The imperative for existing industries to integrate carbon removal into their operations is no longer solely an environmental consideration; it is a strategic opportunity for long-term commercial success and resilience in a rapidly changing world. This report underscores that the dual forces of commercial opportunity and emissions urgency are converging, creating a pivotal moment for industry leaders to act decisively.

Beyond the imperative to reach net-zero climate targets, integrating carbon removal offers tangible business advantages. Early adoption allows companies to tap into new and expanding revenue streams through carbon credits, green product premiums, and potential government incentives. Carbon removal is also a tool for managing regulatory risk and carbon tax obligations, which are expected to increase in key markets in the coming years. Taking a proactive approach ensures continued competitiveness by building in-house expertise and avoiding future dependence on external carbon removal providers to meet net-zero goals.

There is an expanding and compelling array of opportunities for integrating carbon removal methods within existing industrial operations, particularly where there is large-scale processing or transport of rocks, minerals, water, air, biomass, or carbon itself. Many industries can leverage their infrastructure and material assets, along with engineering and project expertise, to incorporate carbon removal activities with minimal capital expenditure.

Companies can take advantage of the high volumes of resources required for carbon removal activities by supplying feedstocks, materials, and infrastructure to developers. They can serve as strategic investors by providing capital to carbon removal companies and technologies, or partner directly with technology developers to collaborate on research and deployment. More ambitious companies take advantage of their resources and expertise to develop carbon removal solutions in-house. Industries can also act as game-changers by shaping best practices, regulations, and markets for carbon removal.

Heavy industry stands to gain significant financial benefits from the strategic integration of carbon removal technologies. This report highlights that opportunities exist for industries to unlock cost savings and enhance efficiency within their value chains by integrating carbon removal. Carbon removal also offers pathways toward additional revenue through carbon credits or green premiums.

Industry leaders must now assess their operations, explore potential integration pathways, and strategically invest in research, development, and collaboration to seize this pivotal moment. They can leverage their unique position to bring new technologies to life and harness the massive material flows, infrastructure, and workforce needed to develop what is expected to be a trillion-dollar carbon removal industry.

Leaders in heavy industries have commercial and climate imperatives to integrate carbon removal into their operations. Commercial imperatives include business growth and diversification, meeting growing demand for low-carbon products, and regulatory compliance. The climate imperative is that carbon removal is needed at massive scale to stabilize global temperatures, and existing industries need to step up to support the scale-up.

Industrial leaders are recognizing these imperatives and beginning to make pivotal investments across a growing array of carbon removal methods with industry applications. New markets and standards are being defined now by these frontrunners. For industrial companies that want to align sustainability plans with economic growth: now is the time to integrate carbon removal into your strategy and operations.

Carbon dioxide removal (CDR), or simply carbon removal, refers to the suite of activities and technologies that remove carbon dioxide (CO₂) from the atmosphere and store it for decades to millennia. Recent assessments of projected needs for carbon removal stand at seven to nine billion metric tons (gigatons, or Gt) annually by 2050. Our actual need could be much higher.

Seven to nine billion tons of CO₂ is comparable to the volumes of material handled by some of the world’s largest industries, such as agriculture, construction, mining, energy, and waste management. Heavy industries are well positioned to contribute to generating these removals, given their existing infrastructure and expertise in managing large material flows, including rocks and minerals, biomass, energy, and water. Carbon removal will also be increasingly valuable — early entry into this space presents a profound economic opportunity.

Strategically integrating carbon removal into existing industries has the potential to both accelerate its deployment and provide benefits for all parties, while optimizing the use of established assets, resources, and workforce. The scaffolding to enable such scaling needs to be built now, as climate impacts are not waiting. This report provides leaders across industries with the business case for integrating carbon removal into their sector, and guidance on how to explore this important need and opportunity.

Our business case for existing industries to integrate carbon removal has six elements. Each element stands alone and merits further investigation by industry. Taken together they present an even stronger case.

2.1 Access new revenue streams

Removing CO₂ from the air is an increasingly valuable service that can be monetized in many ways: through carbon credit sales on the voluntary carbon market (VCM) and compliance markets and through green premiums priced into differentiated end products or services.

Voluntary carbon removal purchases grew at a compound annual growth rate (CAGR) of 237% between 2020 and 2024. Recent drafts of the Science-Based Targets Initiative’s forthcoming Corporate Net Zero Standard suggest the new standard would further boost voluntary demand for carbon removal. While projected revenue for voluntary carbon removal credits are still early and vary wildly, minimum estimates for 2040 begin at $6 billion per year, and go as high as $150 billion, based on analysis by BCG. Additional revenue from sales in compliance carbon markets could reach $125 billion per year by 2050. McKinsey has estimated an even higher overall market size of $1.2 trillion USD by 2050. Savvy industry leaders will access new revenue streams first.

2.2 Stay competitive

First movers in this burgeoning field will accrue learnings and expertise through early efforts to integrate carbon removal into their business. Companies that delay will miss out on revenue opportunities and be beholden to other industries, companies, and technology providers who develop carbon removal at scale to meet their net-zero targets. By integrating carbon removal on their own sites and within their own value chains, companies buy themselves flexibility and autonomy.

2.3 Turn waste into value

Many industries necessarily invest time and capital managing waste, but it is largely a cost center. Opportunities exist to transform trash into treasure by managing waste streams into carbon-removing revenue generators. There may be instances where industries can modify waste management processes to begin removing carbon, while also improving safety, environmental performance, or waste management costs.

