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📈 At their most basic, these are the two options we have at our disposal to scale carbon dioxide removal (#CDR) to the gigaton scale we need: incentives and compliance.
🥕 What incentives look like:
1️⃣ Tax credits such as the Canadian ITC which 60% of CAPEX equipment costs for DAC projects.
2️⃣ Subsidies such as the €1.37b earmarked for CCUS (including DACCS) projects in Germany
3️⃣ Direct procurement such as the €166m the Danish government just announced to purchase 1.1Mt of BioCCS removals
🥢 What compliance looks like:
1️⃣ Integration into Emission Trading Systems such as the EU ETS, which had a volume of €751b in 2022
2️⃣ A dedicated Removal Trading System as is currently being contemplated in the EU
3️⃣ Green / environmental claims legislation such as the EU Green Claims Directive mandating the use of durable CDR for any product/company claim.
💡 For a full list of options and context, check out this article on “Government as catalyst: Strategic financing paths for scaling carbon dioxide removal“: https://lnkd.in/gR6Z_PVQ
Currently, it is all incentives. But that might change soon.
💬 What is your take? If you had to pick one: sticks or carrots? Why? Vote and then add your comments below.