The IPCC outlines how impacts of climate change are already upon us, affecting billions of people around the world and threatening to cause major disruptions to economic, social, and environmental systems. Despite real signs of progress in the clean energy transition, collective global efforts to date are frankly inadequate to avoid the worst impacts from climate change and reverse an increase in carbon emissions. Global society stands at a crossroads and must ratchet up its ambition to tackle climate change and usher in a more clean, prosperous, and secure future for all. Rapid and deep reductions in global emissions are a first-order priority, but must now be augmented by a concerted effort to scale up to remove large quantities of carbon dioxide from the air and to rapidly and profoundly decarbonize key energy sectors to achieve globally shared climate goals.

The findings of the Working Group III Sixth Assessment Report reflect this reality, a reality that is also the driving mission of Carbon Direct Inc. We are a science-first organization backed by a team of over 40 of the world’s leading carbon scientists with expertise in all areas of carbon management. Together, we are working to decarbonize the global economy across our client advisory services and software solutions. We manage millions of tonnes of CO2 for our clients, from carbon footprinting to carbon removal procurement, and are driven by a singular goal: real climate impact.

The following commentary is our own analysis of the AR6 WGIII Report’s key findings and their implications for carbon management.

Introduction to Our Commentary on the AR6 WGIII IPCC Report

The Intergovernmental Panel on Climate Change (IPCC) Working Group II (WGII) released a sobering assessment of the impacts of climate change on human and natural systems in February. This Sixth Assessment Report (AR6) found that climate change is already causing major adverse disruptions to both of these systems around the world through a range of extreme weather and climatic events, of which some of the negative impacts are likely to be irreversible. Moreover, the most vulnerable populations and ecosystems are experiencing impacts to a greater extent – roughly half the world’s population (3.5 billion people) and millions of species live in “highly vulnerable” areas.

On the heels of that report comes the IPCC’s Working Group (WGIII) contribution to AR6, released this week against the backdrop of Russia’s invasion of Ukraine: Climate Change 2022: Mitigation of Climate Change. It details the state of knowledge around mitigation options for both reducing greenhouse gas (GHG) emissions into the atmosphere and also removing carbon dioxide (CO2) from the atmosphere.

One important finding is immediately clear: we need more actions and solutions.

• Despite real progress in clean energy innovation, technology, and cost breakthroughs, and the growth and strengthening of climate targets across the public and private sectors, the world remains far off course from reaching the goals of the Paris Agreement [1]. The 2015 Paris Agreement requires that for future climate neutrality a balance of sources and sinks must need to be achieved, where each single tonne of anthropogenic CO2 equivalent (CO2e) residual emissions into the atmosphere will have to be neutralized by a tonne of CO2 removed from the atmosphere.
  
  

• Emissions are still on the rise. Although a temporary drop in global emissions was observed with the COVID-19 pandemic, energy-related CO2 emissions rebounded and rose by 6% in 2021 – the largest absolute annual increase ever recorded, to the highest emission level ever – due to an economic recovery that saw greater use of coal to provide energy services.
  
  

• Half of the emissions reductions required for 1.5˚C stabilization must come from industrial sectors (steel, cement, chemicals) and non-CO2 greenhouse gases (methane, nitrous oxides, fluorinated gases).

This reality illustrates the enormous challenge of the energy transition and efforts to reach global net-zero emissions. Society must explore all possible options now to bring global emissions to near zero and actively remove large quantities of historical CO2 emissions from the atmosphere to stave off the worst impacts from climate change.

This new report identifies and delineates many key pathways that are now well understood and already under way, such as growth in renewable power, the progress toward greater energy efficiency, and vehicle electrification. What’s noteworthy and new in the report is that it includes emphasis on two additional key pathways: carbon removal and industrial decarbonization. The report also highlights the central importance of combining large-scale capital investment with technological innovation.

State of Climate Action: Successes and Remaining Challenges

Despite the recent growth in global emissions and increasingly severe climate impacts being experienced around the world, awareness of climate change and societal support for taking action to address the problem is also on the rise (IPCC WGIII Technical Summary). The new report provides evidence that society is making progress toward mobilizing proper policies and investments to support the clean energy transition and climate mitigation (deep abatement through avoidance, reduction, and removal of greenhouse gas emissions), listed in Table 1.

However, there remain major challenges to ensuring that global emissions start to decline as soon as possible and reach near zero by mid-century. During the period 2010-2019, the world recorded its highest decadal average emissions level on record at 56 billion metric tonnes of carbon dioxide equivalent (GtCO2e) per year, which also included increases in emissions across all economic sectors (particularly transportation and industry) and different types of GHG emissions (beyond just CO2) [2].

