The UK government has released its response on engineered greenhouse gas removals (GGR), marking the most detailed policy response of its kind.
The 81-page document from the the Department for Energy Security and Net Zero team carefully analyzes the GGR Business Model and the ‘small but rapidly expanding’ sector that is engineered GGR and concludes that the sector offers major economic opportunities for the UK.
With that in mind, one of the key takeaways from the GGR Business Model Consultation is the confirmation that the government wishes to capitalize from the emerging sector and is prepared to ‘develop markets and incentives for GGRs’.
The need for policy support is also recognized in the government response in order to enable investment in Direct Air Capture and Storage (DACCS) and Bioenergy with Carbon Capture and Storage (BECCS) technologies.
Another important takeaway is the acceptance of a Negative Emissions Contract for Difference (CfD) model as optimal for the delivery of government’s policy objectives.
Investors are already familiar with this model from other low-carbon sectors, such as renewables and nuclear energy.
Furthermore, the document recognizes the need to also develop transport, storage and measurement, reporting and verification (MRV) standardization in order to become a global leader in carbon removals.
The government concludes that it will work together with the UK ETS Authority to consider options for integrating GGRs into the UK Emissions Trading Scheme ETS, which will further boost the development of a market and the large-scale adoption of carbon removal technologies.
With that said, the need to establish a transparent, high-integrity voluntary carbon market (VCM) in the UK also becomes apparent from the GGR Business Model Consultation with its critical role in driving funding towards carbon removal projects.