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“Targeted Intervention” Could Grow CO2 Removal

The global carbon dioxide removal (CDR) market could reach up to US$100 billion a year between 2030-2035 if barriers to scale are addressed, new research has shown. A joint report from global consultancy Oliver Wyman, the City of London Corporation and the UK Carbon Markets Forum argued that without targeted intervention, the CDR market may only reach 10% of its potential size. CDR projects, which aim to remove and store carbon dioxide from the atmosphere, have been gaining interest from corporate purchasers, investors, and project developers due to their potential to address hard-to-abate greenhouse gas emissions. Climate authorities have also emphasised the need for substantial scaling of CDR projects to limit global warming, with over US$30 billion already invested globally in anticipation of this growth. “While demand for CDR credits is growing, it is not yet at a scale to support the level of investment being made in underlying carbon removal projects, and far below the level experts say is required to achieve net zero,” the report mentioned. Following discussions with over 30 companies, the report identified major barriers to CDR demand, including lack of guidance on removals in decarbonisation targets and the absence of universally agreed standards on quality. It highlighted key actions that the industry can take, such as articulating the role of removals in the UK’s net zero strategy, providing guidance to companies on their appropriate role, establishing clear thresholds for monitoring, verification, and reporting, and supporting the development of the CDR financial market ecosystem. “We are witnessing a significant increase in attention and investment towards CDR projects, highlighting the growing recognition of their role in the transition,” said James Davis, Partner and Co-head of Climate and Sustainability for Europe at Oliver Wyman. “However, the demand for carbon credits generated by these removal projects is not yet sufficient to support even current levels of investment – let alone the level required to meet climate goals. The UK is well-positioned to establish itself as a major hub for carbon removal activities, creating new job opportunities and driving economic growth, but action will be needed to overcome the barriers to scaling and accelerate progress.”

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