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Climate Policy and Carbon Removal: What the Science and Governments Are Saying

Earthmover Policy Team
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The scientific case for carbon dioxide removal as a necessary component of global climate strategy has never been clearer — or more urgent. The IPCC's Sixth Assessment Report, published in stages between 2021 and 2023, found that essentially all pathways to limiting global warming to 1.5°C above pre-industrial levels require significant CDR deployment, both to offset unavoidable residual emissions from hard-to-abate sectors and, in many scenarios, to achieve net negative emissions in the second half of the century to compensate for overshoot. Yet despite this scientific consensus, the policy frameworks to actually drive CDR deployment at scale remain woefully underdeveloped in most countries.

This article surveys the state of climate policy and CDR from three perspectives: what the science says about the role of carbon removal in climate stabilization scenarios; how the major emitting governments — the United States, European Union, United Kingdom, and others — are approaching CDR policy; and what gaps remain between the science-informed ambition and the policy reality. It is written for policy professionals, corporate sustainability teams, and climate market participants who want to understand the regulatory and policy environment that will shape CDR deployment over the next decade.

What the IPCC Says: CDR Is Not Optional

The IPCC Sixth Assessment Report (AR6) synthesized the state of climate science and modeled pathways to global temperature targets with unprecedented detail. Its conclusions about CDR are unambiguous: in all pathways that limit warming to 1.5°C with no or limited overshoot, CDR plays a significant role. The modeled CDR deployment ranges widely — from around 1 billion tonnes per year to 20 billion tonnes per year by 2050, depending on how rapidly emissions are reduced in other sectors. But there is no credible 1.5°C scenario in the IPCC analysis that relies on emissions reductions alone, without any carbon removal.

The IPCC also notes that the choice between CDR approaches matters enormously for sustainability outcomes. Large-scale deployment of bioenergy with carbon capture and storage (BECCS) — which appears in many integrated assessment models as the dominant CDR pathway — would require enormous areas of productive land to grow energy crops, potentially competing with food production and biodiversity conservation. Direct air capture, by contrast, requires minimal land but substantial energy — and its decarbonization depends entirely on the carbon intensity of that energy. The report emphasizes the importance of a portfolio approach to CDR that includes both biological and engineered methods, and stresses that deploying CDR alongside rapid emissions reductions — not as a substitute for them — is essential for limiting overshoot and its associated risks.

US Policy: The IRA and the DOE Carbon Negative Shot

The United States has taken the most significant government policy steps toward CDR deployment of any major economy, driven primarily by the Inflation Reduction Act (IRA) of 2022 and the Biden administration's Department of Energy initiatives. The IRA substantially enhanced the 45Q tax credit for carbon capture and storage, raising the credit for direct air capture with geological storage to $180 per tonne — a level that, when combined with low-cost renewable energy, begins to approach the breakeven point for early commercial DAC projects. The credit is designed to step down as technology matures, providing a transitional support mechanism rather than a permanent subsidy.

The DOE's Carbon Negative Shot, launched in 2021, set a target of achieving carbon removal at a cost below $100 per tonne with less than 1 tonne of CO2-equivalent lifecycle emissions by 2032. To support this target, the DOE has committed $3.5 billion toward development of four large-scale DAC hubs — regional facilities that will aggregate multiple DAC projects with shared CO2 transport and storage infrastructure, benefiting from economies of scale. The first hub funding awards were announced in 2023, with projects in Louisiana and Texas leading the initial phase. These hubs, if successfully developed, will provide the demonstration-scale evidence that DAC can be deployed at competitive costs, potentially unlocking the next wave of private investment.

EU Policy: The Carbon Removal Certification Framework

The European Union has taken a regulatory rather than primarily fiscal approach to CDR, focused on establishing the measurement and certification infrastructure needed to support a European carbon removal market. The EU Carbon Removal Certification Framework (CRCF), proposed by the European Commission in 2022 and working through the legislative process through 2023 and into 2024, establishes quality criteria and certification requirements for four categories of carbon removal: permanent geological storage (primarily DACCS and BECCS), carbon farming (soil and forest carbon), ocean-based removal, and carbon storage in products (biochar, building materials).

