Why CDR is not only an effective climate mitigation instrument, but above all it has the potential to generate billions for the economy

Author: Dr. Constanze Adolf, Senior Advisor 

Effective climate mitigation is still often associated with high costs and immense investment sums. However, the economic potential created by proven and new practices and technologies to combat climate change is rarely considered. The Boston Consulting Group (BCG), in cooperation with the German Association for Negative Emissions (DVNE), has addressed precisely this question in its new study “Carbon Dioxide Removal - Europe and Germany’s Role in Catalyzing a Trillion-Euro Industry”. The study, to which TREEO contributed as co-author, estimates the global economic potential for removing CO2 from the atmosphere at 470 - 940 billion euros per year by 2050. This corresponds to the current sales volume of the global aviation industry.

From a climate policy perspective, it is now undoubtedly recognized that climate neutrality is achieved first and foremost by avoiding emissions. In addition to the unconditional and immediate rapid implementation of decarbonization measures, we will also have to remove a considerable amount of CO2 from our atmosphere. What is needed for this is the rapid scaling of a large number of technologies - some of which are only at the beginning of their development. Nature-based solutions, which have long proven themselves with their immediate availability and direct efficiency, are therefore particularly important. The scandals uncovered last year by ZEIT and The Guardian about non-existent tree projects have only helped companies like TREEO to succeed, as TREEO is setting new standards for nature-based carbon removal dioxide - CDR for short - solutions with its single-tree monitoring and transparency.

The analysis presented by BCG shows that climate mitigation and economic success are interdependent and can even reinforce each other. Germany and the EU have the opportunity to develop an important market with their approaches and become “first movers”: more and more companies are specializing in the development of climate-friendly CDR technologies. In this context, the author team analyzes the role of CDR in mitigating climate change and evaluates different CDR methods with regard to three objectives: 

1. The main objective is to shed light on the economic potential of global CO2 removal for Europe and Germany
2. In addition, the report aims to provide a comprehensive overview of the rapidly evolving CDR landscape while differentiating CDR from other related concepts.
3. Finally, the report emphasizes the need for swift and decisive action. To this end, the authors propose an action plan aimed at policymakers, investors, buyers, and the industry.

The opportunity:

In order to achieve the global net zero target and, above all, to maintain it thereafter, we must quickly establish and expand a globally leading CDR industry. Even if many currently have the feeling that Germany is stuck in a kind of inner resignation, many innovative start-ups and companies are sending a clear signal with carbon dioxide removals. They are a manifest example of the fact that climate protection and economic success are not contradictory, but go hand in hand.

According to the calculations in this study, the market will reach an annual value of between 470 and 940 billion euros by 2050. Europe and Germany could take significant shares of this market, with Europe generating around 220 billion euros and Germany around 70 billion euros annually. This will be facilitated by increasing technological innovation and economies of scale.