Curbing global warming in line with the Paris Agreement will require removing 16 billion tonnes of carbon dioxide (tCO2e) from the atmosphere by 2050, according to a new report from Bloomberg New Energy Finance (BNEF). This massive undertaking highlights the challenges and opportunities facing emerging technologies in the voluntary carbon market.
In 2015, global leaders committed to keeping temperature increases below 2 degrees Celsius, preferably aiming for a 1.5C rise above pre-industrial levels . Current trends show temperatures have already risen by 1-1.2C, with scientists warning that the 1.5C threshold could be breached within a few years .
BNEF's report outlines the Net Zero Scenario (NZS), which aims to limit global temperature rise to 1.75 degrees Celsius by 2100. This scenario necessitates extensive use of carbon capture and storage (CCS) and engineered carbon dioxide removal (CDR) technologies, projecting a total reduction of 160 billion tCO2e from 2024 to 2050 .
Oktavia Catsaros, Communications Director at BNEF, explained that 90% of the necessary CO2 reductions will come from capturing emissions at their source, while the remaining 10% will involve direct removal from the atmosphere . Despite recent advances, current carbon removal technologies have only managed to sequester around 0.1 million tonnes of CO2, with forward purchases amounting to 4.5 million tonnes .
Without these emissions reductions, the world is on track for a 1.9C increase in temperatures by 2050. The report warns that failing to scale up decarbonization technologies, such as green hydrogen or bioenergy, could lead to dire consequences .
BNEF also presents an Energy Transition Scenario (ETS), which relies solely on historical efficiency trends and currently economically viable clean energy technologies. This scenario would result in a 2.6 degrees Celsius rise above pre-industrial levels by 2100, underscoring the necessity of CCS and CDRs to meet climate goals .
The NZS scenario, while costing an estimated $215 trillion, is only 19% more expensive than the ETS scenario, suggesting that the additional investment is a worthwhile expenditure to achieve full decarbonization by 2050 .
The pace of clean technology deployment and capital investment has surged to record levels, yet emissions remain stubbornly high. BNEF asserts that achieving carbon neutrality by mid-century is a challenging but attainable goal, provided there is a rapid ramp-up of renewable energy sources and green fuels .
A key factor in accelerating decarbonization is carbon pricing. Unlike the power and transport sectors, where net-zero options are becoming competitive, industries lack fully decarbonized production routes that are cost-effective. Thus, subsidies or carbon pricing mechanisms are crucial to drive emissions reductions in these hard-to-abate sectors .
The path to meeting the Paris Agreement goals is fraught with challenges but also opportunities for innovation and investment in carbon removal technologies. By scaling up CCS and CDR efforts and implementing effective carbon pricing, achieving net-zero emissions by 2050 remains within reach.