong need for separate targets for gross emissions reductions and carbon removals.
- The Clean Industrial Deal aims to boost the EU’s clean tech industry amid global competition.
- Integration of carbon removal into the EU’s Emissions Trading System (ETS) is essential for creating demand.
- Public-private partnerships and funding initiatives are crucial for advancing carbon removal technologies.
The EU Scientific Advisory Report
One of the main topics we explored was the recent EU Scientific Advisory Report on CDR. This report, developed over two years, offers a scientific foundation for advancing carbon removal technologies. It outlines nine key recommendations across policy, carbon markets, and governance.
The report also highlights the need for building CO2 infrastructure, which is critical for transporting and storing captured carbon. Elisabeth pointed out the importance of integrating carbon removal into the ETS, which covers a significant portion of the EU's economy. This integration is crucial for creating a demand signal for carbon removal technologies.
"The proof is in the pudding, and now it's really up to the EU to take this forward in the climate law."
- Elisabeth Harding
Implications of the Clean Industrial Deal
As part of our conversation, we also discussed the Clean Industrial Deal, which aims to position the EU as a leader in clean technology while addressing competitiveness concerns. The deal outlines various initiatives to support hard-to-abate industries in decarbonizing their operations.
With the establishment of the Industrial Decarbonization Accelerator Act, new opportunities are emerging to drive demand for carbon removal, particularly in challenging sectors that are traditionally hard to decarbonize. Elisabeth expressed optimism that these policies will help build a more robust market for carbon removal technologies.
Looking Ahead
As the demand is projected to rise, it has become clear that the next few years will be pivotal for carbon removal in the EU. Companies and stakeholders in the carbon removal space need to prepare for upcoming compliance markets and engage with the evolving policy landscape. Elisabeth emphasised the importance of starting small, encouraging companies to begin purchasing carbon removals to build experience and confidence ahead of more stringent regulations.
With the groundwork being laid now, it’s an exciting time for those invested in climate action. The consensus on the need for carbon removal is growing, and the focus is shifting from “if” to “how” and “when” these technologies will be integrated into broader climate strategies.
Conclusion
Our conversation with Elisabeth Harding highlighted the crucial intersection of science, policy, and technology in the realm of carbon removal. As the EU continues to refine its approach to climate action, it is clear that the path forward will require collaboration, innovation, and a steadfast commitment to achieving negative emissions. The future of our planet depends on it, and it is up to all of us to engage in this vital conversation.
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Scaling NBS with Kahlil Baker│ What goes up must come down, Episode 3
Introduction
In the ongoing battle against climate change, nature-based solutions (NbS) have emerged as a crucial strategy for carbon removal and ecosystem restoration. By leveraging the natural processes of our planet, we can sequester carbon, restore biodiversity, and engage communities in meaningful ways. In our latest podcast featuring Kahlil Baker, CEO of Taking Root, we explore the importance of NbS, the differences between centralised and decentralised reforestation efforts, and the significance of community engagement in these projects.
TL;DR
- Understanding nature-based solutions and their role in carbon removal.
- The critical differences between centralised and decentralised reforestation efforts.
- The importance of community engagement in successful NbS projects.
- How economic incentives can align land use with environmental benefits.
- The role of local partnerships in building trust and ensuring project success.
Why Nature-Based Solutions Matter
Nature-based solutions are essential in the fight against climate change because they allow nature to do the heavy lifting. Through photosynthesis, plants remove carbon dioxide from the atmosphere and store it in their biomass. However, the conversation around climate change often focuses narrowly on carbon concentrations, neglecting the broader roles that ecosystems play in climate stabilization, such as regulating water cycles and cooling the planet.
"If we built machines that removed all the parts per million to where we wanted to 350 or whatever, I still think we'd have a climate crisis on our hands."
- Kahlil Baker, CEO of Taking Roots
Centralized vs. Decentralized Approaches
When it comes to reforestation, two primary approaches exist: centralized and decentralized. Centralized efforts often involve acquiring large tracts of land and implementing reforestation without local input. While this method simplifies logistics, it can ignore the socioeconomic realities of local communities. On the other hand, decentralized approaches empower local farmers and land managers to engage in reforestation on their own terms.
This decentralized model has proven effective in scaling restoration initiatives, as it taps into the existing knowledge and practices of local communities. By encouraging participation and collaboration, we can achieve not only carbon sequestration but also additional benefits that enhance local livelihoods.
Community Engagement: The Heart of Successful Projects
Community engagement is vital for the success of nature-based solutions. Engaging local stakeholders ensures that projects are designed with their needs and livelihoods in mind. By conducting community consultations, we can tailor restoration projects to align with local economic activities, whether it's cattle ranching, coffee production, or agroforestry.
"You want to create a program for it to be successful; a lot of people need to buy into it."
- Kahlil Baker
Building Trust and Ensuring Success
Trust is a fundamental component of successful community engagement. Working with local partners who understand the cultural context and existing social dynamics is crucial. These partnerships not only facilitate trust but also help navigate the complexities of local land-use patterns.
Moreover, it’s important to recognize that while carbon credits are a transactional unit, the broader goals of these projects often extend beyond carbon sequestration. Addressing biodiversity loss, improving local livelihoods, and enhancing ecosystem services are all critical components that can be integrated into carbon market projects.
Conclusion
Nature-based solutions offer a promising pathway in our fight against climate change, but their success hinges on understanding local contexts and fostering community engagement. By embracing decentralized approaches and building trust, we can unlock the full potential of NbS to create resilient ecosystems and empower communities. As we move forward, it's essential to remember that effective climate action requires not just innovative technology but also the wisdom and participation of the communities that live alongside nature.
