Carbon dioxide removal (CDR) technologies are required at a scale of 6 to 7 GtCO2 annually by mid-century to meet international climate goals. The UK is a leading actor in the development of CDR, and its private sector is a global leader in financial innovation and investment. To meet net zero emissions by 2050, the UK needs a thriving CDR sector generating 83 to 169 MtCO2 of negative emissions annually, starting from an almost non-existent baseline. In the next two decades, this immense scale-up will require mobilizing tens of billions in private capital for this nascent sector and novel asset class.
In this science talk, Dr. Mark Workman will highlight how the cash flow of five carbon dioxide removal business models was projected over a fifteen-year period. Their investment performance under different policy support scenarios was assessed using Discounted Cash Flow analysis. He will examine current UK CDR policy proposals, including integration into the UK Emissions Trading Scheme (ETS) – a market-based system for reducing greenhouse gas emissions – and government-issued carbon Contracts for Difference. Dr. Workman will argue that the risk-adjusted returns under these policies are unlikely to incentivize significant private sector investment. He will demonstrate how public-private collaborations (PPCs), currently overlooked as a scaling mechanism for CDR, can be highly effective in attracting private-sector investment. This approach offers a pathway to reduce the capital risk for the remaining portion of the UK's multi-MtCO2 negative emission portfolio, facilitating the attraction of a wider range of investors and reducing the cost of achieving net zero in the UK.
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Speaker
Dr. Mark Workman
Lead, Strategic Foresight for Net-Zero Transitions