The number of carbon removal methods that can make use of waste materials and industrial byproducts as feedstocks is quite large. Opting for wastes over freshly extracted feedstock can lower the overall carbon intensity of the process, maximizing net carbon removed. Grinding rocks and minerals or desalinating water are required preprocess steps for some methods, making wastes preferable as feedstocks compared to new material. Waste heat from industrial operations, including the fast-growing portfolio of data centers, can be used to power many forms of direct air capture. Waste biomass from working lands is the feedstock of choice for many biomass-based carbon removal processes, though diverted organic wastes from landfills are also applicable.

Certain carbon removal processes can also transform unused materials into valuable products. Examples include the application of carbon mineralization approaches to enhance metal production from mining byproducts while also producing carbonate materials useful in the construction industry, or the application of direct air capture or alkalinity enhancement to increase freshwater production.

As climate impacts, environmental regulations, and public pressure constrain new industrial deployments or further resource extraction, companies will benefit from optimizing their use of relevant wastes and byproducts, existing material processing capacity, and energy flows. These strategies also expand the productive life of existing facilities and workforces.

2.4 Fulfill corporate net-zero goals

Achieving net-zero or net-negative emissions may be completely impossible for many industries without carbon removal. For others, integrating carbon removal into existing processes may simply make achieving net zero more affordable. Industries that move now to explore carbon removal integration opportunities will tangibly expand their suite of options for reaching net zero and reduce the cost of doing so.

While the easiest and cheapest option to address emissions is almost always to avoid creating them in the first place, there may be time or resource constraints on how fast abatement solutions can be deployed, or the remaining options may become increasingly expensive. Most industrial emission reduction strategies cannot reach net-zero emissions without including carbon removal to neutralize some portion of ongoing emissions. In many cases, corporations will be left with purchasing carbon credits as their final means of reaching net zero.

Currently, durable carbon removal credits are both scarce and expensive and are expected to remain so without dedicated interventions by industrial players with access to necessary feedstocks and infrastructure. This creates a Catch-22 situation, where many industries may need to purchase large quantities of durable and affordable credits if they have not eliminated their entire emissions profile. However, these credits may not be available, nor can we expect that costs will come down, without scaled, incorporated industrial carbon removal. Companies with access to the right tools and resources who are serious about meeting their net-zero goals, will consider integrating or investing in carbon removal to reduce the risk that their goals will not be met.

2.5 Improve regulatory compliance and preparedness

Integrating carbon removal into industrial value chains can also help companies mitigate regulatory risk and support preparedness for tightening regulation in the future.

Opportunities exist to use carbon removal to address environmental concerns present in industrial settings. These concerns are unique to each industry and context, but they generally relate to the disposal and management of industrial waste streams. The chemical reactions that make carbon removal possible can also restore acidic output streams to more neutral pH levels or stabilize metals that might otherwise leach into water tables. Repurposing materials that store carbon in the built environment can reduce the need for destructive sourcing of fresh materials and reduce embodied carbon levels.

For industries subject to greenhouse gas emissions regulation, carbon removal activities can lower net emissions and reduce carbon tax obligations or provide opportunities to sell unused allowances within compliance markets. As climate policies tend toward inclusion of stricter accounting, reporting, and mitigation rules for greenhouse gas emissions, investment in carbon removal capability can be a strategic play toward streamlined compliance and reduced costs.

2.6 Shape how your industry develops

Companies can shape how their industry evolves, including setting norms and defining the rules of the game. By engaging early in carbon removal and developing expertise, industry leaders can provide thought leadership and demonstrate through real–world examples how carbon removal can best be used to achieve economic and climate goals.

Climate change cannot be fully mitigated at this point without carbon removal, and carbon removal will not reach the necessary scale without leadership from industry. Only industry leaders have the power to furnish the vast resource requirements for gigaton-scale carbon removal, unlock scaled financing, and de-risk these novel technologies through real-world demonstration.

The scale of carbon removal needed is immense, and the resource requirements for conducting carbon removal activities will be limiting without dedicated support from existing industrial players. While most of the resources required for carbon removal activities are ubiquitous — including biomass, rocks and minerals, water, and low-carbon energy — access to these resources and the infrastructure for processing or transporting them are likely to be constrained at scale. Removing one billion tons of CO₂ from the atmosphere requires either one to five billion tons of rocks or minerals for geochemical carbon removal approaches, over 3,000 terrawatt-hours (TWh) of low carbon energy for synthetic approaches, or almost one billion tons of dry biomass for biogenic approaches. The amount of water required is also substantial in many cases, though options exist to produce clean water while removing CO₂. Competition for feedstocks, including biomass, low-carbon energy, minerals, and water may create societal strains, and is likely to disfavor carbon removal. This could impede its development completely. It is especially pertinent then to optimize resource use by harnessing relevant wastes and byproducts, existing material processing, and energy flows.

Carbon removal technologies making use of these resources need to be rapidly tested and de-risked through piloting. Current technologies are at various stages of being piloted and demonstrated, however, more testing is needed for many carbon removal approaches before they are market ready, a process that could be accelerated by partnering with existing heavy industries to address many of the limiting factors to testing and scaling, including feedstock availability, logistics, supply chain integration, siting considerations, and permitting.

