The Economics of Emerging Carbon Dioxide Removal Technologies

This paper develops a techno-economic framework for comparing alternative carbon dioxide removal (CDR) technologies. The key financial cost metric emerging from our framework is the Levelized Cost of CDR (LCCDR). It represents the minimal off-take price per net ton of CO2 durably removed that an investor would need to receive in order to break even on a given project. Our analysis accounts for leakage (offsetting process emissions) and co-product revenues, including applicable tax subsidies. The four technologies examined here, Biomass Carbon Removal and Storage (BiCRS), Bioenergy with Carbon Capture and Storage (BECCS), Enhanced Rock Weathering (ERW), and Direct Air Capture (DAC), all have the potential to remove CO2 at gigaton scale. In the context of the current U.S. market and regulatory environment, we identify a remarkably wide interval of LCCDR values ranging from $29 to $1,076 per ton of CO2. We relate our cost findings to prices reported under existing offtake agreements and discuss the potential as well as the remaining uncertainties for each of these four carbon removal technologies.