❗ Why the BioCCS costs in the ETS proposal simply don't add up ❗

💶 The BioCCS cost assumptions are the Achilles Heel of the current ETS CDR proposal. The numbers - see comments for a reminder - just don’t look right, with all the downstream implications they have.

👀 So I dove deep. Very deep.

Three numbers are key to understand: 

1️⃣ €172/t in 2020 - this forms the lower bound starting point (in 2023, using EUR2020)

2️⃣ €153/t in 2050 - this forms the single end point for all three (lower/average/upper) scenarios. 

3️⃣ €314/t in 2024 - this forms the upper bound starting point

📌 Note: the average scenario simply takes the mean between lower and upper bound scenarios.

All values you see in the projections essentially derive from these three numbers. So let’s unpack them one by one:

1️⃣ €172/t in 2020 - comes from Reiner et al. (2023), NEGEM deliverable D5.4, an expert elicitation. The actual number is a constructed reference stack which assumes overall costs of €337/t, and energy revenues of €165/t (hence €172/t). It is also calibrated against a statement made by Drax at a conference in 2022 (no source available).

2️⃣ €153/t in 2050 - from Reiner et al. (2023) again. No industry data, but the arithmetic mean of a panel of 9 BECCS experts’ best estimates for 2050.

3️⃣ €314/t in 2025 - this is not a cost at all but a mean voluntary-market transaction price of $300/t for 2019-2023 based on CDR.fyi data and adjusted to EUR2023. Key here: these are prices, not costs, they are global, and they have government subsidies baked into them (which was my assumption from the start).

What stands out

📍 None of this is based on a proper industry cost analysis 

📍 Data is clearly outdated (all pre 2024)

📍 Some data is global

📍 All scenarios track the same end-point: €153/t in 2050

📍 BECCS and BioCCS costs are simply equated

📍 Assumed energy revenue generated creates yet another unpredictable variable

📑 Now there is much more to it than this. I have pages and pages of notes. If folks are interested, I am happy to do a follow-up with more insights on assumptions, methods, and some of the modelling done here (which has a huge impact).

🤷‍♂️ So what is the takeaway here? Basically what everyone in the industry already knows: these numbers are way too low and unrealistic.

✅ Where do we go from here: I would strongly, strongly encourage industry associations, especially those with a strong BioCCS contingent (looking at you Bioenergy Europe, Carbon Management Europe, Nordic Carbon Removal Association (NCRA), or Negative Emissions Platform) to gather and publish real industry cost data. The Commission simply worked with what was available.

👏 A good example is the yearly market report from Biochar Europe which has helped a lot in creating transparency on real costs - maybe that can prove as a role model.

🗣️ That’s it. As always: challenge this. Prove me wrong. I want to get to the bottom of this.

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