The process of carbon removal - also known as negative emissions - is an essential part of achieving net zero and eventually net negative emissions, both to offset the most persistent remaining emissions, and eventually to bring back down the concentration of CO2 in the air to more sustainable levels. Lessons from fracking show a need for dedicated CDR governance and regulation incorporating an anticipatory approach - one which is inclusive, proactive and innovative.

Mark

Miriam

Stephen

Lessons from Fracking: The need for dedicated CDR governance and regulation incorporating an anticipatory approach - one which is inclusive, proactive and innovative.
In a series of previous blogs, we highlighted the extent to which the UK carbon removal sector needed to develop and scale by orders of magnitude - as well as the need to <a href="https://illuminem.com/energyvoices/dfaab5a2-c29b-4d15-9c41-f5bbf58cb774">bring society together</a> to manage amongst other issues the <a href="https://illuminem.com/energyvoices/34df1c5b-47f0-446b-8e7b-18aca7b3ff2a">potential for market transition risk</a>.
This process of carbon removal - also known as negative emissions - is an essential part of achieving net zero and eventually net negative emissions, both to offset the most persistent remaining emissions, and eventually to bring back down the concentration of CO2 in the air to more sustainable levels.
In a <a href="https://authors.elsevier.com/c/1fCxp7tZ6ZxR3K">paper published</a> last week colleagues explored how the technology and processes associated with fracking for the production of shale gas were introduced to the UK 10 years ago. We analysed lessons relevant to the establishment and governance of CDR in the coming decades. Fracking was `rolled-out’ in the Lancashire region in a top down manner, by-passing the communities where the technology would be deployed in any decision making role or even input, and chose to retro-fit existing conventional oil and gas regulatory mechanisms to the new technology. The UK’s favourable shale gas potential started to be explored by Cuadrilla Resources in 2011 but earth tremors halted exploration on multiple occasions whilst these were investigated. With limited community engagement, poor transparency and a breakdown in trust increased local opposition and resulted in Cuadrilla abandoning its plans in February 2022.
This has important lessons as a function of the speed with which CDR needs to be deployed. In the UK, it will be a new set of never-been-deployed technologies which will make up an infrastructure sector the size of the water industry in 28 years. At such a scale it will have to be retrofitted into existing communities and networks. This will invariably open up a whole set of intricate, subtle and complex issues - such as a fragmented regulatory landscape, local cultures and multi-sectoral practices, some of which will likely be conflicting. CDR’s impacts and governance processes will be uncertain, untested and highly emergent.
The work that we have been undertaking at the Carbon Removal Centre has emphasised that the UK needs to build a high integrity carbon removal sector from the bottom up - in a way in which all voices are heard, and the results benefit everyone. This will enable the technical development of CDR systems and their associated value chains to co-evolve with socio-political aspects, to create the appropriate enabling environment for CDR to diffuse and scale. So how do you develop an effective approach for new technologies such as CDR to deliver social acceptance based on building and retaining public trust?
The paper advocates two underpinning tenets. The first is the adherence to the Aarhus Convention (UNECE Convention on Access to Information, Public Participation in Decision Making, and Access to Justice in Environmental matters) and the good governance principles<a href="https://imperiallondon-my.sharepoint.com/personal/mw807_ic_ac_uk/Documents/4.4.12%20Anticipatory%20Regulation/Anticipatory%20Regulation%20Paper_2021/Blog%20-%20Lessons%20from%20Fracking%20for%20CDR%20Governance_120622.docx#_ftn1">[1]</a> which, as the table extracted from the research highlights, were not adhered to in Lancashire during the development of fracking. The second is the need to adopt an Anticipatory Regulation approach<a href="https://imperiallondon-my.sharepoint.com/personal/mw807_ic_ac_uk/Documents/4.4.12%20Anticipatory%20Regulation/Anticipatory%20Regulation%20Paper_2021/Blog%20-%20Lessons%20from%20Fracking%20for%20CDR%20Governance_120622.docx#_ftn2">[2]</a> i.e., develop a future-facing governance framework for CDR. The figure below from Nesta’s work on this topic identifies three different roles for the regulator, based on the appropriateness of existing regulation for the management of new technologies. These include an:
<img src="https://illuminem.b-cdn.net/articlebody/a29bf855671cb5eb70dd34dbd92a811e6823c537.png" alt="undefined">
<ul><li>Advisory role, where new products are introduced and need testing against existing regulations. While the product may be new, its impacts are expected to be short-term with fewer uncertainties.</li></ul>
<ul><li>Adaptive approaches are appropriate when the regulatory bodies hope to encourage development of new products, but existing regulatory frameworks need adaptation.</li></ul>
<ul><li>For technologies that are still in development or emergent, and their potential longer-term impacts more substantive, an anticipatory role is proposed. Here existing regulatory frameworks become harder to apply as the impacts are either unknown, or there is incomplete evidence. Rather than the regulator acting as a gatekeeper to innovation by ensuring adherence to regulatory requirements, with supply and demand characteristics (i.e., where market service and needs gaps in existing regulatory constructs - the demand - are identified by innovators who then supply the value proposition which is vetted by the regulator) - the anticipatory approach to regulation is based on flexible and iterative co-development and partnership between regulators, policymakers and innovators.</li></ul>
<img src="https://illuminem.b-cdn.net/articlebody/76e31b68e78c96188e27d37c1a6ac8a0e7a4a4f2.png" alt="undefined">
The research found that the current governance frameworks make little provision for engaging stakeholders in the planning and development of CDR. The table below describes the key elements critical for developing Anticipatory Regulation and their compliance with the Aarhus Convention and good governance principles, and highlights the lessons drawn from the experience with fracking relevant to GGR regulation.
<img src="https://illuminem.b-cdn.net/articlebody/d59bb982c384b026362c92e1dd6ec21d312bad7c.png" alt="undefined">

