Unlocking CO2 Infrastructure Deployment: The Impact of Carbon Removal Accounting
33 Pages Posted: 21 Jan 2022
Date Written: January 20, 2022
Carbon removal certification may become a powerful instrument to accelerate decarbonization efforts. In Europe, its implementation is expected to foster the deployment of Bioenergy with Carbon Capture and Storage (BECCS). Yet, the large-scale adoption of BECCS is also limited by the availability of a costly CO2 transportation infrastructure shared with fossil-fueled emitters. In this paper, we examine the interactions between carbon removal accounting (which determines financial incentives for BECCS) and optimal CO2 infrastructure deployment by asking how certification affects the feasibility of BECCS projects. We propose an original economic framework to explore this question and apply it to a real case study in Sweden. We show that, although a carbon removal accounting framework based on a lifecycle methodology discourages investment in inefficient BECCS processes, it may lead to locking out BECCS from CO2 infrastructures. Our results suggest that a trade-off must be found between accurately evaluating carbon removal and avoiding BECCS lock-out. We formulate two policy recommendations to overcome this trade-off: (i) deploying sustainable biomass certification to incentivize more carbon-efficient BECCS process, and (ii) stimulating public and private demand for carbon removal credits to induce a higher price for sustainable carbon removal than for carbon mitigation.
Keywords: Carbon removal accounting, Carbon removal certification, Negative Emissions, Bioenergy Energy with Carbon Capture and Storage, CO2 infrastructures
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