Mapping Multi-Level Policy Incentives for Bioenergy With Carbon Capture and Storage in Sweden

Abstract

Bioenergy with carbon capture and storage (BECCS) is considered a key mitigation technology in most 1.5–2.0°C compatible climate change mitigation scenarios. Nonetheless, examples of BECCS deployment are lacking internationally. It is widely acknowledged that widespread implementation of this technology requires strong policy enablers, and that such enablers are currently non-existent. However, the literature lacks a more structured assessment of the “incentive gap” between scenarios with substantive BECCS deployment and existing policy enablers to effectuate BECCS deployment. Sweden, a country with progressive climate policies and particularly good preconditions for BECCS, constitutes a relevant locus for such examinations. The paper asks to what extent and how existing UN, EU, and Swedish climate policy instruments incentivize BECCS research, development, demonstration, and deployment in Sweden. The analysis is followed by a tentative discussion of needs for policy reform to improve the effectiveness of climate policy in delivering BECCS. Drawing on a tripartite typology of policy instruments (economic, regulatory, and informational) and the ability of these instruments to create supply-push or demand-pull, the article finds that: (1) no instruments create a demand-pull to cover operational expenditure; (2) economic instruments provide partial support for research and the capital expenditure associated with demonstration, and; (3) regulatory instruments provide partial clarity on environmental safeguards and responsibilities. A few regulatory barriers also continue to counteract deployment. The article concludes that the existing policy mix requires considerable reform if BECCS is to contribute substantially to the Swedish target for net-zero emissions. Continued effort to dismantle regulatory barriers must be complemented with a strong demand-pull instrument that complements the current focus on supply-push incentives. If unreformed, the existing policy mix will most likely lead to substantial public expenditure on BECCS research, development, and demonstration without leading to any substantial deployment and diffusion.

Cancel (Out) Emissions? The Envisaged Role of Carbon Dioxide Removal Technologies in Long-Term National Climate Strategies

“…While CDR has the potential to cancel out future emissions, currently much CDR faces a number of uncertainties related to technological developments, economic considerations and public acceptance, meaning they are not a particularly attractive policy choice (Smith et al, 2015;Williamson, 2016;Bui et al, 2018;Fridahl and Lehtveer, 2018;Gough et al, 2018;Bellamy and Geden, 2019;Fridahl et al, 2020b). The moral hazard debate highlights the potential tradeoffs and the positive synergies between CDR and emission reductions, different CDR methods (Levihn et al, 2019;Fridahl et al, 2020b) and between CDR and the sustainable development goals, SDGs (IPCC, 2018(IPCC, , 2019Honegger et al, 2020). Understanding the nature and likelihood of such tradeoffs or synergies is important when examining the conditions for CDR deployment.…”

Attitudes on Carbon Capture and Storage (CCS) as a Mitigation Technology within the UNFCCC

“…The challenge for CCS deployment at a scale sufficient to make a difference for the climate is marked by a persistent inability of governments to agree on conducive policy environments for CCS. The lack of policy support is particularly obvious for BECCS, but pricing mechanisms and other policy instruments intended to spur CCS have also failed to provide incentives that are both robust and sufficiently high for companies and investors to engage with CCS at scale [45]. There is surely scope for further technology development, with new and promising pre-combustion technologies in development [46], but post-combustion technology is by large already well proven.…”

Who Is Paying for Carbon Dioxide Removal? Designing Policy Instruments for Mobilizing Negative Emissions Technologies

“…These reasons all characterize the continuous and largescale removal of CO 2 into permanent storage as a public good, which in many cases requires a systematic long-term public intervention. Yet, to date governmental action -beyond earlystage research and development funding -appears to be lagging and causing a systematic "incentive gap" (Fridahl et al, 2020). Calls for examining and mobilizing various CDR potentials are growing (e.g., Bellamy, 2018;Geden et al, 2019) and an increasing number of private companies and philanthropies are starting to voluntarily mobilize CDR.…”