<img src="https://illuminem.b-cdn.net/articlebody/306e803400c1830e956ecd794c1e8cc1553719d2.png" alt="undefined">
<img src="https://illuminem.b-cdn.net/articlebody/7e5827295ab24f953877280fdaf055c8be652ba5.png" alt="undefined">
<img src="https://illuminem.b-cdn.net/articlebody/59325ddbf5f5108f18fcc6650caecd3e06b670cd.png" alt="undefined">
The study therefore emphasises a number of lessons for the development of CDR in the UK:
<ul><li>The need for specific governance to be generated for CDR rather than retro-fitting existing mechanisms;</li></ul>
<ul><li>Where new technologies or practices are deployed, such as fracking and CDR, the knowledge and understanding of the impacts - a fundamental principle of good governance - may be less certain or more contested;</li></ul>
<ul><li>To gain social acceptance at the local level, deployment of CDR technologies needs to be evaluated from a variety of framings and viewpoints;</li></ul>
<ul><li>Early inclusion and participation of local communities would allow issues of concern to inform how trials are undertaken and regulation designed. This anticipatory and participatory approach fits with the principles of good governance and procedural justice, which can help build the trust needed to ensure social legitimacy leading to development and implementation of technological innovations.</li></ul>
In the UK much of the individual components of anticipatory regulation is already happening but it needs to be brought together - see this <a href="https://foresighttransitions.co.uk/wp-content/uploads/2020/07/ATKINS-ICL-5th-May-AR-C19-Webinar-200520-v4.pdf">link</a><a href="https://imperiallondon-my.sharepoint.com/personal/mw807_ic_ac_uk/Documents/4.4.12%20Anticipatory%20Regulation/Anticipatory%20Regulation%20Paper_2021/Blog%20-%20Lessons%20from%20Fracking%20for%20CDR%20Governance_120622.docx#_ftn3">[3]</a> - and the cultural hardwiring of embedding anticipatory constructs and principles of good governance will be fundamental by all leaders in all aspects of governance.
This won’t be easy: reality is messy, and the task is daunting. But bringing different actors together around shared societal goals is a crucial step.
Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Carbon Removal Governance: Lessons from fracking

This process of carbon removal - also known as negative emissions - is an essential part of achieving net zero and eventually net negative emissions, both to offset the most persistent remaining emissions, and eventually to bring back down the concentration of CO2 in the air to more sustainable levels.