4.1 The need for carbon removal

Carbon removal is any human activity that removes CO₂ from the atmosphere and stores it in geologic, terrestrial, or ocean reservoirs, or in products, for decades to millennia. While Earth systems naturally cycle carbon both biologically (shorter-term) and geologically (longer-term), carbon removal processes work to deliberately enhance or accelerate the transfer of CO₂ out of the atmosphere, helping to balance the accelerated transfer of carbon into the atmosphere caused by recent industrial and land management activities. Carbon removal plays an important role within climate action, offering the possibility to manage and constrain the overall concentration of CO₂ in the atmosphere, stabilize temperatures, and limit the negative environmental, societal, and economic impacts of climate change.

Most efforts to combat climate change have rightfully focused on decarbonizing emitting processes. However, all “net zero” targets implicitly assume and require the scaled deployment of carbon removal as the negative component that balances any remaining ongoing emissions. Carbon removal is also the only option to address the cumulative emissions already in the atmosphere, which cause the warming we currently observe, and which lead to devastating economic and human health impacts due to climate change.

For many industries, carbon removal is expected to be available in the coming decades to address any residual, hard-to-abate emissions that persist despite maximum decarbonization efforts. There are two major concerns with this expectation. First, quantities of carbon removal will be limited due to energy and physical resource constraints, even in the best of cases. This means that any compensatory use of carbon removal as offsets can only cover a fraction of today’s emissions, stressing the importance of decarbonization efforts. However, decarbonization efforts alone are not going to bring us to net zero anytime in the next several decades, if at all. They certainly are not going to lower current atmospheric CO₂ levels, which at the time of writing are hovering above 425ppm, a significant increase from pre-industrial levels of 280ppm.

The second concern is that scaling carbon removal technologies to meaningful levels is going to require decades of research, development, and deployment. To build the safe and effective carbon removal capacity necessary to satisfy both corporate net-zero plans and climate goals, we must urgently test and pilot newer carbon removal solutions and begin scaling those that work best. We cannot accomplish this task without the knowledge, resources, and active engagement of large industrial partners.

It should be emphasized that carbon removal cannot replace decarbonization efforts. As mentioned above, a successful carbon removal strategy relies heavily on drastic cuts in carbon emissions. And it should not be forgotten that the goal in addressing climate change is to manage and constrain the total amount of CO₂ in the atmosphere, which will require activities to both remove the excess, while limiting new amounts going in. In many ways, this report highlights the challenges with securing resources to remove CO₂ even at low volumes. It should in no way be construed to suggest that we can or should do carbon removal as a means of balancing continued emissions that could otherwise be avoided.

4.2 Carbon removal spans a range of activities

The range of methods, technologies and practices that make up the suite of carbon removal approaches is generally much broader than is recognized. Often carbon removal approaches are categorized as either “nature-based” or “technological.” This binary framing is misrepresentative of both categories, as technology is necessary in many areas of “nature-based” solutions, and “technological” solutions are usually based on accelerating natural processes. Further, it obscures the fact that for both “nature-based” and “technological” methods, the carbon removal mechanisms involved are often well-understood chemical reactions with commonly available, natural materials, including water and brines, biological wastes, and alkaline rocks and minerals. What makes an activity qualify, then, as carbon removal, is an additional enhancement or acceleration of these reactions beyond what is already taking place.

From a deployment perspective, it is more relevant to categorize carbon removal approaches based on the processes and inputs involved. We classify carbon removal into three broad categories: biogenic, geochemical, and synthetic, based on the primary input or feedstock.

• Biogenic CDR approaches rely primarily on sustainable biomass, capitalizing on naturally occurring photosynthetic processes to extract CO₂ from the atmosphere.
• Geochemical CDR approaches rely primarily on alkaline minerals or rocks as feedstock. These materials react with water and CO₂ to create either solid carbonate minerals, or bicarbonates dissolved in water.
• Synthetic CDR approaches use engineered systems powered by low-carbon energy to directly separate CO₂ from the air and capture it, or to alter water chemistry to indirectly remove CO₂ from the air.

These categories may not be mutually exclusive, and innovation is continually providing examples where processes may fit under more than one category. All three categories are relevant from an industrial perspective, and can be broken down further, as shown in Exhibit 1.

Exhibit 1: Carbon removal approaches, their primary resource considerations, and example industries relevant to deployment.

None of these carbon removal methods alone are expected to reach the multiple gigaton scale required given limitations in resources, among other considerations such as geophysical constraints, regulatory restrictions, or environmental impact management. This creates the need for a portfolio of approaches to reach gigaton scales and may even require additional innovative approaches that have yet to be developed. This existing range, though, already creates a large possibility space for deploying carbon removal within a correspondingly wide range of existing industrial settings. We anticipate that by including and adapting some of these approaches into industrial value chains in collaboration with industry experts, new innovations will emerge.

The number of options for integrating carbon removal methods within existing industrial activities is large and growing. Wherever there is large-scale processing or transport of rocks, minerals, water, air, biomass, or carbon itself, there may be an opportunity to remove carbon. Example industries include mining, agriculture, forestry, shipping, pulp and paper, textiles, wastewater, desalination, chemicals, and construction — including cement and concrete, steel, and other building materials. There may also be applicable overlaps in the food and beverage industry, or in combining carbon removal activities with datacenters.

Integration of carbon removal technologies can take many forms, including co-locating with existing industrial sites to capitalize on waste and feedstock exchanges or sharing of infrastructure and power. In many cases, the need to retrofit assets to incorporate carbon removal may be minimal, limiting downtime. This section lays out the various synergies between existing, ongoing industrial practices and novel carbon removal approaches.

