In a Nutshell
- The UK has taken steps to integrate carbon removal into its climate policy and is one of the leaders in setting specific targets for greenhouse gas removals (GGR). The 2021 Net Zero Strategy sets the ambition to deploy at least 5 Mt CO2 per year of ‘engineered’ removals by 2030, and an expectation for the volume to increase to around 23 Mt CO2 by 2035 and 75-81 Mt CO2 by 2050. The government’s aim is to enable a diverse portfolio of engineered GGRs, and both natural ecosystem-based and novel CDR are considered necessary in the Net Zero Strategy.
- The Committee on Climate Change (CCC), which provides independent advice to the government on its legislated carbon budgets, considers CDR necessary to reach the UK’s climate goals.
- The government is developing markets for novel CDR methods through policy and innovation funding. The UK has dedicated £100m in funding to support various CDR methods and significant funds to CO2 transport and storage infrastructure. Biochar and enhanced weathering are among solutions being funded as part of the ‘GGR-D’ demonstrator programme.
- The government is developing policy on business models to support removals and is exploring future integration of CDR with the UK Emissions Trading System. It has issued a Request for Information for CDR technology developers to provide information about their projects and deployment plans closing on 1 August 2023.
Role for carbon removal in national climate policy
The Net Zero Strategy sets out how the UK government plans to reach net zero with the help of ‘greenhouse gas removals’, otherwise known as carbon dioxide removal. It sets the ambition of deploying at least 5 Mt CO2 per year of ‘engineered removals’ by 2030, in line with the recommendation from the UK’s independent Climate Change Committee’s (CCC) 2021 progress report. The CCC projects 58 and 39 million tonnes of ‘engineered’ and ‘nature-based’ greenhouse gas removals per year, respectively, in the UK in 2050 in its Balanced Net Zero Pathway.
The government has also implemented legally binding environment targets, including increasing tree and woodland cover to 16.5% of total land area in England by 2050. Its 2019 manifesto committed the government to planting 30,000 hectares across the UK by 2025. Within this target, 7,000 hectares would be planted in England, 18,000 in Scotland, 2,000 in Wales and 3,000 in Northern Ireland. The England Trees Action Plan and England Peat Action Plan set out ambitions to achieve net zero emissions by 2050. The devolved administrations of Scotland, Wales and Northern Ireland are responsible for their own trees and peatlands.
The UK has ambitions to build a significant carbon capture, utilisation and storage (CCUS) sector with plans in motion to develop CCUS ‘clusters’ as hubs with co-located emitters and CO2 transport & storage infrastructure. The government has signalled that it is looking to enable CDR projects which make use of CCS technology, such as direct air capture (DAC) and bioenergy with CCS (BECCS), as part of the first CCUS clusters.
Relevant legal frameworks
The Climate Change Act 2008, through the 2050 target amendment, commits the UK government in law to reaching net zero emissions by 2050. The Act requires the government to set legally binding ‘carbon budgets’ which cap the amount of greenhouse gases emitted in the UK over successive five-year periods. The independent Climate Change Committee advises the government on the appropriate level of each budget and reports annually to Parliament on progress in emissions reductions. Since climate change policy is devolved, the Devolved Administrations in Scotland, Wales and Northern Ireland have their own statutory emissions reduction targets. The Climate Change (Scotland) Act 2009 commits Scotland to an earlier net zero emissions target of 2045.
The Climate Change Act currently only recognises removals from the LULUCF sector as contributing to UK carbon budgets. The Energy Security Bill which is currently progressing through Parliament seeks to rectify this discrepancy by broadening the definition of ’removals’ in the Climate Change Act to include ‘engineered’ removals.
The Energy Security Bill also seeks to establish the regulatory framework and support mechanisms for CO2 transport and storage networks and commercial arrangements for industrial CCS. Under the proposed bill, CO2 transportation by pipeline for geological storage operations will require a licence and be overseen by Ofgem as the economic regulator. The bill will also grant the North Sea Transition Authority powers to obtain data from companies with carbon storage licences in order to develop a more comprehensive picture of the UK’s carbon storage potential.
Support for R&D and Innovation
New post-Brexit environmental land management schemes (ELMs) will make progress towards agroforestry and landscape recovery aims and deliver a large proportion of tree planting funding. The Nature for Climate Fund (NCF) has been a vital source of support in these schemes and has provided £33m to ELMs as the main delivery vehicle for incentives for peatland restoration with a further bidding round in 2023. The schemes will replace support from the NCF when it is due to end in 2025. In January 2023, the government announced six new Sustainable Farming Incentive standards, including a hedgerow standard to increase carbon storage and sequestration through increasing miles of managed hedgerows and an agroforestry standard.