Unfortunately, current climate pledges at the country level remain wholly inadequate to align society with a temperature trajectory that limits warming to no more than 1.5°C (and are minimally compliant with a likely chance to limit warming to no more than 2°C) (IPCC WGIII Technical Summary; Glynn et al. 2022). In other words, the current nationally determined contributions will result in an overshoot above 1.5°C (the “emissions gap”) absent more stringent climate policies that are supported by actual project finance and rapid deployment (the “implementation gap”). The remaining carbon budget for a likely chance of remaining below 1.5°C of warming is estimated at around 400 GtCO2, which is equivalent to the cumulative net CO2 emissions from 2010-2019.

Furthermore, expected future emissions from existing fossil fuel infrastructure (“locked in emissions”) already exceeds the remaining carbon budget for 1.5°C with limited (or no) temperature overshoot (IPCC WGIII Technical Summary). Mitigation pathways that might limit warming to no more than 1.5°C or 2°C are therefore extremely ambitious, requiring profound reductions over the next several decades (Table 2).

A selection of specific actions and strategies that need to occur to help realize the clean energy transition and achieve climate goals are shown below (IPCC WGIII Technical Summary). These include reducing energy demand through conservation and efficiency; reducing fossil fuel consumption; shifting investment to clean energy and increasing production of low- and zero-carbon energy resources; and increased electrification across all sectors. A few recommended actions stand out as relatively new and part of a comprehensive net-zero strategy:

• Increased use of alternative energy carriers and clean fuels such as hydrogen and ammonia
  
  

• Near elimination of unabated coal use (i.e., without carbon capture and storage [CCS])
  
  

• Achievement of net-zero emissions in the agriculture, forestry and other land use sector between 2020 and 2070
  
  

• Increase in forest cover
  
  

• Atmospheric carbon removal at large scale
  
  

Closing the Emissions Gap with Carbon Removal

Both the IPCC WGIII Report and its Special Report on Global Warming of 1.5°C assert with strong evidence that carbon dioxide removal (CDR) is now necessary to meet our global climate goals. The Physical Science Basis Report from Working Group I substantiated that point: anthropogenic CDR has the potential to remove and durably store CO2 from the atmosphere and thus may contribute to mitigation, notably to the increased probability of avoiding low-likelihood, high-impact and “tipping points” outcomes possible with higher global warming levels.

This is a significant evolution from the IPCC’s 2018 report, which indicated that reliance on large-scale deployment of CDR would be a “major risk” to achieving the goal of less than 1.5°C of warming, given the uncertainties at that time in how quickly CDR can be deployed at scale. The current report substantiates the fact that sufficient CDR progress has been made to lower that risk significantly.

All likely scenarios for 1.5°C and 2°C stabilization include many billions of tons annually of CDR (Figure 1) cumulatively reaching hundreds of billions of tons by the end of the century. Nor is this limited just to balancing CO2 emissions – the authors state specifically that “reaching net zero GHG emissions requires net negative CO2 emissions to balance residual CH4, N2O and F-gas emissions” as a clear and unambiguous case for CDR. This acknowledged need for net-zero GHG, not just net-zero CO2, leads the authors to generate a specific scenario and set of modules detailing a pathway with “Extensive use of net negative emissions (IMP-Neg).”

Developed in tandem with aggressive GHG reduction efforts, CDR serves critical roles to achieve net-zero global emissions that include: 1) lowering net emissions in the near term, by removing atmospheric CO2 to balance out a portion of ongoing emissions to the atmosphere, 2) balancing residual GHG emissions from sectors that may be too technically challenging and/or expensive to fully eliminate from the economy in the foreseeable future, and 3) in the long term, achieving net negative global emissions, which would begin to remove the accumulated stock of atmospheric CO2 from human activities historically. This final role might be particularly important if global temperatures overshoot the 2°C target, a scenario that is certainly possible given the insufficient global progress to date on emissions reduction [3].

Large-scale CDR is an essential pillar of strategies to limit warming to no more than 1.5°C and a crucial tool for scenarios that limit warming to no more than 2°C by 2100. Therefore, a rapid scale-up and massive deployment of all viable methods will be required despite a very limited state of commercial deployment at present (IPCC WGIII Technical Summary). Any overshoot above these temperature thresholds will require even more carbon removal; the greater the temperature overshoot, the greater the reliance on additional carbon removal to counterbalance the warming. Similarly, arithmetic requires that any net-zero commitment employs CDR to balance any emissions from any sector (Friedmann et al., 2021). Acknowledging that arithmetic, the 2021 IPCC report by Working Group I (physical science) also included a characterisation of CDR methods and their technical sequestration potential.