5.1 Utilization of industrial wastes and byproducts

Many carbon removal processes require primary feedstocks in the form of either biomass or alkaline materials. In both cases, waste materials are often preferable to virgin feedstock. Using wastes reduces the net CO₂ footprint of the operation, maximizing net removals, and previous processing of re-used materials or recovered waste means that costs are often lower than virgin feedstocks. Agricultural waste, forest clearings, and other biomass residues are all applicable inputs to various biogenic carbon removal approaches. Industrial tailings, slags, and byproducts from mineral extraction and metal processing activities, or from concrete demolition wastes, are similarly high-value feedstocks to geochemical carbon removal approaches, as the materials are generally crushed and ground to appropriate grain sizes, reducing costs. Other material outputs can also be utilized: Brines can be electrochemically split to create alkalinity, which can then be used to draw down CO₂. Waste heat could also be used for processes requiring thermal energy.

5.2 Integrating carbon-based products

Carbon can be removed and stored in durable products. This is most applicable to the built environment and includes a wide range of biological based building materials, such as straw, hemp or cellulose, alongside timber and other conventional materials. Biochar can also be included in cement. Concrete is an especially attractive option for storing carbon as the second most used substance in the world behind only water. While concrete absorbs CO₂ under ambient conditions, its natural potential is limited, and opportunities exist to accelerate this process and provide additional carbon storage options in areas with no access to CO₂ pipelines or wells.

Other carbon-based products may also be derived from CO₂ obtained through atmospheric carbon removal, such as polycarbonate. These products may need to meet durability or lifespan requirements to qualify as durable carbon removal, however the opportunities are significant regardless.

5.3 Utilization of CDR outputs and byproducts

Some carbon removal processes produce outputs that can be used as inputs to industrial processes. Biochar is a common example and can be used as an agricultural amendment or as a precursor to biopolymers with a wide variety of uses. Similarly, mineralized materials may be used as aggregates for construction purposes. Geochemical processes that can extract metals from alkaline materials can also produce silica, magnesium hydroxide, as well as sulfuric acid or even hydrogen, all of which are valuable commodities and can be sold separately.

5.4 Sharing Infrastructure

Leveraging existing assets for use in carbon removal activities can take many forms. Infrastructure and tools for processing, storing, and transporting mineral or biomass feedstocks is especially relevant. Other examples include piggybacking on existing water pumping and transport and sharing treatment infrastructure for alkalinity-based carbon removal approaches as well as drilling and surveying equipment, or ventilation systems. Larger infrastructure, including disused oil and gas platforms or underutilized cargo ships, may provide opportunities to carry out marine-based carbon removal.

5.5 Change in practice and feedstock substitution

Some carbon removal methods can be directly integrated as substitutes for existing, more carbon-intensive practices. Alkalinity management in industrial and municipal wastewater treatment could shift from using high-carbon and more toxic substances like caustic soda to limestone, a far more abundant and lower-carbon alternative. Adding biochar as an agricultural amendment can also reduce the need for chemical fertilizers and possibly pesticides. Using carbonated products, including those for which the source CO₂ was atmospheric as a partial replacement for ordinary Portland cement can result in significant emissions reductions. Replacing some energy production processes with Bioenergy with Carbon Capture and Storage (BECCS) in an energy production portfolio, can also help achieve net-negative emissions.

5.6 Environmental compliance

Integrating carbon removal can offer significant benefits for complying with environmental regulations. Reducing net volumes of wastes for carbon removal utilization can mitigate the environmental risks associated with their disposal. In the case of biomass wastes, diverting them towards biochar, injectable bio-oil, or bioenergy production with carbon capture and storage (BECCS), or burying them can reduce methane emissions associated with decomposition. It can also help eliminate or lock away harmful “forever chemicals” which might otherwise re-circulate into food systems and cause harm. The formation of stable carbonates through mineralization of industrial byproducts can immobilize toxic metals, avoiding potential water and soil contamination and the possibility of decades of high-cost water treatment. Engineered enhanced weathering technologies may improve conditions for bacteria in wastewater treatment, reducing the nitrogen and phosphorous concentrations in outflows.

Exhibit 2: Synergies between existing industrial processes and carbon removal processes

Industry can play a variety of roles in scaling carbon removal. These roles can easily overlap, and we expect that larger corporations will take on multiple roles at once. For the purposes of defining the various options companies have, we explore these roles in more detail as if they were distinct.

6.1 Resource and Infrastructure Provider

Carbon removal projects at scale will collectively demand millions of tons of feedstocks and energy, along with other materials and equipment, to conduct their activities. In some cases, certain materials, wastes, or byproducts are more valuable to carbon removal operators, who see them as feedstock, than they are to any other party. Industries with supplies of feedstocks, waste materials, and byproducts, as well as transport or material processing infrastructure, have the opportunity to grow by providing goods and services to the expanding carbon removal industry.

6.2 Strategic Investor

Industries can make strategic investments in carbon removal technologies, companies, or venture funds, or form joint ventures with carbon removal companies. Larger companies with investment arms can provide pivotal capital to fledgling companies with innovative technologies in exchange for equity or royalties on carbon removal credits. Companies may also want to finance larger-scale deployment to accelerate innovation and deployment for strategic reasons.

