Carbon Dioxide Removal (CDR) represents a critical component in achieving net-zero emissions, where technical and economic constraints prevent full mitigation. When the EU Emissions Trading System (ETS) cap approaches zero, the integration of permanent CDR into the system is essential for counterbalancing residual emissions.

This policy perspectives report investigates the economic impacts of incorporating CDRs into the EU ETS framework, focusing on market stability, cost-efficiency, and the reduction of abatement costs. The analysis demonstrates that the integration of CDRs could enhance market liquidity, reduce transaction costs, and provide flexibility for industries meeting abatement targets. Furthermore, CDR integration is shown to offset high-cost abatement measures, minimizing welfare losses and lowering the overall cost of meeting climate objectives.

The upscaling of novel carbon dioxide removal, such as bioenergy carbon capture and storage (BECCS), to gigatonne scales is an urgent priority if global warming is to be limited to well below 2 °C. But political, economic, social, technological, environmental and regulatory uncertainty permeates BECCS projects and deters investors. To address this, we explore options to improve the robustness of BECCS deployment strategies in the face of multi-dimensional uncertainties. We apply Dynamic Adaptive Planning (DAP) through expert interviews and Robust Decision Making (RDM) through exploratory modelling, two decision making under deep uncertainty methods, to the case of Stockholm Exergi, an early mover aiming to deploy BECCS at a combined heat and power plant in the capital of Sweden. The main contributions of the research are to 1) illustrate how a quantification of robustness against uncertainty can support an investment decision to deploy BECCS 2) comprehensively cover uncertain vulnerabilities and opportunities of deploying BECCS, and 3) identify critical scenarios and adaptations to manage these uncertainties. The main conclusions are: investing in BECCS is relatively robust if assessing performance across many scenarios and if comparing the worst-cases of either investing, or not doing so. Not investing could miss out on up to € 3.8 billion in terms of net present value. The critical uncertainties of BECCS can be managed by strengthening biomass sustainability strategies and by gaining support for negative emission trading regulation on carbon markets, e.g., voluntary or Paris Agreement Article 6. Even in vulnerable scenarios of average electricity prices above 82 €/MWh, if trading regulation is implemented before 2030 and if negative emission prices exceed 151 €/CO2, investing in BECCS performs better than not doing so in 96% of cases. We suggest that facility-level parameters and cost-reductions are of little importance for BECCS investments and upscaling. It is regulatory certainty of operating revenues, e.g., through negative emission markets, that needs to be provided by policymakers.

This technical report provides input to the European Unions Commissions work on the delegated acts related to the carbon removal certification framework and provides specifically technical context to the calculations of GHGassociated. Specifically it refers to calculations of “GHGassociated” and “the 25% issue”.

The ICF draft methodology provides problems in relation to real life design of BECCS facilities through definitions provided in chapter 4 which is not demanded by CRCF chapter 2 1.c. These formulation leads to perverse incentives where design of capture facilities might be adopted to optimize calculation procedures rather than provide technoeconomic efficient designs of the physical capture facilities. There is also a double accounting problem as LCA emissions from biomass used as well as electricity, steam and/or heat generated by the same biomass can be interpreted to be included in the calculation of GHGassociated.

When designing a BECCS capture facility, energy can be used, recovered and generated as part of the capture process. There are many examples of such applications covering different capture technologies. Some are more integrated to heat flows, while others rely on mechanical work and thus are more integrated to either electricity or steam cycles. This text provides three examples related how to technically design the pressurization step of a pressurized capture technology. Similar examples can be provided for other parts or technologies upon request, but these should illustrate the problem.

All what is stated here refers to BECCS applications but should also be considered for DACCS methodologies.

The capability to dynamically plan, predict, and control indoor conditioning allows to adapt to individual preferences of inhabitants and enables demand side management. While former mainly improves thermal comfort of inhabitants so does latter unlock ecological and financial opportunities mostly for energy utilities. Commonly, dynamic indoor conditioning is based on piece-wise constant indoor temperature constraints. This paper's contribution is the presentation of additional constraints: in particular ones expressed relative to the nominal behavior of a hydronic heating system. This allows to simultaneously harness the relevant process variables in particular during the pre-loading and post-loading phases of a load reduction. The findings are based on data sets acquired on 10 inhabited, residential buildings in Stockholm over a whole year. One of the findings is that building models need to be adaptable if predictive control is applied in practice. This adaptability is assured by a novel concept, i.e. a so called model manager on which the control is relying for the selection of the most accurate model. Centralized optimal control of buildings connected to a district heating network is challenging in practice due to a high computational load. In order to reduce it, the herein presented method elaborates plans only every hour instead of at every control step for optimal control. Since these plans cannot be optimal due to the lack of regular update a hitherto unknown cascaded control logic has been developed that corrects planning errors and other disturbances. Capabilities are demonstrated and compared to conventional controllers in dynamic simulations of a multi-zoned building. The herein presented method is to our knowledge the first to provide all flexibility desired by energy utilities and inhabitants alike through harnessing the consequences of transitions. 

Managing intertemporal price risk in the long term is essential to make investments in renewable power generation bankable. When the derivative markets don't delivery enough price hedging products nor market liquidity, many rely on bilateral hedging by means of Power Purchase Agreements (PPAs). With the fast pace of change in power system fundamentals that Europe is now facing, effective PPA markets can play a key role in enabling a smoother transition to renewables. This paper aims to describe the price discovery process in bilateral hedging in the Nordic PPA markets, as well as their most important terms and conditions to understand how the markets can respond to challenges in the changing business environment. The paper finds that there is a need for stronger price references and more transparent price discovery processes in PPA markets, e.g. by means of standardized and more short-term contracts to reduce transaction costs and improve market access.

Bio-energy with carbon capture and storage (BECCS) is widely recognised as an important carbon dioxide removal technology. Nevertheless, BECCS has mostly failed to move beyond small-scale demonstration units. One main factor is the energy penalty incurred on power plants. In previous studies, this penalty has been determined to be 37.2 %?48.6 % for the amine capture technology. The aim of this study is to quantify the energy penalty for adding the hot potassium carbonate (HPC) capture technology to a biomass-fired combined heat and power (CHP) plant, connected to a district heating system. In this context, the energy driving the capture process is partly recovered as useful district heating. Therefore, a modified energy penalty is proposed, with the inclusion of recovered heat. This inclusion is especially meaningful if the heat has a substantial monetary value. The BECCS system is examined using thermodynamic analysis, coupled with modelling of the capture process in Aspen PlusTM. Model validation is performed with data from a BECCS test facility. The results of this study show that the modified energy penalty is in the range of 2%?4%. These findings could potentially increase the attractiveness of BECCS as a climate abatement option in a district heating CHP setting.