What do we mean when we say we need to “integrate CDR into industry”?
Over the last few months, the CRSI team and I have been talking to a lot of folks around the CDR ecosystem about industrial integrations of carbon removal. The general intuition we all seem to share goes like this:
In the future, we will need massive amounts of carbon removal. Reasonable people can argue about how much and when and under which modeled scenarios. But generally, we work in CDR because we believe we will need to remove gigatons of carbon from the atmosphere.
There are industries operating globally today that know how to move gigatons of mass: through facilities, from one place on the planet to another, between geological reservoirs. Think cement, steel, shipping, waste management.
In order to scale, the carbon removal industry needs to learn from, work with, and embed inside of existing large-scale industries. And that needs to happen ASAP if CDR is going to scale fast enough to meet climate goals.
So then the question becomes: How?
Big industries don’t care much about carbon removal, and for good reason. These industries are highly optimized, with low margins and lots of trade exposure. Decarbonizing their emissions-intensive processes requires substantial investment in nascent, expensive technologies and, in some instances, profound transformations of their core business models.
How do we get these massive companies, that are grappling with difficult decarbonization problems of their own, to start thinking about our niche of the carbon market, moving kilotons (or, at a stretch, megatons) of carbon dioxide around?
Integrating CDR into industry will require a lot of work: finding the physical removal processes inside industries, spinning up early projects using voluntary carbon market finance, identifying sector- and jurisdiction-specific policy opportunities to build carbon removal solutions, bringing industrial stakeholders to the table, and ensuring policies accurately quantify climate impacts (CRSI’s particular area of focus).
Our understanding of industrial CDR
That’s a lot of moving pieces. To help us keep track as we support projects across the CDR ecosystem, we made a simple framework to categorize different ways we could integrate CDR in industry.
The first dimension in our framework is type of integration. We think this breaks down into three big buckets:
Buying or selling carbon removal credits to meet decarbonization targets, e.g. under a compliance cap-and-trade scheme.
Co-locating carbon removal facilities with heavy industry to share infrastructure.
Embedding physical and chemical processes that remove carbon from the atmosphere—or enhance removal processes—inside existing operations.
The second dimension is categories of industries. Because CRSI's work is founded on the belief that policy will be integral to scaling CDR, we’ve grouped together industries that generally fit under similar climate, environmental, and economic regulations. These groups of industries also have physical similarities (e.g. shared feedstocks and supply chains, the need for high-grade heat).
Here’s what the framework looks like in practice, with a few illustrative examples:
To be clear, this table doesn’t make any claims about the societal value or CDR potential of any of these integrations. The framework organizes commonly discussed integration opportunities, all of which have benefits and drawbacks. It also doesn’t tell us who will pay for these CDR integrations, though it does point towards potential policy support mechanisms.
Zooming out
There’s a lot to unpack here. Four thoughts that are top of mind for me:
Trading CDR credits as offsets under sector-specific decarbonization policies (e.g. cap-and-trade) is often what we mean when we talk about policy for integration. It's politically difficult to bring industrial emissions into carbon pricing or cap-and-trade schemes at price points that are relevant for durable, high-quality carbon removal, and we should calibrate our expectations accordingly. We need compliance markets and we need additional, complementary policies.
As far as we know, there are few policies that support direct physical integration of CDR into existing industries, absent carbon market finance. We think there are untapped opportunities here. The relevant industries are often, depending on the jurisdiction, heavily regulated and/or heavily subsidized through a variety of policy levers.
Types of integration are not mutually exclusive, and CDR solutions will benefit from a stack of supportive policies. For example, enhanced weathering projects could generate credits to offset a border adjustment fee that applies to fertilizer imports. Enhanced weathering is also a physical process that takes place on farms using existing equipment and has agronomic co-benefits, so we can layer in policy mechanisms like pay-for-practice subsidies.
Each intersection—an industry and an integration—will need fit-for-purpose standards and MRV. These industries already have their own regulatory regimes and quality infrastructure. CDR quantification should work with those existing systems.
From organizing information to acting on it
Our driving force at CRSI is ensuring that carbon gets counted correctly. For CDR to garner public trust and reach gigaton scale, it is essential that policies accurately quantify carbon removal. In the case of industrial integrations, we think that means good carbon accounting leveraging existing public and private infrastructure.
We plan to use the framework to clarify our own thinking and inform our work across projects, like jurisdiction-level monitoring of enhanced weathering and support for the City CDR Initiative. These projects are all steps towards building a carbon removal industry that is transparent, accountable, and worthy of public investment.
We hope this simple categorization can be useful to others tackling problems on CDR industrial integrations, and look forward to iterating on it together.
Acknowledgements: Thanks to Eli Cain at CRA, John Milko at Carbon180, Cara Maesano, and Daniel Pike for helpful discussions that informed our thinking.
Edited by Emily Reich. Cover image by Victor G.
