Carbon Removal: 2023 Highlights & What’s Ahead
Carbon removal took major steps forward in 2023, positioning 2024 to be another year of significant growth. Countries from around the world affirmed the need for carbon removal to meet the goals of the Paris Agreement at COP28.
Key highlights from 2023 are summarized below in four categories and more growth in each of these areas is expected in 2024: 1) innovation from carbon removal companies, 2) private sector investment, 3) enabling policies, and 4) responsible deployment. The Carbon Business Council dives into these pillars below with a look back on 2023 and what’s ahead for 2024.
—Innovation Has Liftoff in the U.S. and Around the World—
Carbon removal is boosted by innovators developing creative approaches to scale removals, safely and affordably. The Carbon Business Council represents more than 100 innovators working in removals, encompassing a wide range of carbon removal pathways. By advocating for a level playing field to spur innovation, we saw breakthroughs in 2023 for existing and emergent carbon removal pathways. Interested to unpack the full range of carbon removal pathways and innovations? Check out the Carbon Business Council’s issue brief on Defining Carbon Removal.
Carbon removal is taking place across the U.S. and globally. Carbon Removals at COP published an atlas of carbon removal project developers from more than 30 countries around the world. The new Roads to Removals report highlights opportunities for carbon removal across every county in the United States. Multiple projects were also announced in the Global South this year, including direct air capture innovation in Kenya.
—A Big Private Sector Boost—
There is rapidly growing demand for carbon removal, with a more than 400% increase in purchasing of carbon removal credits at this time compared to last year, according to CDR.fyi. The Boston Consulting Group released a report in September about the carbon removal market’s potential to reach $135 billion by 2040. This came right before McKinsey’s market report estimating the CDR market reaching $1.2 trillion by 2050. In addition to long-time existing buyers in removals, in 2023 we also saw several new private sector leaders step into the space to purchase carbon removal, as well as carbon removal companies delivering on their carbon removal pledges to buyers.
Curious to learn more about corporate engagement in the carbon removal sector? Check out this recently published report by the Carbon Business Council and BMW Foundation on accelerating corporate leadership.
—Increasing Support for Removals in U.S. Policy—
Private sector innovations and investments in carbon removal are buoyed by a supportive policy environment. Highlights include:
From the Department of Energy, we saw the first two DAC Hub sites and an allocation of net $1.5 billion in funding for them. This came alongside 19 additional financial awards for DAC projects for feasibility and design. The DOE also launched the first government procurement program for carbon removal with the Carbon Dioxide Removal Purchase Pilot Prize, allocated at $35m in funding for a variety of carbon removal approaches. This came alongside the Carbon Negative Shot announcement, a potential issuance of various future funding opportunities for carbon removal technologies.
In other branches of government, the National Oceanic and Atmospheric Administration and the Department of Commerce launched the Fast-Track Action Committee on Marine Carbon Dioxide Removal and dedicated a $24 million allotment for marine carbon dioxide removal projects.
In Congress, we saw multiple legislative efforts advanced this year. The Carbon Removal and Emissions Storage Technologies (CREST) Act was reintroduced in the Senate, a bipartisan-supported piece of legislation oriented towards establishing a pilot reverse auction purchasing program to help carbon removal market commercialization. The Federal Carbon Dioxide Removal Leadership (CDRLA) Act was introduced in the Senate and the Carbon Dioxide Removal Research and Development Act was sponsored by members of both the House and Senate. The bipartisan Carbon Removal, Efficient Agencies, Technology Expertise (CREATE) Act was also introduced. Finally, the quinquennial Farm Bill returned in 2023, albeit with difficulties in a divided Congress and with continued deliberations into 2024. If you’re interested in learning about carbon removal integration into the Farm Bill, we invite you to review the Carbon Business Council’s policy brief.
—Carbon Removal Policies Growing Globally—
In the EU, the Carbon Removal Certification Framework continued to move through the European Commission, alongside the EU’s call for input on Industrial Removal Certification Methodologies and the call for Evidence on Industrial Carbon Management. The UK announced an integration of removals into its emissions trading scheme. New Zealand released a draft carbon removal strategy. And innovation in Africa and the wider Global South has continued to grow exponentially.
—Responsible Deployment of Carbon Removal—
The importance of responsible deployment and earning the social license to operate has been an important topic throughout 2023 and will continue in 2024. DOE announced the Responsible Carbon Management Initiative, in a signal of the government’s growing focus on the need for robust community engagement. The Carbon Business Council launched the Carbon Dioxide Removal Responsible Deployment Training (CDR RDT), an introductory suite of resources and trainings on the responsible deployment of carbon removal.
This all comes alongside a continued regard towards responsible growth, acknowledging that removals have an opportunity to proactively work with communities to build a better future together. You can find more resources on community engagement and how to responsibly deploy.
—Heading Into 2024—
As the world breaks record temperatures, the road to gigaton scale can’t be achieved without continued leadership in each of these pillars of carbon removal outlined above. This includes leadership from innovators to scale removals, purchases from the private sector, and enabling policies. With twin targets in policies and net zero goals, removal can continue to work in tandem with the crucial work of reducing emissions.
We expect to see continued conversations in 2024 on the importance of monitoring, reporting and verification; the responsible deployment of carbon removal and community engagement; how to continue scaling the market; and what policies can help to unlock carbon removal along with emissions reductions.
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Carbon Business Council (CO2BC), a member-driven and tech-neutral trade association of companies unified to restore the climate, is the preeminent industry voice for carbon management innovators. Together, the nonprofit coalition represents more than 100 companies and organizations across six continents with more than $16.5 billion dollars in combined assets.