The UK government and devolved administrations created nature-based voluntary carbon markets to mobilise private investment through the Woodland Code and the Peatland Code which issue carbon units for forestry and peatland restoration. A new compliance mechanism under the Environment Act 2021 could catalyse further investment by requiring developers in England to compensate for the biodiversity impacts of new developments that they cannot improve on-site and deliver biodiversity net gain through the purchase of biodiversity units.
Funding for novel solutions
In 2020, the UK government and its research arm, UKRI, provided £100 million for research, development and demonstration of GGR across multiple programmes. This funding includes allocations for a central hub for carbon removal and five land-based CDR demonstrator projects including enhanced weathering and biochar. It also includes a competition on Direct Air Capture and other Greenhouse Gas Removal technologies. This programme aims to produce several operational pilot plants by 2025. Phase 1 of the £60 million programme delivered 22 feasibility studies across DAC, Enhanced Weathering, Biochar and BECCS technologies. In phase 2 of the competition, £54.4m of government funding was awarded to 15 selected demonstration projects in 2022.
Significantly higher funds have been committed towards the development of the CCUS industry and CO2 transport & storage infrastructure. The Spring Budget 2023 promised £20 billion of funding for CCUS over the following 20 years, building on the £1 billion CCUS Infrastructure Fund the government created to support the capital costs of strategic CCUS infrastructure. The UK government is looking to enable CDR projects to bid for support to join the developing CCUS clusters programme and is reviewing applications from power BECCS projects. On 18 May 2023 the North Sea Transition Authority awarded a first round of 20 carbon storage licences at offshore sites.
The UK government has recognised that novel CDR solutions require government support and stronger deployment incentives in order to scale. In July 2022, it published a consultation on engineered GGR business models that could support technologies such as DACCS, seawater CO2 removals, and certain BECCS applications on a technology-neutral basis. The government is due to provide an update on GGR business models in 2023. The responses to a previous Call for Evidence suggest that a Contracts for Difference (“CfD”) scheme may be the front-runner policy for supporting removals. The government published a later response to a separate power BECCS consultation in March 2023, setting out its position on how renewable energy generation and carbon removal would be doubly incentivised through contracts for difference.
On the horizon
- The government is expected to set out its thinking on whether CDR should be included in the UK Emission Trading System (ETS) based on the outcomes of a 2022 UK ETS consultation in the coming weeks.
- The government will publish a Biomass Strategy in 2023, which will review the amount of sustainable biomass available to the UK and the role it should play in carbon removal technologies. The Net Zero Department’s Chief Scientific Adviser has commissioned an assessment of the net negativity of BECCS and sustainability of biomass inputs, also expected in 2023.
- A Land Use Framework is expected to set out how competing priorities for land will be managed in 2023 with implications for net zero delivery through nature restoration and domestic biomass production. It is expected to be ready in the summer.
- In March 2023, the government announced that it will consult on the specific steps and interventions needed to support the growth of high integrity voluntary markets and protect against greenwashing. The consultation is expected to launch in 2023.
- The UK’s national standards body will facilitate an industry-led process to develop investment standards for nature markets and ecosystems in 2023.
- In March 2023, the government committed to holding a consultation on requiring private companies to disclose their net zero transition plans.
- The UK government has issued a Request for Information for CDR technology developers to provide information about their projects and deployment plans. This will ensure policymaking is informed by the most up-to-date evidence on the projects that will be interested in applying for government support. The Request for Information will close on 1 August 2023.
- Net zero target: 2050
- Net Negative Target:
- First interim target: 2030
- Type of interim target: Emissions reduction target
- GHGs covered: Carbon dioxide and other GHGs
- Separate target for emission reduction and removals: Yes
- Comprehensive CDR Target: no
- CDR Target for Conventional Removals: no
- CDR Target for Novel Removals: yes
- Historical emissions: No
- Annual reporting mechanism: Annual reporting
- Plans for carbon removal (CDR): Yes (nature-based and CCS-based removals)
- Planning to use external carbon credits: Yes
- Conditions on use of carbon credits: No conditions specified
- Department for Energy Security and Net Zero (DESNZ)
- Department for Environment Food and Rural Affairs (Defra)
- HM Treasury
- The Climate Change Committee (CCC)
- UK Research and Innovation (UKRI)