6.3 Project Partner

Industries can work directly with carbon removal technology developers through collaborative research and commercial partnerships, providing expertise, resources, and infrastructure to facilitate project deployment. Projects that combine promising new technologies with long-standing industrial expertise may be well positioned to overcome technical and logistical challenges to scaling and generating profits. Hosting carbon removal projects on-site may be beneficial for both the carbon removal supplier and the host industry. For example, projects may be able to leverage existing wastes or burdensome byproducts or enhance overall productivity.

6.4 Carbon Removal Technology and Solution Developer

Many existing industries can enter the carbon removal industry and leverage their expertise, assets, and existing workforce to develop and commercialize carbon removal activities themselves. Industrial players are in a strong position to improve the efficiency, scalability, and cost-effectiveness of carbon removal processes and can design and build systems that integrate into their existing operations or develop new vertically integrated carbon removal business lines.

6.5 Game-changers

Companies can also shape the rules of the game in their own industry and the emerging carbon removal industry, by shaping best practices, standard-setting processes and interoperability, regulation, and policy. Leadership can drive the development of markets that value carbon removal, and a favorable regulatory environment for generating value from carbon removal activities.

Integrating carbon removal into existing industries will require buy-in from corporate leaders and their investors, necessitate changes to existing practices, and affect existing costs and revenues. Industry leaders need clarity on how these added costs and revenues will be borne and by whom, and what needs to change to unlock an investment case for carbon removal. In some cases, carbon removal applications within a given industry can scale up without government intervention. In others, there are ample opportunities for regulators to assist in unlocking new revenue streams, as identified by industry leaders. The breakdown below gives industry stakeholders a starting point for building an economic case for integrating carbon removal within their value chain. This economic case is a crucial piece of evidence to persuade policymakers to instigate policy changes to unleash new revenue streams, improve industrial resilience, and facilitate climate-compatible growth.

Governments will play an outsized role in creating an investment case for carbon removal, both through direct injection of capital into carbon removal technology and projects, and through regulatory changes that incentivize and motivate others to foot the bill. Because carbon emissions remain an underpriced or unpriced externality in many geographies, governments will increasingly need to step in and modify industrial standards and baseline regulations to incentivize appropriate management of carbon waste.

Since each industry is regulated differently at the local, regional, national, and supra-national levels, this report does not cover the policy and regulatory outlook for such disparate industries as desalination, wastewater, mining, the building sector, and the concrete and steel industries. Individual industries will be discussed further in forthcoming RMI reports containing sector-specific discussions. Instead, we propose below a framework for industry leaders to think through how carbon removal could be financed within their existing business models.

7.1 Unlocking cost savings and efficiency within value chains

In some cases, carbon removal activity may generate revenue or savings in excess of costs within the industrial value chain. Some examples include:

Reducing costs of existing processes — Integrating carbon removal may allow for reduced energy or material inputs, or improved efficiency, of existing industrial processes. For example, adding limestone during wastewater treatment, in addition to de-acidifying the water and leading to carbon removal, may also reduce the volume of chemicals needed to encourage settling of solids (flocculants), providing direct cost savings.

Enabling cross-subsidy — Adding carbon removal to an industrial process will often be less expensive than developing a carbon removal project on its own, and vice versa. The two activities can be co-located, share infrastructure and operating staff, and find new purposes for waste streams such as low-grade heat, brines, or mineral wastes.

Improving product quality — Some industrial carbon removal integration may fundamentally improve products or services on axes that are already valued by customers. For example, cementitious building materials that integrate removed carbon may have improved early strength relative to conventional materials. In some cases, the same product quality can be delivered more cheaply.

Unlocking new or augment existing revenue streams — Carbon removal integration may enable the exploitation of a previously uneconomical revenue stream. For example, it may be possible to monetize what would otherwise be sub-grade ores for metal extraction, essentially subsidizing the cost of carbon removal through increased sales of a critical resource. Reprocessing wastes may yield additional saleable commodities such as hydrogen, acids, and aggregate.

Reducing carbon tax obligations If the project owner retains the climate benefit associated with the carbon removal activity, they could lower their overall net emissions footprint and help reduce carbon tax obligations in some jurisdictions.

7.2 Opportunities to monetize carbon removal

Having exhausted the above options for increasing revenue or decreasing costs, carbon removal activities may still require additional funding streams to be economically attractive to industry leaders. These funding streams may come from existing or new customers, from governments, or may even be supplied from within organizations to meet specific goals.

Existing customers

• “Green premium” products — Products or services that are linked with carbon removal performed within the same value chain may be able to claim partial or full neutralization of their associated emissions. Such low- or zero-carbon products and services may carry a green premium that customers are voluntarily willing to pay over higher-carbon alternatives. This can be facilitated by third-party or government-endorsed labeling regimes, such as the EU’s Carbon Removal Certification Framework, or France’s Label Bas Carbone, or by tightening rules regarding Scope 3 emissions.
• Purchasing climate benefits — Some customer segments may wish to purchase carbon removal credits alongside an unmitigated product. The climate benefit delivered by carbon removal can only be claimed once, but industry leaders have the flexibility to link or un-link any removal with the associated product according to customer preferences and to maximize willingness-to-pay, for example by selling a conventional product with unmitigated emissions to one customer segment, and disembodied carbon removal credits to another segment.

New customers for carbon removal

• Carbon credit purchases — Highly-durable carbon credits are valuable, and likely to remain so given supply constraints. Companies with in-house integrated carbon removal capability can certify and separate carbon credits from their underlying industrial product or service and sell them to entirely new customer segments.

