Business model options for greenhouse gas removal

Business model options for greenhouse gas removal

Achieving the net zero target by 2050 will include the use of some technologies which remove CO2 from the air to offset the fact that some activities will be too difficult or expensive to decarbonise.

One such “greenhouse gas removal” technology is Bioenergy with carbon capture and storage (BECCS).  CO2 is absorbed during the growth of the bioenergy feed stock, and then this CO2 is captured and permanently stored on use. 

Tackling climate change with BECCS

There are a number of uses of BECCS, including for power generation. However, at present, there are significant barriers to investment in BECCS.  In particular, under current market frameworks, BECCS would not be fully compensated for the emissions savings that it can deliver.

Overcoming barriers to incentivise investment

Frontier Economics was commissioned by Drax to develop and evaluate business model options for BECCS in power that could help deliver timely investment in the process.

Our research finds that there are a number of business options available in the near term to overcome these barriers. Of these, we find that a two-part model combining a power CfD and a carbon payment is preferable. This measure:

  • addresses identified market failures;
  • can be implemented relatively easily and in time to capture benefits of early BECCS in power investment; and
  • can be structured to ensure an efficient outcome for customers.

You can read more about our findings here, in our report for Drax.

Frontier regularly advises on technologies used as part of the transition to net zero. For more details please contact us at or at +44 (0) 20 7031 7000.