<h2>The need for convening inclusive dialogues</h2>
In a previous <a href="https://illuminem.com/energyvoices/dfaab5a2-c29b-4d15-9c41-f5bbf58cb774">blog</a>, we highlighted the extent to which the UK carbon removal sector needed to develop and scale by orders of magnitude.
This process of carbon removal - also known as negative emissions - is an essential part of achieving net zero and eventually net negative emissions, both to offset the most persistent remaining emissions and eventually to bring back down the concentration of CO2 in the air to more sustainable levels.
A recent report <a href="https://coalitionfornegativeemissions.org/delivering-the-net-in-net-zero/">Delivering the 'Net' in 'Net Zero'</a> [1] by the Coalition for Negative Emissions highlighted the positive steps that are being taken by the UK actors to establish and realise a negative emissions sector along the lines of 3 pillars - as follows (p17 of report):
<ol>
<li>Voluntary market - a growing number of companies and investors are looking to buy carbon removal credits to meet their own Net Zero targets, many of which are as early as 2030.</li>
<li>Government-supported market - grant funding or long-term concessions will underpin early negative emissions investment where the negative emissions price alone is not high enough to underpin investment; and</li>
<li>Regulated/compliance market - as negative emissions become accepted in regulation as an additional method through which companies can meet their emission reductions targets faster or compensate for emissions that are impossible to remove.</li>
</ol>
The report paints a very positivist perspective as to the relationship between the three `pillars&rsquo; in how they are mutually reinforcing and `virtuous&rsquo;. It anticipates that the voluntary sector, which will potentially develop to a $30 to 50B market by 2030, will develop standards that can be incorporated into the regulated sector. The UK government-supported projects will create a supply of negative emissions for investors - up to 5 million tonnes of carbon dioxide per year from the atmosphere by 2030. It aims to grow this amount to 23 million tonnes by 2035. This will perpetuate scale to reduce costs and therefore private sector risk, reducing the dependency on a government-supported market.
At the Carbon Removal Centre, we have been closely engaged with entrepreneurs and activists in the space who have led us to consider the following counter-narratives.
Firstly, the fact that for corporates interest in CDR is not purely a climate play [2]. While climate and sustainability objectives have increasing weight in corporate decision-making, these sit within the broader fiduciary duty of corporate directors to ensure a company's success - especially in providing returns to shareholders. This, therefore, incentivises the motivation to realise climate targets as cheaply as possible.
Secondly, the willingness of corporates to engage in the voluntary sector is based on the balance of risk of not doing so. Should corporates lose confidence in engaging in the sector as a function of civil society advocacy causing brand or reputational damage then the broader willingness of the private sector and as demonstrated in the past for governments to support the sector can also rapidly evaporate [3].
<h2>Impact on the carbon market</h2>
So how do these tensions sit in the nascent negative emissions offset market? Early signs are that the quality of negative emissions offsets in the voluntary sector are highly variable - as per the following observations from two early movers - namely Microsoft and Stripe [4]:
<ul>
<li>Microsoft received 189 proposals offering 154 MtCO2 - only 55 MtCO2 were available immediately, and a mere 2 MtCO2 met Microsoft&rsquo;s criteria for high-quality CO2 removal. They&hellip;..chose to purchase from 15 suppliers representing more than 1.3 million metric tons of carbon removal (MtCO2) - see figure opposite.</li>
</ul>
<ul>
<li>Stripe&rsquo;s 47 carbon-removal proposals amounted to 16 MtCO2, but only 0.024 MtCO2 met the company&rsquo;s requirement that carbon remain sequestered for at least 1,000 years - see figure opposite.</li>
</ul>
<ul>
<li>On average, in the pitches that Stripe received, biosphere-based storage projects cost only $16 per tonne of CO2 (tCO2), whereas geosphere-based storage costs, on average, $141 per tCO2 ($20&ndash;10,000 per tCO2)</li>