The CRCF is notable for its explicit focus on measurement quality. It requires that removal activities meet standards for quantification (using accurate, robust, and science-based measurement), additionality (demonstrating that removal would not occur without the financial incentive), long-term storage (with monitoring and liability requirements calibrated to the permanence of the storage approach), and sustainability co-benefits. The framework is intended to create a trusted EU label for carbon removal credits that can be used in both voluntary markets and future compliance frameworks, potentially including integration into the EU Emissions Trading System (ETS) for hard-to-abate sectors.

UK Policy: Direct Air Capture and the British Carbon Market

The United Kingdom has been an early mover in government support for direct air capture, driven partly by domestic industrial policy ambitions and partly by the UK's legally binding net-zero target under the Climate Change Act. The UK's Direct Air Capture and Other Greenhouse Gas Removals Programme, administered by DESNZ (the Department for Energy Security and Net Zero), has run competitive grant funding rounds for early-stage DAC projects and is developing a longer-term Carbon Capture and Storage Infrastructure fund. The UK's Climate Change Committee has recommended that UK emissions scenarios include significant CDR deployment from the 2030s onward, with 5 million tonnes per year of engineered removal needed by 2035 and growing thereafter.

The UK is also developing the voluntary carbon market regulatory framework under the Financial Conduct Authority's remit, with the aim of creating a regulated, high-integrity voluntary carbon market that supports UK net-zero targets. The UK's position outside the EU following Brexit has created both an opportunity and a challenge in carbon market design — the UK ETS operates independently of the EU ETS, and coordination with EU carbon market policy will be important for efficient international carbon trade under Article 6 of the Paris Agreement.

Gaps and Challenges: Where Policy Needs to Go

Despite this policy progress, significant gaps remain between the CDR deployment implied by climate science and the policy ambition actually in place. The most fundamental gap is the absence of large-scale demand creation mechanisms in most countries. The 45Q tax credit in the US improves project economics, but it does not create a guaranteed demand signal — projects still need to find buyers for their credits in an uncertain market. The EU CRCF establishes quality standards but does not yet create compliance demand for CDR. Without clear demand signals at scale — whether through carbon pricing, emission performance standards for hard-to-abate sectors, or government procurement commitments — the private investment required to scale CDR supply will not flow at the necessary pace.

A second major gap is in MRV infrastructure. Every policy framework for CDR quality ultimately depends on the ability to measure, report, and verify carbon removal accurately and cost-effectively. Yet the public infrastructure for CDR monitoring — ocean sensors, soil carbon monitoring networks, standardized reporting frameworks — is still nascent. The private sector, including companies like Earthmover, is filling part of this gap, but public investment in monitoring infrastructure is also needed to ensure that CDR accounting is robust, consistent, and publicly trusted. Governments that are serious about CDR deployment need to invest in the measurement science and infrastructure as urgently as they invest in the production technology.

Key Takeaways

  • The IPCC AR6 found that all credible 1.5°C pathways require significant CDR — ranging from 1 to 20 GtCO2/year by 2050 depending on the pace of emissions reductions.
  • The US IRA's 45Q tax credit ($180/tonne for DAC with geological storage) and $3.5B DOE DAC hub funding are the most significant CDR policy measures implemented globally to date.
  • The EU Carbon Removal Certification Framework establishes quality criteria for carbon farming, permanent storage, ocean-based removal, and product storage — a regulatory quality label for the EU market.
  • The UK Direct Air Capture Programme and planned carbon market regulation position the UK as an early mover in government-supported CDR deployment.
  • The critical missing policy elements are large-scale demand creation mechanisms (carbon pricing, compliance mandates) and public investment in MRV infrastructure.
  • Policy ambition significantly lags scientific requirement — the CDR deployment needed by 2050 dwarfs current and planned capacity by several orders of magnitude.

Conclusion

Climate policy is slowly catching up to the scientific imperative for carbon removal, but "slowly" is the operative word. The policy frameworks being developed in the US, EU, and UK are meaningful steps — establishing quality standards, providing fiscal support, and creating nascent demand signals — but they are far from sufficient to drive CDR to the scale required by mid-century. Closing that gap will require bolder demand creation policies, larger public investments in measurement and monitoring infrastructure, and international coordination on carbon market frameworks that can direct capital to the most cost-effective CDR opportunities globally. At Earthmover, we are working to ensure that when policy ambition and investment capital do align, the measurement and verification infrastructure to make that investment credible and accountable will be ready. The policy environment is improving; our job is to make sure the science keeps pace.