Cole Caswell: calculating carbon removal for corporate net zero plans

Published on www.cdr.fyi/calculator

By Cole Caswell, assisted by Robert Höglund. For CDR.fyi

Here we introduce a simple tool for calculating a removals schedule to act as an example for organizations that are planning their carbon dioxide removal (CDR) purchases.

Calculate annual CDR

Organizational CO2 Emissions (tonnes)

Background

Carbon dioxide removal will be required to limit the warming of the planet to 1.5˚C or 2˚C. In all likelihood, this will require many CDR methods. However, durable CDR methods that are capable of adequately storing carbon for centuries to millenia exist at a very small scale today and need to be scaled by ~1,300 times from ~2Mt today [1] to an average of 2.6Gt by 2050 when considering climate models with scenarios with <2˚C of warming [2]. To keep warming to 1.5˚C or 2˚C the amount of durable CDR that will be needed by mid-century is dependent on a number of factors, most notably the rate we reduce our GHG emissions, but it is typically estimated to be in the billions of tonnes. For the US alone, on Bloomberg’s recent podcast Zero: Carbon Removal’s Magic Number, Jenn Wilcox of the Department of Energy stated that the United States’ need for carbon removal might exceed 1Gt by 2050.

Regardless of the 2050 number, how we plan to get there is vitally important as scaling durable CDR will require the physical deployment of technologies and the creation of industries. Postponing deployment of such technologies risks relying on the technologies being developed at faster rates than we have ever seen other industrial technologies deployed at.

How we get there also matters when cumulative removals targets are embedded into climate models and goals. In a theoretical situation where CDR development is postponed to later years, it may not be possible to achieve the required cumulative removals.

Leading governments and corporations recognize that action must happen today for durable CDR to scale (e.g., US Department of Energy, Microsoft, Airbus and Shopify). Yet, there is a lack of guidance on what high-integrity durable CDR purchasing looks like when considering when and how much should be purchased. Carbon Gap’s Bridging the Ambition Gap Report also highlighted the issue stating “there is little guidance from trusted, third-party actors suggesting how companies can responsibly buy carbon removal credits.”

The purpose of this post is to introduce an easy to use tool to provide a framework for organizations determining when and how much CDR could be purchased (or done) on their path to net-zero. It aligns with third-party scaling scenarios that meet 1.5˚C and the 500Gt carbon budget that was set by the IPCC for 2020 onwards. For this, we build on the work of the Science Based Targets Initiative’s (SBTi) Net Zero Standard and Pathways to Net-Zero Paper. In a previous post, Cole shared global CDR scaling scenarios that align with the SBTi’s Pathways to Net-Zero Paper’s CDR targets and that can be found here.

This framework represents what ambitious and leading corporate adoption of CDR could look like in the absence of widespread organizational adoption. Leaders in this space such as Microsoft and Shopify appear to be already purchasing CDR that exceeds what their allotments would be under this framework. Others such as the Energy Transitions Commission (ETC) are calling for similar levels of support, as seen in Chapter 5 of the ETC’s Mind the Gap Report [3].

It must be noted that all pathways to 1.5˚C and 2˚C require significant and immediate emissions reductions.

Using the tool

How to use:

Setting the Boundary

The first step for an organization is to determine the organization’s GHG footprint. For this, we do the same as the SBTi who defer to the standards of the Greenhouse Gas Protocol (GHGP) to do the GHG emissions accounting. Like the SBTi, we emphasize the importance of accounting for an organization’s Scope 1, Scope 2 and Scope 3 emissions.

Inputting the organization’s 2022 CO2 emissions calculates an estimate of the required emissions reductions and populates a table with annual quantities of CDR that could be purchased (or done) to align with the global CDR scaling scenarios we’re using.

The tool is specific for a 2050 net-zero target and the CDR purchasing quantities will likely differ for net-zero commitments that precede 2050 as the organization will have to purchase CDR to neutralize residual emissions from their net-zero year onwards. Those neutralization activities could play a meaningful role in contributing to the organization’s cumulative CDR allocation.

The amount of CDR required is highly sensitive to cumulative GHG emissions. The SBTi-aligned CDR scaling scenarios must be paired with the emissions reductions pathway. We provide an illustrative SBTi CO2 emissions reduction pathway to help demonstrate the relationship between the two. In the illustrative scenario, the SBTi emissions reduction pathway results in ~3.5Gt of remaining CO2 emissions in 2050. This means that a 4Gt CDR scenario would be slightly carbon negative and a 2.5Gt CDR scenario would require another 1Gt of CO2 emissions reductions to reach net-zero. Therefore, organizations will have to customize their emissions and removals plans, making slight alterations to the numbers, if their primary objective is to reach a net-zero state.

