“The Areas Where I Operate – Markets, Removals, Carbon Capture – Are All Growing In Importance”– Eve Tamme, Climate Principles

"The Areas Where I Operate – Markets, Removals, Carbon Capture – Are All Growing In Importance"– Eve Tamme, Climate Principles - Carbon Herald
Eve Tamme, Climate Principles. Image: evetamme.com

At first glance the worlds of carbon capture, CO2 removal and the various carbon markets might appear distinct and independent. The relationships between them aren’t immediately obvious but there are some specialists who are able to draw the lines that connect all three and climate policy advisor Eve Tamme is one of them.

We spoke with her about the synergies between these technologies and market mechanisms, as well as the likely next stages in their development and the role they will play in global decarbonisation.

You are one of the few specialists working on three aspects of the carbon industry – carbon markets, carbon capture and storage (CCS) and carbon dioxide removal (CDR). Do you think they will continue coming closer together and in which particular areas do you think they will overlap more?

Carbon markets are a policy tool. It’s a carbon pricing mechanism that can help get CCS and CDR projects off the ground.

CCS is a set of climate technologies enabling emission reductions and CDR. There is also another relationship between CCS and CDR – the more industrial and fossil emissions we capture, the less CDR will be needed.

And CDR is that complementary, less known, but crucial part of climate change mitigation next to emission reductions: drawing carbon dioxide out of the atmosphere. It is what puts the “net” in net zero.

I’ve specialised in these three areas because of my expertise and the continuously exciting policy developments. There are significant synergies between the three that continue to strengthen. The role of CDR will keep growing in carbon markets, and the role of carbon pricing will continue to grow to create a business case for CCS.

When I established my advisory a couple of years ago, I assumed I would be working on three very niche topics, but I chose to do that because this is what I love. It has been astonishing to see how much the interest in these areas has grown, how much policy progress there has been in practice, and the broad impact my expertise can have. My knowledge is mainly sought after because I have a deep understanding of all three areas, which is not easy to come by.

What are the biggest challenges and roadblocks in terms of legislation of CDR and CCS (both from EU and UN perspectives)?

The first and foremost is political will. Without this, legislation is not developed, projects are not supported, and progress doesn’t happen. The political will is directly tied to understanding among policymakers on the role of CCS and CDR in climate change mitigation. 

Both are essentially entailing waste management – the waste being carbon dioxide. Without rules and regulations, there is no inherent business case to get the projects up and running.

CCS projects are large, expensive, complex, and involve many entities. Several things will need to come together simultaneously – carbon pricing or subsidies to create the business case, permitting, transport and storage development and availability, measures to address liability, and measures to address counterparty risk, to name a few. The policy frameworks and regulations must be comprehensive enough to cover everything essential. The idea that only carbon price is enough to make these projects happen is naïve. That is why the EU’s Industrial Carbon Management Strategy includes an extensive list of initiatives, although yet to be implemented in practice.

The Inside Climate Policy blog. Image: evetamme.com

Whilst CCS has been part of the decarbonisation picture for decades, CDR emerged to most stakeholders with the proliferation of net-zero targets. CDR is inherently part of climate change mitigation, including the Paris Agreement, but references to it are much less explicit than what is needed for progress.

Most of the CDR-specific legislation – aside from afforestation, reforestation and soil carbon sequestration – is still in development, the EU’s Carbon Removal Certification being a case in point. Compared to CCS, many CDR activities face several challenges around carbon accounting that still need to be tackled, some on the IPCC level. So, there is slow and constant progress on CDR, but there is still a long road ahead.

Going a bit deeper on carbon removals – what are your thoughts on the European Commission’s Carbon Removal Certification Framework? What are its strong points and potential flaws?

This is an excellent moment to reflect because it’s not a proposal anymore. We already have a provisional agreement on the legal text.

It is the world’s first, and that is a significant development. The EU has taken on the task of quantifying and certifying quality removals, and this will no doubt serve many other jurisdictions as a helpful example. It finally also includes novel removals in the climate policy matrix, which was long overdue.

I’m not thrilled that it’s not a pure-play removals framework but also includes soil emission reductions from carbon farming. At least the envisaged unit types are distinct, which should help mitigate the confusion between removals and reductions.

My biggest surprise was that all removals and emission reductions under this framework must contribute to the EU’s climate objectives and Nationally Determined Contribution (NDC) – its climate pledge under the Paris Agreement. This seems to leave out many novel removals, which can’t be accounted towards EU’s climate targets today. That was not the goal of this regulation when it was drafted and negotiated. How will the intent and final language be reconciled so that all removal activities, even those outside the targets, can benefit from the framework?