Governments

• Deployment incentives — Governments can guarantee predictable incentives over an extended time horizon to carbon removal projects, acting as an offtaker for carbon removal credits. Examples include the United States’s 45Q tax credit, which pays $180 per ton of permanently removed carbon through direct air capture, and other proposed mechanisms such as carbon contracts for difference.
• Industrial & innovation policy — Direct grants into carbon removal projects can spur learnings from first-of-a-kind facilities and deliver a competitive advantage. Examples include the $3.5 billion injection into Direct Air Capture Hubs in the United States, and EU grants to carbon removal projects, such as Stockholm Exergi’s BECCS project and Carbfix’s Silverstone
• Procurement — Government can procure carbon removal credits directly, as was done in the US Department of Energy’s $35 million CDR Purchase Pilot Prize, or procure products that contain removed and stored carbon, such as concrete. They can also procure products or services whose emissions have been partially or fully neutralized using carbon removal.
• Regulated industries — Some services such as desalination, municipal solid waste processing, and wastewater treatment are heavily regulated, either due to risks of a natural monopoly forming or an imperative for public safety and security. Governments are often substantial funders of these activities through grants and bonds, and those same funding streams could be used to cover the investment or operating costs of integrated carbon removal.

Decarbonization efforts

• Innovation & competitiveness — There may be value in self-funding carbon removal demonstration sites and projects before or alongside industry peers, ensuring that any associated learnings and public goodwill accrue to the first movers.
• Speculation — Some industries may see an opportunity to invest in a self-funded, in-house carbon removal capability premised on selling or using those climate benefits in the future as their value increases.
• Regulatory hedge — Regulation, particularly in the European Union, will require industry to reduce its emissions footprint over time. Integrating carbon removal into industrial value chains will maximize how carbon removal can be used for compliance; for example, under the EU’s Carbon Border Adjustment Mechanism, carbon removal is not allowed as an offset, but integrated carbon removal can reduce an industrial commodity’s embedded emissions.

Common across all use cases for carbon removal is the importance of validating and quantifying how much carbon was removed, and how long it is expected to remain stored. This is important for two reasons: 1) to ensure any climate claims made on the basis of the removal are defensible, and 2) to adhere to national and international standards. Special attention is required to avoid confusion and potential for accounting missteps with regard to the physically stored carbon and the intangible climate benefit of that removal.

The wide range of use cases for climate benefits associated with any carbon removal activity all necessitate quantifying how much carbon was removed. However, the level of precision required can vary depending on the use case. Quantification goes beyond simply measuring how much carbon was extracted from the atmosphere. Equally important is robust estimation of how long the carbon will be stored, as any reversals of CO₂ back into the atmosphere must be taken into account.

For use cases that allow someone to make a “compensation claim,” such as carbon credits that count against a reported greenhouse gas emissions inventory, accounting must be held to the highest standards available since another emitter is using the credit to compensate for having polluted. Meeting such standards may entail evaluations to assess the following criteria:

• Additionality of the removal activity, showing additional funding was necessary to make the carbon-removing activity happen, that government regulation did not already require the carbon-removing activity, and that it is not already a widely established practice performed by many competitors.
• Durability, or length of time the CO₂ remains out of the atmosphere. Carbon stored for shorter periods of time may not fully compensate for emissions and may need to be removed again. High-durability removals with storage times of millennia are necessary for accounting against fossil-based emissions.
• Risk of reversal, or the likelihood that the CO₂ will be re-released before the end of its expected durability, will vary by carbon storage method and depend on weather and climate conditions along with changes in storage management. High reversal risks may be reflected in the price of any derived carbon credits, or in the total volume of negative emissions in greenhouse gas inventories.

For use cases that do not involve compensation, such as green premiums, quantification precision could potentially be relaxed, as could strict requirements on additionality. For use cases where the removed carbon is physically embedded in a usable product or material, extra attention is needed to ensure there is no double-counting of the climate benefit.

The exact protocols and methodologies that must be followed for proper accounting will vary by the carbon removal pathway being deployed and the planned end use of the CO₂, as well as any associated credits, if credit generation is chosen. They may also vary based on the industrial setting. In general, all carbon accounting must comply with relevant standards, existing reporting and accounting practices.

Companies will need to contend with the policy choices and reporting preferences of their host country, who may place limits on what qualifies as carbon removal, or whether carbon credits can be sold and to whom. For example, the EU CRCF is intended initially only for certifying removals conducted within the EU. All fluxes of carbon, whether emissions or removals, need to eventually be accounted for in the national inventory of the country in which the carbon flux takes place, though mitigation outcomes can of course be sold or transferred to other countries through mechanisms governed by the Paris Agreement.

Regardless of the end use of the carbon removal, project owners should report the removal activities to government authorities to ensure it is captured within the appropriate greenhouse gas inventories. Reporting may also be required as part of disclosure schemes, such as in the CDP initiative, or disclosure standards, such as ISSB or the European Sustainability Reporting Standards, or against voluntary net-zero standards such as those governed by the Science-Based Targets Initiative.

Integrating carbon removal into larger industries as an environmental measure may be subject to scrutiny: Adding further material processing on top of existing activities may be energy intensive, risking displacement of energy for other purposes or potentially requiring new electricity generation capacity on site. Applying wastes or byproducts, including mineral wastes from mining, biomass wastes, or wastewater, towards carbon removal use cases may not yet be considered in existing regulation or permitting rules. Such rules are understandably stringent and revising them may create bottlenecks until new waste-to-value carbon removal concepts can be sufficiently tested and validated.