</ul>
<img src="https://illuminem.b-cdn.net/articlebody/d043c73b83a4a1e1b1329db77c4d631535c1126f.png" alt="undefined" />
Both Microsoft and Stripe have very strict standards - basing their choices on specific criteria including clarity of carbon accounting, additionality, durability, potential leakage, and other environmental and social considerations. These are unlikely to be the norm for all actors operating in the voluntary market. With such a range of quality and standards - in a market which the private sector is both stimulating supply and calling on demand - all of whom are seeking a return for profit and/or return of value to shareholders. In the absence of oversight and transparent compliance mechanisms - where the credibility of offsets is called into question - will likely result in one of two outcomes.
One where the credibility of the voluntary sector is called out before the establishment of the regulated sector and the other where the credibility of the voluntary sector is called out as a function of the development of the regulated sector. In either case a complete collapse in credibility of the voluntary market with regards to price, legacy offsets and the credible realisation of net zero targets might be a very real outcome. In the case of the former the additional impact will be that the negative emissions off-set market might collapse before it is even regulated and scaled. This could lead to a long delay in government commitments, certainly from funded projects to regulated market i.e. from grants to ETS compliance or similar.
The extent of risks, therefore, loops back to and reinforces the concluding section of the previous blog:
We need to recognise that, unlike the renewable energy transition, substantive and multi-billion corporate engagement in this space is running far ahead of coordinated government action. This means corporate engagement and voluntary standards are setting the shape and tone of the CDR debate. More will be learned by doing than can be worked out in the policy process. This will have negative effects as well as positive ones.
<h2>What does this mean?</h2>
This means there is an urgent need to build an independent and impartial convening safe space which is inclusive which can build trust and knowledge for all actors who are seeking to engage in the negative emissions sector as the sector transitions from a voluntary based to a regulated sector. Based on our research there is a need to:
<ul>
<li>Guide and bring together companies and civil society groups to address knowledge gaps around large-scale carbon removal, to inform better governance and practice;</li>
</ul>
<ul>
<li>Establish how to deliver high integrity solutions in a way that deals with uncertainty, manages risk, and supports just, equitable and sustainable climate action; and</li>
</ul>
<ul>
<li>Assist organisations explore the landscape, to envision their unique role within it, and to engage with other key participants for better results.</li>
</ul>
In short, the UK needs to build a high integrity carbon removal sector from the bottom up - in a way in which all voices are heard, and the results benefit everyone.
This won&rsquo;t be easy: reality is messy, and the task is daunting. But bringing different actors together around shared societal goals is a crucial first step.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.
<h3>Footnotes</h3>
[1] Coalition for Negative Emission 2022 - <a href="https://coalitionfornegativeemissions.org/wp-content/uploads/2022/04/CNE-Paper-2.1-Format-v6-final-Updated_With-IMAGES-V4.pdf">Delivering the &lsquo;Net&rsquo; in Net Zero</a>​.
​[2] Battersby et al 2022 - <a href="https://www.frontiersin.org/articles/10.3389/fclim.2022.686762/full">The Role of Corporates in Governing Carbon Dioxide Removal</a>: Outlining a Research Agenda.
​[3] Department for Transport 2010 - <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/307127/pir-summary-response.pdf">Post-Implementation Review of the Renewable Transport Fuels Obligation</a>: Summary of Responses and Government Response.
[4] Joppa et al., 2021. Microsoft&rsquo;s million-tonne CO2-removal purchase - lessons for net zero In Nature Vol 597 30 September 2021.

