❗Digging deeper into Biochar costs in the EU ETS Proposal❗

👀 This is a particularly important one to scrutinise, as excessively low BCR costs - €37/t anyone? - were explicitly highlighted by the EU Commission as a reason NOT to integrate BCR into the ETS, given it could potentially lead to distorting effects.

🇪🇺 Now I know the BCR industry well enough to immediately realise that the Commission’s numbers were off.

So let’s dig in - here is how the numbers come together:

1️⃣ The entire lower bound (€66-€37/t) comes / is derived from McKinsey (2023) black box data, same report as for DACCS. Importantly: it is global. And even more importantly, the Commission seems to have taken their outrageous 2050 (€37/t) forecast and used it a decade earlier in 2040. I wrote a BCR cost myth buster explaining why this is never going to happen (in comments).

2️⃣ The upper bound (€215-€138/t) comes / is derived from Ramboll (2025) and is based on a public survey of 8 (non-identified) responses. Even there, the median of this very small sample was taken as the range was more than double this.

3️⃣ The medium bound (€141-€88/t) is simply the mid-point of McKinsey and Ramboll.

📌 Note: all 2040 numbers are coming from the Commission having adopted a linear cost decline between 2035-40, but the exact method is not laid bare.

In plain English: the upper bound is based on extremely shaky data, the lower bound is not applicable to Europe at all, and the middle - as the mid-point between the two - is unfortunately heavily shaped by the lower bound.

🤷‍♂️ Ramboll, in describing their own survey, stated that the very broad and open survey findings were “subjective assessments”. Further, the Commission using a median as an upper bound - as opposed to a medium bound - feels odd, as it implies that half the costs in reality lie above this value.

So what should we look at instead? Unlike for DACCS and BioCCS, we have pretty good data for BCR:

➡️ Real price data from CDR.fyi, which for BCR is accurate and almost always excludes any national subsidies (unlike for BioCCS). Prices here stand at €120-€200 on average and globally. I am sure Tank Chen could further break it down to the EU for us (likely higher than the average).

➡️ Biochar Europe carries out a yearly survey with real European industry cost data. Its 2024 Market Report puts BCR at €150-€250/t, and in 2025 it explains why the costs will likely stay the same for 2030 and 2035. At lower costs, it stresses that biochar producers will simply sell their product into metallurgy or even charcoal.

✅ So here you have it: the real data behind all the CDR cost projections in the EU ETS proposal.

🎙️ But this is not the end of the story: we will be producing a spicy CDR Policy Scoop episode on this topic with two industry experts, stress testing all the BioCCS/DACCS/BCR assumptions for you. Watch this space.

🗣️ If you have feedback, observations, or questions you want us to address, just drop them in the comments.

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