Alongside the risks of improper carbon accounting addressed in the previous section, we’ve identified three other significant risks that will need to be properly considered by both industry leaders as well as policymakers.

The first of these risks is mitigation deterrence, or the idea that carbon removal will be used as a means of avoiding the difficult work of decarbonizing industrial practices. Related to this risk is a second risk of increased competition for resources. The third risk is that the implementation of carbon removal activities causes additional environmental harm.  While these risks are not mutually exclusive, we address them separately here to call out specific guardrails for each.

9.1 Reducing the risk of mitigation deterrence

The possibility of removing CO₂ after it was emitted suggests to some that carbon-intensive activities can continue, and the emissions can simply be cleaned up afterwards, a concept known as mitigation deterrence. Mitigation deterrence can take many forms — from corporate decisions to ignore or delay potential decarbonization in favor of purchasing offsets to reach net zero, to negligent policy with relaxed rules on lowering emissions with the expectation that carbon removal may eventually be an option to reach net zero.

It should be clear that reducing and preventing emissions now is not the same thing as removing them later, simply due to warming effects that take place between the time of emission and the time of removal. This is of greater concern if the removals occur slowly over decades, such as in the case of forestry removals, or some enhanced weathering techniques. Using a biogenic carbon sink, such as a forest, is also problematic when compensating for emissions originating from a fossil source.

Durable carbon removals realized over shorter time scales may then be preferred in carbon markets, though they will be limited in volume by feedstock and low-carbon energy availability. Maximum projected capacity, assuming hypothetical best-case scenarios across 32 different options for both durable and non-durable carbon removal, is less than 15 GtCO₂ annually by 2050, a far cry from the ~40 Gt CO₂ that are emitted annually today.

While the premise behind mitigation deterrence may be based on flawed assumptions about the potential promise of carbon removal, it reflects real concerns that industrial and corporate priorities will not align with societal priorities to genuinely address climate change and could hamper efforts needed to transform industrial systems.

The risks of deterring decarbonization efforts as a result of implementing on-site carbon removal may need to be treated differently than simply purchasing offsets from a third party. There is a wide landscape of available and emerging options for decarbonizing industrial practices, that merit attention and resources. For harder-to-abate emissions with fewer options, such as in the airline industry, it may be that carbon removal offsets are the economic choice. For the purposes of this report, we emphasize the following guidelines:

• Each potential carbon removal integration should be evaluated on a case-by-case basis, dependent on industry constraints, and a full cost-benefit analysis for each integration should be conducted and objectively compared against other interventions with not only climate impacts in mind, but socio-economic, environmental, and public health impacts as well.
• Careful consideration should be given to both direct and indirect impacts of the project on continued fossil fuel use.
• Separate targets for decarbonizing and for carbon removal, at both the corporate level, as well as the national or international level, should be developed and adhered to so that efforts can be carried out without compromising the efficacy of either.

Finally, it should be emphasized that this report is not an argument for industries with high or hard-to-abate emissions to use carbon removal to justify their ongoing polluting activities, but an argument for any industry or corporation that can safely and responsibly remove atmospheric carbon to do so, as the world needs carbon sinks in order to stabilize temperatures.

9.2 Competition for resources

Related to the issue of mitigation deterrence is resource prioritization. As stated throughout this report, carbon removal activities require significant quantities of water, biomass, minerals, and energy, among other resources, and at scale are expected to impinge on resource needs across all sectors. Additional clean energy capacity will certainly be necessary to support carbon removal deployment. A frequent and valid concern is that the low carbon energy required for some carbon removal processes, such as direct air capture, should be put to use elsewhere given the need for increased power globally. This concern can be extended to all material resources, as well as to time and available financing.

Projects may face challenges when dual priorities — such as the provision of a product and integration or maintenance of a carbon removal project — are in conflict. Adding any additional activity onto an existing workstream may cause downtime of the main industrial process while new equipment is integrated and brought online. This comes with costs from paused production and should be considered early when seeking financing and support. Downtime may also result in a loss of provision of an essential service, such as freshwater production from a desalination plant.

We need players with expertise within these industries to participate in these conversations and bring their knowledge of what is reasonable to expect for getting projects online at scale without significantly disrupting industry processes or material process flows.

Further, we need methods and practices to optimize resource use such that carbon removal can be carried out with limited or even positive impact on other industries and supply chains, such as in cases where outputs from carbon removal activities can result in fresh water, metals, cementitious materials, industrial acids or other products. A key objective behind integrating carbon removal into established industrial processes is to widen the resource pool available to carbon removal and take advantage of available synergies, without overly compromising resources needed for all other aspects of life. In terms of smart resource allocation, we suggest the following guidelines:

• Wastes and byproducts which are not used for other processes should be prioritized over virgin material.
• Where possible, processes should be coupled to take advantage of existing energy flows, infrastructure, or transport.
• A priority ladder for energy use should be established where energy-intensive carbon removal projects threaten to monopolize energy production.
• A priority ladder for biomass should be established to account for the need for sustainable products and services in energy, food, construction, as well as healthy ecosystems, biodiversity restoration, and climate mitigation.

9.3 Environmental & social protections

Carbon removal activities should neither cause environmental harm, nor create or perpetuate public health concerns, for the sake of lowering net emissions. Generally speaking, large industries are already regulated with respect to environmental integrity. This is attractive to carbon removal developers who generally welcome clear and enforced rules and guidance, and a motivation for including carbon removal on existing sites with environmental monitoring schemes in place.

