How governments can spur growth in the carbon removal industry

A 6-10Gts of carbon dioxide removal capacity every year is needed to align with net zero goals.

Governments and other stakeholders could work with the private sector to improve and scale up carbon dioxide removal (CDR) capacities, McKinsey reported. 

Citing data from the Smith School of Enterprise and the Environment’s The State of Carbon Dioxide Removal report, it was reported that 6-10 gigatonnes of carbon dioxide in annual CDR capacity is likely needed to align with the net-zero pathways under the Paris Agreement.

“This capacity could not be delivered quickly, however, so efforts would need to begin as soon as possible to ensure 2050 scenarios are achievable,” McKinsey noted, adding that some estimates require an additional 0.8-2.9 metric gigatonnes of carbon dioxide per year of removals capacity by 2030. 

To improve and scale up CDR technology, governments, along with philanthropists, and nongovernmental organisations may partner with the private sector to drive innovation. 

This may be through the incorporation of CDR into environmental, social, and governance (ESG), and carbon-accounting frameworks. 

Governments may also work on integrating CDR into cap-and-trade or carbon tax systems. 

“Governments and philanthropists could also consider directly funding early-stage technology development or designing innovative financing arrangements that may help catalyse further private investment.”