Boston Consulting Group (BCG) and Deutscher Verband für negative Emissionen (DVNE) published a new report, highlighting pathways for scaling durable carbon dioxide removal (CDR) in Germany and in Europe.
Besides being a key decarbonization tool, CDR also presents a substantial economic growth opportunity, with experts claiming that by 2050 the field could grow to be a global trillion-dollar industry.
For Germany to tap into this economic opportunity, the report notes that the country will need to allocate targeted investments to scale CDR.
Specifically, to reach net zero by 2045, Germany will need to remove 49–229 Mt CO₂e annually, and this vision will require ~$7B (€6B) in total capital investment by 2030 and ~$105B (€90B) by 2045.
The investments need to support the scale-up of a broader portfolio of CDR technologies, including, among others, nature-based solutions, BECCS, DACCS, biochar, and enhanced rock weathering.
Governments can use public policy to address the four major obstacles to scaling CDR: limited demand, high costs, investment risks, and slow permitting. A solid policy framework needs to include a long-term vision, financing instruments, and key enablers.
Integrating CDR in the EU Emissions Trading System (ETS) is a reliable tool for unlocking large-scale demand for permanent CO₂ removal, and in the future, the EU could favor the inclusion of only high-permanence, CRCF-aligned, and EU-based CDR in ETS Phase V (from 2031).
In that regard, the report by BCG and DVNE calls for a phased high-permanence integration that would gradually consider new CDR approaches as they improve measurement, verification, and permanence.
For Germany, the scaling of CDR will require a structured national support framework that will contain public procurement to catalyze demand and decarbonize public institutions. It should also include one-time grants for emerging CDR projects and carbon contracts for difference to make large-scale, permanent CDR investable.
Relevant: Germany Includes CDR In Its New Federal Budget Proposal
The country should seize the current legislative period to finalize the Langfriststrategie Negativemissionen (LNe), approve vital CO₂ capture and storage legislation, and put into action tailored funding schemes.
Failing to do these steps puts Germany at risk of falling behind other regions and missing its chance to emerge as a global leader in this climate-tech field.
Read more: Germany Secures EU Approval For $5.4B Carbon Reduction Scheme
