Unlocking CO2 infrastructure deployment: The impact of carbon removal accounting

Résumé En

Carbon removal certification may become a powerful instrument to accelerate decarbonization efforts. In Europe, its implementation is expected to foster the deployment of Bioenergy with Carbon Capture and Storage (BECCS). Yet, the large-scale adoption of BECCS is also limited by the availability of a costly CO2 transportation infrastructure shared with fossil-fueled emitters. In this paper, we examine the interactions between carbon removal accounting (which determines financial incentives for BECCS) and optimal CO2 infrastructure deployment by asking how certification affects the feasibility of BECCS projects. We propose an original economic framework to explore this question and apply it to a real case study in Sweden. Assuming carbon removal credits will be integrated into the prevailing carbon market, we show that, although a carbon removal accounting framework based on a lifecycle methodology discourages investment in inefficient BECCS processes, it may induce BECCS lock-out from CO2 infrastructures. We formulate two policy recommendations to overcome such a BECCS lock-out: (i) forward-looking CO2 infrastructure planning and (ii) complementary policy support.