Driving down the cost of carbon removal: why innovation matters

Unlocking the sector's full innovation potential would require far more than current levels of private capital and voluntary market demand. Governments are uniquely positioned to mitigate risks of early projects, fund knowledge-sharing and stimulate markets in ways that accelerate cost reductions. Building on best practices for promoting technological innovation, and considering the specific needs of CDR, several important levers stand out:

Governments can co-fund a global portfolio of pilot and demonstration projects. Not every CDR option will scale to the million-tonne level within a decade, but testing a wide set of approaches is essential to identify which are the most promising, while also filling critical RD&D gaps.

Open-access CDR testbeds can dramatically lower the risks innovators face. Facilities where new capture materials or system designs can be independently evaluated cut both time and costs, enabling better access to finance.

Governments can help build demand and boost investors' confidence. Advance purchase commitments for CDR credits are one way to provide the long-term demand certainty that voluntary markets alone cannot deliver, and they can help attract private capital. Public procurement can also generate valuable data - on costs, performance, and monitoring, reporting and verification - that governments can share to help the entire field advance. The integration of carbon removals in compliance and international carbon markets, along with supporting policies such as carbon contracts for difference (CCfD), offer additional pathways to build sustainable CDR markets.

Robust frameworks for monitoring, reporting and verification should evolve alongside deployment. These processes are crucial to ensure the integrity of removals, yet significant knowledge gaps remain in assessing and certifying storage permanence, particularly for open-system approaches. Governments are uniquely placed to coordinate two-way data flows between projects and researchers, and to improve models, guide field trials and inform certification frameworks. They can also ensure the adoption of common standards and definitions across jurisdictions. International initiatives such as Mission Innovation's CDR Mission already show how cross-border collaboration can accelerate learning and minimise duplication.