Unlocking CO2 Infrastructure Deployment: The Impact of Carbon Removal Accounting

33 Pages Posted: 21 Jan 2022

See all articles by Emma Jagu

Emma Jagu

IFP Energies Nouvelles; Center for Energy Economics and Management, IFP School; Laboratoire de Génie Industriel, CentraleSupélec, Université Paris Saclay

Olivier Massol

IFP School - Center for Energy Economics and Management; IFP Energies Nouvelles; City, University of London - Department of Economics; Industrial Engineering Department (Laboratoire Génie Industriel, LGI)

Date Written: January 20, 2022

Abstract

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

Suggested Citation

Jagu, Emma and Massol, Olivier, Unlocking CO2 Infrastructure Deployment: The Impact of Carbon Removal Accounting (January 20, 2022). USAEE Working Paper No. 22-541, Available at SSRN: https://ssrn.com/abstract=4013859 or http://dx.doi.org/10.2139/ssrn.4013859

Emma Jagu (Contact Author)

IFP Energies Nouvelles ( email )

1 & 4, avenue de Bois-Préau
Rueil-Malmaison
Paris, 92852
France

Center for Energy Economics and Management, IFP School

Rueil-Malmaiso
France

Laboratoire de Génie Industriel, CentraleSupélec, Université Paris Saclay

Olivier Massol

IFP School - Center for Energy Economics and Management ( email )

228-232 avenue Napoléon Bonaparte
Rueil-Malmaison, 92852
France

HOME PAGE: http://https://www.ifpenergiesnouvelles.com/page/olivier-massol

IFP Energies Nouvelles ( email )

1 à 4 avenue de Bois Préau
Rueil-Malmaison, 92852
France

HOME PAGE: http://https://www.ifpenergiesnouvelles.com/page/olivier-massol

City, University of London - Department of Economics ( email )

Northampton Square
London, EC1V 0HB
United Kingdom

HOME PAGE: http://https://www.city.ac.uk/about/schools/arts-social-sciences/economics#unit=academic-staff

Industrial Engineering Department (Laboratoire Génie Industriel, LGI) ( email )

Moulon Plateau 3 Joliot Curie Street
Gif-sur-Yvette, 91190
France

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