Compared to other climate mitigation activities (think decarbonising transport, energy efficiency improvements, and most other sectors), the EU’s carbon removal policy for now is mainly centred around the concept of carbon crediting. Eventually, there must be a solution where removal activities are not exclusively project-based and can be appropriately accounted for in national greenhouse gas inventories.

Switching to CCS – it has many opponents because of its affiliation with the oil industry but proponents argue that it can be one of the most efficient approaches towards decarbonisation. What do you think the role of CCS will be in the next few decades when it comes to cutting emissions? 

CCS has three parts – capture, transport and storage of CO2. The expertise of the Oil & Gas industry is primarily relevant to storage, as these companies have decades-long experience in subsurface operations. And it makes perfect sense to use that. For example, the EU’s Net Zero Industry Act establishes a clear role for the oil and gas producers to contribute to the EU’s CO2 injection capacity.

Meanwhile, the CCS value chain is becoming more diverse and new specialised players are entering the market. These are chemical and engineering companies providing CO2 capture solutions and infrastructure, shipping companies expanding their portfolio, and new companies focusing exclusively on CCS.

Relevant: Major Success For CCU: The Net Zero Industry Act Fully Recognizes CO2 Utilization As A Net Zero Technology

It’s often forgotten that a large part of the carbon capture should occur globally on industrial emitters, such as cement, steel, and chemicals. This is also the front and centre of the EU’s new Industrial Carbon Management Strategy.

CCS has a clear role in reducing emissions that can’t be tackled otherwise and enabling carbon removal via bioenergy with CCS and direct air capture with carbon storage. Most emission reductions will be delivered via renewables, energy efficiency and other solutions. But up to 10% will most likely need to be delivered via CCS. And without this, we’d be missing the climate targets. Hence, CCS is one crucial piece of the decarbonisation puzzle.

What are your thoughts on the current situation (and media coverage) of voluntary carbon markets and carbon offsets?

All the effort currently going into “fixing the market” is bound to have an impact, and a large number of experts are working under different international initiatives to make progress. 

However, it’s not only about getting the practical details in standards and methodologies right. Crucially, the credibility also depends on how the stakeholders in this fragmented market can communicate the change.

Getting the good news out there is challenging because bad news sells so much better. That’s a tough nut to crack. There needs to be a joint effort where the carbon market stakeholders come together with consistent messaging and communication plans to turn things around. We need news on the improvements and success stories that restore the trust in carbon markets.

Work on the UN’s Article 6 carbon markets mechanism is under way. What is the timeline for its development and do you think it will manage to develop into a fully-fledged market that unites all the variations of decarbonisation and CO2 removal?

Article 6 markets include both reductions and removals by design. And as we will (hopefully) go steeply down the reduction curve, the role of removals will start steadily growing. Eventually, carbon markets should become carbon removal markets.

However, that is many decades away. The results of COP28 on carbon markets (Article 6 of the Paris Agreement) were disappointing. The bilateral trading under Article 6.2 is already operational but focuses mainly on emission reductions. Article 6.4 Supervisory Body is determined to build on its existing work, but it remains to be seen if COP29 finally operationalises the Article 6.4 centralised mechanism with UN oversight.

I don’t expect to see a complete convergence of carbon markets where the voluntary markets, compliance markets and Article 6 become one. Each will have a role. There is an apparent convergence today between voluntary and Article 6 markets, which will continue. The longer the Article 6.4 mechanism takes to be established, the further the bilateral trading and its convergence with private standards evolves. 

The role of compliance schemes will no doubt increase because these have the necessary size to scale removals.

You have become involved in multiple projects in the last few years like Carbon Gap, the Zero Emissions Platform and your own consultancy Climate Principles. Do you think these are the boom times or is there actually even faster growth ahead for the carbon industry?

Indeed, I’m affiliated with several organisations – my own Climate Principles and also Puro.earth, Carbon Gap and Zero Emissions Platform (ZEP). I’m especially excited about the changes I’ve brought about at ZEP and the potential of this organisation to grow its impact.

I see through my advisory clients a clear and consistent acceleration in the interest in climate policy developments and outlook. The industry is continuously growing, new stakeholders are emerging, and there is an overall feeling of progress.

New and better policy frameworks are being prepared, and the share of global emissions covered by carbon pricing is growing. We’re seeing the emergence of new products across the board. That includes services for the carbon industry, tangible physical low-carbon products, and construction materials.

The areas where I operate – markets, removals, carbon capture – are all growing in importance. And that is aligned with what we need to see happen to have a chance to meet the Paris Agreement temperature goal.

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