It must be noted that this is the amount of CDR the average company would need to buy, but the capabilities to pay differ. If you are a company with a high profit per tonne, you should consider buying several times this amount. For reasoning about how recommendations could differ for sectors see Carbon Gap’s Who Can Pay for Carbon Removal. Furthermore, we would gladly receive feedback on how to incorporate a function to address ability to pay but have decided on simplicity for the first version.

Methodology

By itself, this tool is imperfect as it is difficult to address some of the complications in this field (e.g., sectoral differences, GHG emission types, an organization’s ability and willingness to pay and the characteristics of CDR). Here we try to balance complexity and simplicity. Every organization will have different factors at play, but a more complex framework is less likely to be understood, especially in this first version. Swiss Re’s guideline of “do your best, remove the rest” [4] is effective because it’s simple and catchy. The SBTi is successful by making climate simpler and easier to apply to for organizations with scientific backing.

The methodology is comprised of four key elements:

Element 1 – CO2 Emissions Only

Note that this is for CO2 emissions and durable CDR only. This is to keep the tool relatively simple as best practice for addressing other GHG emissions is changing. Focusing solely on CO2 is also aligned with the IPCC’s 500Gt carbon budget (i.e., not CO2e). This is not to suggest that other GHG emissions can be ignored as they must also be significantly reduced. Only durable CDR is used because it can store CO2 for as long as CO2 emissions remain in the atmosphere. Short-lived CDR is also needed to, for example, compensate for methane and nitrous oxide emissions, deforestation, and historic emissions. In any case, the like-for-like removal principle should be used where ongoing fossil emissions needs to be matched with durable removals to enable net zero. For more information see Robert’s blog post How much carbon will we need to remove?

Element 2 – Proportional Abatement

The tool requires the input of an organization’s CO2 emissions to determine the proportional amount of CDR required, based on the SBTi-aligned CDR scaling scenarios. More information on the scenarios can be seen below. What this effectively means is a company with 1% of the world’s emissions would also be responsible for 1% of the world’s CDR before the adoption multiplier is applied. See more in Element 4.

Element 3 – SBTi Net Zero Scenario

We use the SBTi emissions reduction pathway and CDR inputs (both annual targets at 2050 and cumulative removals up to 2050) because the SBTi is well-known and commonly adopted by corporations.

Under the SBTi, 90% absolute emissions reductions must be achieved, with 20-40Gt of cumulative removals up to 2050 and then at least 1-4Gt of durable annual removals by 2050 under their 1.5˚C scenario. These numbers come from the SBTi’s Pathways to Net Zero Paper. The technical summary documents their approach to determining their 1.5˚C-aligned pathways for target setting. It combines science and principled judgements, with one of those being alignment with the UN’s Sustainable Development Goals (SDGs)[5].

Using the CDR inputs, we’ve created 2.5Gt and 4Gt global durable CDR scaling scenarios that meet the SBTi estimates. These act as the foundation for determining organizational CDR. More information on how the CDR scaling paths were developed can be found here.

Note: the emissions reductions scenario is not the SBTi’s exact numbers but is in the spirit of the work with a 4.2% linear reduction from 2022-2030 and reaching absolute emissions reductions of 90% by 2050. Corporations wanting to follow the SBTi path should sign up, commit to a target and then act on that target through the SBTi. This scenario is solely provided to show the relationship with emissions reductions and the required CDR.

Element 4 – Adoption Multiple

A further function is applied to recognize that only 0.5% of SBTi aligned companies are buying durable CDR today. We address this by providing a multiple that declines over time as this scenario presumes corporate purchases will gradually increase to 100% of companies by 2050. Otherwise, if the tool was adopted without the multiple it could result in organizations that are capable of supporting CDR today purchasing volumes which are much too small and potentially reducing the total amount of CDR purchased instead of increasing it. This could have implications for the technology’s ability to scale, and thus limit the amount of CDR available further down the road.

The formula = proportionate CDR x adoption multiple

Proportionate CDR = the SBTi-aligned CDR scaling scenario x (org CO2 emissions / global CO2 emissions)

Adoption multiple = (1/% of companies buying durable CDR)

Conclusion

The CDR Scaling Tool is intended to be a simple solution for calculating a removals schedule to assist organizations that are planning their carbon dioxide removal purchases. We hope that it supports organizations to develop robust net zero plans, with the ultimate goal of reducing warming to 1.5˚C or below.

References