Carbon dioxide removal (CDR) market transition risk

In October 2021, the UK pledged to start removing at least 5 million tonnes of carbon dioxide per year from the atmosphere by 2030. It aims to grow this amount to 23 million tonnes by 2035, and to more than 60 million tonnes by 2050.

In October 2021, the UK pledged to start removing at least 5 million tonnes of carbon dioxide per year from the atmosphere by 2030.
It aims to grow this amount to 23 million tonnes by 2035, and to more than 60 million tonnes by 2050.
This process of carbon removal - also known as negative emissions - is an essential part of achieving net zero and eventually net negative emissions, both to offset the most persistent remaining emissions, and eventually to bring back down the concentration of CO2 in the air to more sustainable levels.
But this scale-up poses an enormous challenge and would entail one of the fastest ramp-ups of a new industry in recent history. To put it in context, the UK in 2020 emitted well over 300 million tonnes of CO2, and currently removes less than half a kilotonne.
A 10,000-fold scale-up by 2030 would require the coordinated engagement of first movers to create at least one entire new value chain built around carbon removal. This is no small task.
A 120,000-fold scale-up by 2050 would require the integration of multiple carbon removal value chains. It would also entail substantive societal engagement to ensure this work benefits everyone - in a way that is just, sustainable and equitable - with a genuine impact on the climate.
To put it simply, carbon removal can be done well, and it can be done badly. Doing it well requires building safeguards, monitoring and constant consultation to ensure it has the impact society wants. This is what we call &lsquo;high integrity carbon removal&rsquo; - and for the moment benchmarks that define it do not exist.
We began this process by convening experts from across the economy, to help understand the financial and non-financial barriers to establishing a thriving and high-integrity carbon removal sector in the UK.
Over the past two years, we engaged with more than 100 policymakers, innovators, investors, and environmental and civil society groups, and posed questions around the three tenets of human-centered design: financial viability, technical feasibility, and social desirability. Its findings are outlined in a newly published study, <a href="https://authors.elsevier.com/a/1eWVV7tZ6ZxQf4">Establishing a large-scale Greenhouse Gas Removal sector in the United Kingdom by 2030: First mover dilemmas</a>.
<h2>How financially viable is carbon removal for first movers?</h2>
The first question was to establish whether there is a viable carbon removal sector on offer for businesses to make money from.
To do this we co-generated a number of scenarios with participants and identified up to &pound;1.8 bn of carbon removal revenue opportunities by 2050 for a number of business models that would service the aviation sector. This augments a further &pound;39 bn of revenue opportunities that business models servicing the electricity sector might access already identified by other studies. [1]
Of course, this number is dependent on a number of variables. For example, how readily available will sustainable biomass be? Will carbon credits be available for carbon removal negative emissions offsets?
<h2>How technically and regulatorily feasible is it for first movers to build a UK carbon removal sector?</h2>
Carbon removal technologies vary considerably in terms of their readiness - and there is a need for considerable support to advance technological innovation and diffusion.
There is also uncertainty around the policy, regulatory, and governance frameworks that first movers face in the UK. For example, can they access the emissions trading mechanisms and will there be financial opportunities for the co-benefits of carbon removal technology value chains - such as soil regeneration and flood prevention?
What has become clear is that there is a need for much greater coordination within the government. Achieving this will require a new convening body - a centre of excellence - to be established, which can develop objective integrated frameworks and bring together and realise critical mass for the currently fragmented actors required to address carbon removal governance processes.
<h2>How socially desirable is it to build a new carbon removal sector in the UK?</h2>
For the moment, there is considerable uncertainty in civil society as to whether building a UK carbon removal sector is a good idea. What will the impacts be for jobs and incomes? How can society avoid corporate greenwashing? How can solutions be found that also support other goals, such as restoring ecosystems and protecting biodiversity?
The reality is that the UK does not yet have the tools to answer these questions. To help this process, we found a number of areas which need work:
<ul>
<li>Confidence and credibility: Affordable and accurate tools to measure, report and verify CO2 concentrations and emissions in varying conditions are fundamental in facilitating market creation.</li>
</ul>
<ul>
<li>Economic opportunity and shared value creation: The narrative around carbon removal market creation should focus on shared value creation or Gross Value Added (GVA) to the economy and society.</li>
</ul>
<ul>
<li>Re-thinking policy: The scale of challenges we face requires constantly evolving innovations, but policy mechanisms sometimes can be outdated for current needs.</li>
</ul>
<ul>
<li>Public engagement: Policymakers and the public need to develop a closer relationship; policy mechanisms can educate the public and drive participation, while public acceptance can provide confidence to governing bodies.</li>
</ul>
<ul>
<li>Impartial advice and mediation: There is a need for an independent body to act as a hub for shared knowledge, innovation and a platform for constructive dialogue.</li>
</ul>
<h2>What is next?</h2>
Overall, we found that the creation of a UK carbon removal sector represents a multi-billion pound opportunity for businesses in 2050. At the same time, the lack of a coherent policy and governance environment means that first movers face too much risk and uncertainty to commit substantive investments. It was also clear that purely techno-centric approaches are inadequate to address all the stakeholders that need to be brought into the discourse to release an equitable, just and sustainable sector.
So how do we overcome this challenge? A crucial step is to build an independent and impartial convening safe space that is inclusive which can build trust and knowledge on all sides.&nbsp; Based on our research there is a need to:
<ul>
<li>Guide and bring together <a href="https://illuminem.com/energyvoices/accab4bb-1670-46f7-90d8-45c1b7698a48">companies </a>and civil society groups to address knowledge gaps around large-scale carbon removal, to inform better governance and practice;</li>
</ul>
<ul>
<li>Establish how to deliver high integrity solutions in a way that deals with uncertainty, manages risk, and supports just, equitable and sustainable climate action; and</li>
</ul>
<ul>
<li>Assist organisations to explore the landscape, envision their unique role within it, and engage with other key participants for better results.</li>
</ul>
In short, the UK needs to build a high-integrity carbon removal sector from the bottom up - in a way in which all voices are heard, and the results benefit everyone.
This won&rsquo;t be easy: reality is messy, and the task is daunting. But bringing different actors together around shared societal&nbsp;goals is a crucial first step.
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.
<h3>Footnotes</h3>
[1] Platt, Devon, Mark Workman, and Stephen Hall. 2018. &lsquo;A Novel Approach to Assessing the Commercial Opportunities for Greenhouse Gas Removal Technology Value Chains: Developing the Case for a Negative Emissions Credit in the UK&rsquo;. Journal of Cleaner Production 203 (December): 1003&ndash;18. <a href="https://doi.org/10.1016/j.jclepro.2018.08.291">https://doi.org/10.1016/j.jclepro.2018.08.291</a>.

You can’t miss it!

Mark Workman

Mark Workman

Carbon Removal Governance: Lessons from fracking

Recent publications

Readers also like

Want to know more about illuminem Voices?