SBTi’s Revised Net-Zero Standard: What It Means for Carbon Removal
A Step Forward for Carbon Removal
One of the most notable updates is that the new draft includes explicit near-term targets for removals, reinforcing that CDR should not be a last-minute fix, but rather an integral part of corporate net-zero strategies. Under the proposed framework, companies must start investing in removals well before their net-zero target year, setting interim milestones to ensure alignment with long-term climate goals. This shift could provide much-needed investment certainty for carbon removal projects and developers, helping to move the industry beyond its current reliance on voluntary early adopters.
Additionally, the revised standard affirms that once a company has reduced its emissions as much as possible, it must neutralise residual emissions with high-durability carbon removal. This is a positive development, as it strengthens the case for scaling durable removal solutions such as biochar and direct air capture (DAC).
Limiting the Scope of Removals: A Missed Opportunity?
Despite these positive steps, the revised draft restricts the use of removals to Scope 1 emissions, at least until companies reach their net-zero target date. Scope 2 and Scope 3 emissions are not currently required to be neutralised with CDR until the long-term phase. For many companies that do not produce their own goods, Scope 3 emissions account for 70-90% of a company’s total emissions.
This decision has sparked debate among climate experts and CDR advocates, highlighting several key concerns:
- Without widespread requirements for CDR integration, this dampens the demand for near-term carbon removal credits and presents a challenge to scaling the market in time for net zero. Without widespread investment today, supply wont be ready for the amount required in the future.
- By limiting near-term CDR requirements to Scope 1, SBTi risks delayed integration of removals from some of the most ambitious corporate net-zero leaders. Many industries with high Scope 1 emissions such as heavy industry and aviation have been slow to adopt SBTi targets, whereas sectors with predominantly Scope 3 emissions (e.g., consumer goods, finance, and tech) have been more proactive. Fewer companies are then incentivised to invest in removals, especially those with ability to pay.
- Omission of Beyond Value Chain Mitigation (BVCM) in SBTi’s required near-term targets could further limit demand. Companies are encouraged to invest in removals and other actions outside their value chain. But, there is no formal recognition of these actions, potentially dulling incentives despite growing interest in BVCM strategies. Stronger guidance on how removals can support Scope 3 abatement in the transition phase could help incentivise greater climate mitigation, drive demand, and accelerate the scale-up of much-needed CDR solutions.
SBTi’s suggestion to direct removals to Scope 1 emissions is founded on the idea that Scope 2 emissions will almost certainly be zero by target years, and Scope 3, at present, is too difficult to estimate at this time and raised concerns over double claiming. Is a Scope 1 requirement the most hopeful case for interim removal targets, or is another path possible?
The Risk of Delayed Corporate Action on Removals
Strong, consistent demand signals are critical to securing financing and scaling supply for CDR project developers. By postponing mandatory removals for most emissions until the net-zero target date, there is a risk that many projects will struggle to secure the off-takes they need to reach commercial viability. Investors and project developers need clear and sustained demand commitments today—not just in 2040 or 2050.
Furthermore, the current framework may encourage companies to delay engagement with removals altogether as the bulk of companies under SBTi commitments do not have a large Scope 1. As is pointed out in this analysis, while CDR demand will increase among companies that estimate having residual Scope 1 emissions at net-zero, it can potentially hamper the individual efforts within companies without large Scope 1 (which include most companies!).
If companies postpone action on CDR until their net-zero date is near, total demand goes down. Moreover, expected cost reductions for high-durability removals would also be delayed, making it even harder to achieve affordability at scale. This is a major concern given the IPCC’s projections that we will need to scale CDR to several giga-tonnes per year by mid-century to stay within 1.5°C.
Where Do We Go from Here?
SBTi’s revision is still in draft form, and stakeholders now have the opportunity to provide feedback during the public consultation period. While the inclusion of near-term CDR targets is an important step, the framework must strengthen corporate incentives to invest in high-quality removals earlier in their transition pathways to build the necessary infrastructure for long-term scalability.
To ensure that removals play a meaningful role in corporate climate strategies before the net-zero deadline, potential revisions could include allowing (or even requiring) removals for a portion of Scope 3 emissions in the near term, particularly for hard-to-abate sectors. In this scenario, companies with higher ability to pay could help fund scaling for permanent removals that make up their Scope 3, aiding the sectors that are less able to afford Scope 1 reductions. These areas are often where most residual Scope 1 emissions will be remaining at net-zero. This paper–which is worth reading–discusses just this topic, pointing out how “approximately 90% of emissions originate from companies that generate only 25% of profits, highlighting a disparity in the ability of polluters to pay the cost of their emissions and fund climate solutions, including carbon removal.”
The current proposal from SBTi does not take the above imbalance into account, meaning that it is likely that a large portion of Scope 1 emissions will not be neutralised at the net-zero target date unless incentives urge companies with higher ability to pay to neutralise those emissions. The imbalanc in profit per tonne emitted is displayed in the figure below, highlighting sectors with a high ability to pay across the GHG emission scopes.
Final Thoughts
The revised SBTi draft is a mix of progress and limitations for carbon removal. While it establishes a clearer role for CDR, its restricted application to Scope 1 emissions, and the mere encouragement of CDR within BVCM could slow near-term demand just when the market needs momentum.
Now is the time for corporate sustainability leaders, project developers, and climate experts to weigh in. If we want to see a thriving carbon removal market that supports a robust net-zero transition, we need guidelines that drive—not limit—demand.
What do you think? Does the new SBTi draft go far enough in supporting carbon removal? Should it require earlier adoption for Scope 3 emissions? We’d love to hear from you.