In many cases, regulations will need to be adapted to include carbon removal activities. Existing permits may need to be updated before additional processes can be included on-site. This is especially relevant where industrial wastes unfit for other purposes are concerned and when introducing a new use case for these materials requires additional testing and verification to prove safety standards can be upheld. Guidelines for maintaining high environmental and social integrity include:

• Where carbon removal activities push up against the original intent of existing regulations, a clear path to establishing safety should be laid out and followed to allow for future inclusion of carbon removal activities.
• Protections should be put in place to prevent the leakage of toxic materials resulting from carbon removal activities. This refers to pollution in air, water, and soil, as well as to other types of pollution.
• Byproducts from carbon removal processes should meet the same or stricter safety standards as the industrial process it is coupled with.
• Affected communities should be included in the planning and approval processes for carbon removal projects in order to ensure that potential issues are identified and addressed early.

Leaders in heavy industry can and should act now to integrate carbon removal activities into their businesses. Here’s how:

10.1 Recommendations for industry leaders

1. Assess the carbon removal opportunity for your business:
   • Evaluate your company’s existing operations and waste streams to identify potential areas for carbon removal integration.
   • Assess the applicability of different carbon removal technologies based on your specific industry, resources, and infrastructure.
   • Analyze the potential for generating revenue through carbon credits, byproducts, or enhanced product differentiation.
   • Identify opportunities to transform waste streams and byproducts into valuable resources for the carbon removal industry.
   • Investigate the potential for creating closed-loop systems and circular economy models.
2. Invest in research, development, and demonstration:
   • Allocate resources to pilot projects and demonstration facilities to validate the effectiveness and scalability of carbon removal technologies.
   • Partner with universities, research institutions, startups and technology developers to advance carbon removal innovation.
   • Create shared innovation structures, including carbon removal hubs or joint industry research facilities, to optimize and enhance learning.
3. Set long-term goals for what you want to achieve in carbon removal:
   • Update your commercial goals to integrate carbon removal insights.
   • Create separate targets for decarbonization and carbon removal to meet net-zero commitments and/or commit to removing past emissions.
4. Collaborate to form new relationships and knowledge:
   • Partner with other industries, technology providers, and policymakers to accelerate carbon removal deployment.
   • Form consortia and industry alliances to share knowledge, resources, and best practices.
   • Engage with carbon credit marketplaces and project developers.
5. Build new capabilities to support the business case:
   • Invest in upgrading existing business lines and product specifications.
   • Invest in new business lines, in-house.
   • Invest in external companies or funds, joint ventures, or commercial projects.
   • As needed:
     • Invest in training and education programs to build a skilled workforce for carbon removal operations.
     • Establish internal teams dedicated to carbon removal research, development, and implementation.
6. Communicate transparently with stakeholders:
   • Provide clear and accurate information about your company’s carbon removal initiatives to investors, customers, and the public.
   • Address potential concerns and engage in open dialogue with local communities.
   • Leverage carbon removal integration to enhance your company’s brand and reputation.
7. Step up to shape your industry:
   • Advocate for supportive policies and regulations, including clear and consistent carbon pricing mechanisms.
   • Work with industry associations to promote the integration and adoption of carbon removal technologies.

10.2 Recommendations for policymakers

Establish clear and consistent carbon pricing mechanisms:

• Implement or strengthen carbon pricing mechanisms (e.g., product carbon intensity standards, carbon taxes, cap-and-trade systems) to create a strong economic incentive for industries to reduce emissions and adopt carbon removal technologies.
• Ensure that carbon pricing signals are long-term and predictable, providing certainty for industry investments.

Develop supportive regulatory frameworks:

• Create clear and streamlined permitting processes for carbon removal projects to create a supportive environment for project development and deployment.
• Develop regulations that recognize and incentivize the synergistic benefits of carbon removal integration, especially with regard to waste management, including waste heat.

Provide targeted financial incentives:

• Offer tax credits, grants, and subsidies to support the development and deployment of carbon removal technologies in heavy industry.
• Create loan guarantee programs to reduce the financial risk of carbon removal projects.
• Establish public-private partnerships to co-fund research, development, and demonstration of carbon removal technologies.

Invest in research, development, and demonstration:

• Promote collaboration between industry, academia, and research institutions to support faster technological development towards industrial maturity.
• Increase public funding for RD&D on carbon removal technologies, particularly those relevant to heavy industry, including investment for improving monitoring, reporting and verification.

Foster market development and demand creation:

• Establish government procurement programs for low-carbon products and materials that incorporate carbon removal.
• Develop or increase government programs to procure carbon removal credits, with specific requests for applications from industrial carbon removal projects

Integrate carbon removal into industrial sector decarbonization strategies:

• Include carbon removal as a key component of national and regional decarbonization strategies for heavy industry.
• Set clear targets and timelines for carbon removal deployment in industrial sectors.
• Provide guidance and technical assistance to industries on integrating carbon removal into their operations.

Address community impacts:

• Ensure that carbon removal projects are developed and implemented in a way that minimizes negative impacts on local communities and ensures everyone has equal access to environmental protections and economic benefits.
• Engage with communities and stakeholders in the planning and decision-making processes.

Support workforce development:

• Invest in education and training programs to develop a skilled workforce for the carbon removal sector.
• Promote the transition of workers from fossil fuel industries to carbon removal-related jobs.

RMI would like to acknowledge and express gratitude for funding support from the Grantham Foundation for the Protection of the Environment.