Energy Transition

The path to net zero requires carbon removal. Here are the tradeoffs for scaling different technologies

Carbon removal is an integral part of the global fight against climate change.

Carbon removal is an integral part of the global fight against climate change. Image: Getty Images/iStockphoto

Nivida Thomas
Fellow, Oliver Wyman (MMC)
Sebastien Dewarrat
Co-founder & COO, ClimeFi
This article is part of: World Economic Forum Annual Meeting
  • The carbon dioxide removal (CDR) industry needs to scale carbon removal by 25 to 100 times by 2030 to align with net-zero pathways.
  • Biochar leads engineered CDR in both cost ($80–200/ton) and carbon efficiency due to its low energy requirements.
  • Direct Air Capture affordability will rely on advancing the technological learning curve to address the high costs of scaling.

Carbon dioxide removal (CDR) describes the process of extracting CO₂ from the atmosphere and storing it permanently in natural or engineered reservoirs. It is essential for addressing emissions from sectors where replacing fossil-based inputs with fully green alternatives is not yet feasible, such as methane from livestock in agriculture, CO₂ from cement production and emissions from aviation fuel combustion. Technologies like biochar and Direct Air Capture (DAC), along with nature-based solutions like reforestation, play a crucial role in offsetting these hard-to-abate emissions to achieve net-zero goals.

The World Economic Forum’s First Movers Coalition is spearheading this effort by aggregating leading companies who are committed to purchase durable and scalable carbon removal solutions, targeting 50,000 tons of removal or $25 million in contracts by 2030. These pledges focus on solutions capable of storing CO₂ for over 1,000 years and scaling to megaton capacity by 2030 and gigaton capacity by 2050.

As of 2023, global CDR capacity reached approximately 41 Mt (megaton) CO₂ per year — well below the 1–1.5 Gt (gigaton) CO₂ per year required by 2030–2035 to align with net-zero pathways, reflecting a 25- to 100-fold scaling gap.

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Engineered carbon removal solutions lead in funding

CDR technologies fall into two broad categories: engineered solutions and nature-based solutions; public funding has predominantly focused on engineered solutions.

Engineered solutions, such as Direct Air Capture (DAC) and Bioenergy with Carbon Capture and Storage (BECCS), use advanced technologies to permanently remove CO₂ from the atmosphere and store it in geological reservoirs.

Nature-based solutions, such as reforestation, biochar and enhanced rock weathering (ERW), leverage natural processes to capture and store CO₂ while offering co-benefits like biodiversity and soil health improvement.

removal carbon credits
Image: Oliver Wyman in collaboration with the City of London Corporation and the UK Carbon Markets Forum

Comparing carbon removal technologies

Biochar leads in readiness to scale and cost-effectiveness

Evaluating CDR technologies involves assessing readiness for large-scale deployment —considering factors like capital costs, energy demands and land requirements — and cost-effectiveness, reflected in price per ton. Prices are influenced by operating expenses, capital costs, subsidies and market conditions that impact scalability.

comparing carbon removal technologies
Image: ClimeFi & Oliver Wyman

Biochar currently stands out as the most economical CDR technology to deploy, thanks to its moderate capex, low energy needs and mature readiness levels. Its low cost per ton and minimal operational expenses make it particularly suited for early adoption, albeit volumes are still limited. Biochar is constrained by feedstock availability and dependencies, which may limit deployment in regions without abundant biomass resources.

On the other hand, DAC and BECCS face greater deployment challenges due to high capex requirements, energy demands and access to geological storage. While DAC has a minimal land footprint, its affordability will depend heavily on advancing along the technological learning curve and significantly scaling up production compared to current volumes.

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Biochar and ERW lead in effectiveness for near-term carbon removal

The effectiveness of a CDR technology varies. Metrics such as net carbon efficiency (the amount of CO₂ removed relative to energy and resource inputs), durability (permanence of the CO₂ storage and reversal risk), scalability (the ease of expanding to capture larger CO₂ volumes) and MRV readiness certifications (ensuring accurate measurement and verification of carbon removed) are each critical for evaluating a technology's impact.

Here's how these factors compare across CDR pathways.

[1] A ratio of the volume of carbon removed to the carbon footprint of the technology. Data ranges collected by ClimeFi based on current and expected Lifecycle Emissions for the period 2024-2030.
[1] A ratio of the volume of carbon removed to the carbon footprint of the technology. Data ranges collected by ClimeFi based on current and expected Lifecycle Emissions for the period 2024-2030. Image: ClimeFi & Oliver Wyman

Biochar and ERW lead in net carbon efficiency, with biochar being the most mature — making it the most effective technology for near-term deployment.

DAC and BECCS excel in durability due to their secure storage methods but face significant barriers to scaling, including high costs and resource dependencies. Addressing these scaling challenges will be crucial to unlocking their potential for increased secure carbon removal.

Unlocking deployment and scaling

To scale CDR technologies, three key avenues can help foster growth: robust policy and financial support, technological innovation and cross-sector collaboration.

First, governments should leverage tools like long-term subsidies, tax credits, compliance schemes and other market incentives to reduce the high capital and operational costs of deploying CDR projects. Policies like the US 45Q tax credit and carbon pricing mechanisms can de-risk investments, making these technologies more accessible to private sector players.

Second, accelerating innovation is critical to improving the efficiency and cost-effectiveness of CDR technologies. Advances in energy-efficient direct air capture, sustainable biomass sourcing for BECCS and cost reductions in enhanced rock weathering can unlock scalability.

Finally, collaboration between industries and sectors is key to building sustainable supply chains and market demand. Partnerships between agriculture, energy and forestry can ensure a steady supply of feedstocks for biochar and BECCS, while corporate commitments to offtake agreements provide reliable revenue streams for DAC and other engineered solutions that have higher upfront costs.

For more on market dynamics, pricing and offtake structures for CDR technologies, read the upcoming Carbon Removal Offtakes: Scaling Technologies and Markets for Net Zero from the First Movers Coalition, in partnership with Oliver Wyman and ClimeFi, launching soon.

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