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💸 New week, new myth. The magical €100/t. An often promised number that CDR startups are expected to reach at scale.
😮 Tighten your seatbelts, folks: this might never happen. Nor does it need to.
Hear me out.
1️⃣ Let’s start by looking at the cost of other materials at scale.
No processed material/commodity in the world is that cheap. Even cement, one of the world’s most used materials, costs around $125/t. Crude oil around $550/t, and desalinated water $1,000/t. These are materials we have developed insanely efficient processes for over decades.
2️⃣ What if we consider CDR a ‘waste management’ issue.
While highly variable across geographies and regions, the cost to dispose of commercial waste ranges between $20-$150/t. More complex waste, e.g. construction or hazardous waste, can quickly reach $100-$200+ per ton. CDR - a labour/energy intensive approach that is capturing a very dilute gas from the atmosphere and then has to store the “waste” carbon safely for millennia - is more akin to complex waste management and thus hard to imagine at <$100/t.
3️⃣ That brings me to another point that people often forget to factor in: inflation. Oh yeah, that. Assuming normal rates of inflation (and what is “normal” today?) we’d be landing at anywhere between $150-$250/t.
✨ So is $100/t out of the question? No. I still believe it is possible, but only for CDR where the carbon credits constitute just a part of the revenue stream, e.g. biochar carbon removal (hashtag#BCR) or hashtag#BECCS. Other approaches – and one could argue the ones with the clearest case for additionality – like hashtag#DACCS will just not reach this magical target.
📉 Finally, do we need CDR to cost $100/t to hit our climate targets? I don’t think so. On the voluntary side, studies have shown that at $150-$200/t we would already see a huge uptick in demand. On the compliance side, if we are to primarily tackle the residual 5-15% of emissions, there are plenty of decarbonisation options below $150/t we can and should do first.
🕺 Real talk: can we just drop the $100/t talk and instead anchor the ideal CDR cost in more tangible concepts such as real abatement costs, the social cost of carbon or the cost of sustainable aviation fuel?
❓ What is your take? What am I missing here?
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