Is "What is CDR?" the wrong question?

The debate on CDR accounting just got a significant upgrade with the article ‘What is CDR?’ is the wrong question published by Carbon Plan written by Freya Chay and Zeke Hausfather. It’s the most insightful piece I’ve read on the topic. Their bottom line is that “it’s not possible to establish a simple definition of CDR that reliably sorts projects worthy of investment from those that are not.”

As they correctly point out, CDR’s unique value lies in its future roles, not its current emissions impact. Anyone trying to help advance CDR should look at how they can best help it become maximally beneficial in the future. Some approaches are more support-worthy than others.

This strongly aligns with the thinking of the Milkywire Climate Transformation Fund. We recently published our strategy for catalytic CDR purchasing. We are not trying to maximise the number of tonnes removed today, but focus on high-impact opportunities that push the industry forward and unlock long-term climate solutions. This is a mindset we share with Frontier and some other early durable CDR buyers.

However, as much as I would wish for the opposite, I strongly suspect many in the next broader wave of CDR buyers will focus on buying the cheapest tonnes available that still meet recognised standards, not taking a catalytic focus.

Optimal vs. allowed

There’s a difference between defining the optimal CDR investment approach and setting realistic standards for what should be permitted in markets. Carbon Plans article and our Milkywire strategy talk about what's optimal. For that discussion, “What is CDR” is indeed not the most relevant question. The four questions presented in the carbon plan article are spot on to identify the most useful CDR investments.

But when discussing what credits should be allowed to be issued and what credits should be permitted to be used when making net zero claims or in compliance schemes, the question “What is CDR?” becomes very relevant.

When deciding how carbon removal credits are generated, we should not create rules that exclude promising CDR alternatives just because they are part of net-emitting supply chains or use legacy materials.

The Absolute Carbon Standard (ACS) by Absolute Climate is an example of such a framework. Some of the debate over CDR accounting in the last year has been about whether such an approach should become mandated for all CDR credits. ACS differ from current standards by not using baselines or narrow project boundaries. Instead, they use a wide accounting view, mapping out all emissions connected to an activity to provide total coverage of carbon streams.

Wide accounting standards only, would make net zero harder

While it fills a role in the ecosystem, we should not demand strict “wide accounting” of all standards. This would risk leading to suboptimal use of resources, excluding some very promising CDR pathways, making net zero goals more expensive to achieve.

Under a strict wide accounting standard, projects using waste resources to remove carbon would need to account for all the emissions connected to the production of those resources, regardless of whether the implementation of the CDR project affects those emissions or not. That means such projects either would be unable to produce negative emissions due to the legacy emissions connected to the activity, or the negative emissions would be prohibitively expensive.

An example is a project that utilises old mine tailings or steel slag by exposing the minerals to atmospheric CO₂, thereby accelerating natural carbonation processes that permanently store carbon. Under a wide accounting standard, these projects would need to account for all the emissions associated with the original mining or steel production activities that generated the tailings or slag, even though the carbon removal action does not influence those past emissions.

Another example could be CO₂ capture of biogenic emissions from whisky distilleries. Here biogenic CO₂ released during fermentation is captured and stored. The distilleries operate independently of the carbon capture project and would emit the CO₂ regardless. Under a wide accounting standard, such a CDR project would be required to include all emissions from the whisky production process and the cultivation of feedstock in its life-cycle assessment, even if the CDR project does not impact these emissions.

Another way of explaining the wide accounting position is that only the industry from which the waste resources originate should be able to use the negative emissions produced. For example, a mine tailings or whisky distillery project could produce negative emissions, but only actors in the mining or whisky supply chain could use those negative emissions.

This risks leaving these valuable waste resources unused for climate purposes. It is not likely that the mining or whisky industry would choose to pay to use their waste resources to offset their emissions as it would be cheaper for them to reduce emissions instead. And if they did, it would not be positive, as these industries should prioritise decarbonise primarily through electrification of their heavy machinery and transports. It would be a suboptimal use of resources if they continue to use fossil fuels and instead reach net zero through their own negative emissions.

Carbon standards need to make sure that only real carbon removal is credited while not being so strict it excludes valuable pathways. It is not a black-and-white issue of using ‘wide accounting’ or not, and there is room for subjectivity. For example, in one BECCS methodology, narrow project accounting is allowed on existing facilities, but new facilities that are built with BECCS in mind need to use wide accounting.

Ideally, everyone would only invest in the most forward-looking CDR pathways. In practice, most buyers will prioritise what’s allowed and affordable. If strict ‘wide accounting’ frameworks are the only option, we would risk excluding valuable projects. Carbon Plan rightly calls out that no single definition can do all the work for us. Striking the right balance is the big challenge, but ‘What is CDR?’ is a question that cannot be dodged.

This article is also published on Marginal Carbon. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.