Figure 1: Mitigation pathways that limit warming to 1.5°C, or 2°C, involve deep, rapid and sustained emissions reductions. Net zero CO2 and net zero GHG emissions are possible through different mitigation portfolios. Source: WGII TS, figure TS-10a & TS-10d.

The IPCC authors have used their considerable expert knowledge to produce high-quality estimates of the technical potential for carbon removal to scale up as a material part of global climate strategy and the associated costs [4]. Carbon removal methods with some of the largest estimated cumulative removal contributions by 2100 include BECCS (328 GtCO2, range of 168-763 GtCO2), CO2 removed on managed land (252 GtCO2, range of 20-418 GtCO2), and DACCS (29 GtCO2, range of 0-339 GtCO2) (IPCC WGIII Technical Summary). The authors find that these methods should be complemented by other approaches such as improving soil carbon management practices, despite their lower carbon storage durability [5] and potential rate of carbon removal. Overall, the report recommends aggressive development and deployment of a balanced portfolio of carbon removal methods that considers cost, life cycle assessment of net emissions, durability of carbon storage, ecosystem impacts, co-benefits, governance issues, and social acceptance. This recommendation is important because it acknowledges the difference in durability, scalability, and cost across the spectrum of carbon removal approaches and the need to improve and deploy all methods.

In the climate response and equilibrium models, assessed carbon removal options are mostly limited to BECCS, afforestation & land-use improvements, and direct air CO2 capture and storage (DACCS). Although these modules have improved, this limit highlights the need for both improvement/updating of these modules and creation of additional modules for analysis. For example, report authors acknowledge that carbon removal through some agriculture, forestry, and other land use (AFOLU) measures can be maintained for decades but not over centuries, as these sinks will ultimately saturate and overturn (a key finding from a 2019 IPCC report on Climate and Land-Use Change). As another example, the annual carbon removal from DACCS in the new report, 20 Mt/y, is much, much lower than other recent estimates for the same climate targets (e.g., the IEA Net-Zero analysis (2021) demands 1Gt/y DACS – 50x more flux).

The new report also highlights the substantial annual removal potential of currently limited deployed DACCS, enhanced weathering (EW) and ocean-based carbon removal methods (including ocean alkalinity enhancement and ocean fertilization) and their limitations. With the options to further develop these methods to unlock their potential.

The Voluntary Carbon Market and Policy Needs

The voluntary carbon market (VCM) presents an important mechanism to scale high-quality carbon removal through the creation and sale of credits from carbon removal projects. This market is currently experiencing rapid growth, and reached a total value of more than $1 billion in 2021 through the sale of more than 300 million metric tonnes of CO2e worth of carbon credits across different project types. By 2030, estimates suggest that the VCM could scale to well over $100 billion per year depending on market dynamics and pricing scenarios (despite the VCM currently being dwarfed by the size of compliance markets which generated $53 billion in revenue in 2020). Nonetheless, the rapid growth and anticipated scale up of the VCM is not sufficient to scale and deploy carbon removal to needed levels. The IPCC authors state that deep and sustained public policy support at national and subnational levels is necessary to achieve the needed cumulative tonnage of carbon removal by midcentury and beyond.

Political climate targets and associated policy frameworks need to include carbon removal formally to help incentivize early and ongoing commercial deployment and to support earlier stage research, development, and demonstration. Public policy support will also be needed to help improve the commercial readiness and lower costs for engineered carbon removal approaches that are capable of storing CO2 on timescales from centuries to millennia. The vast majority of credits sold on the VCM today only guarantee carbon storage on a decadal timescale, mostly through forestry projects. This has a climate effect similar to delaying emissions into the atmosphere given that storage in the biosphere is only temporary but can still help delay more severe climate impacts and reduce peak warming. Carbon storage considerations raise the questions of durability and the risk of reversal, and how to use short-term storage as part of robust offsetting claims – all of which we explore in our blog “Accounting for Short-Term Durability in Carbon Offsetting.” However, biophysical limits of natural ecosystems means that these carbon sinks will eventually approach saturation limits and negate the ability for additional carbon storage (for which carbon storage in the biosphere is also prone to physical reversal through events such as wildfires). It is therefore crucial that more carbon removal solutions are pursued that provide highly durable carbon storage opportunities such as direct air capture and storage, carbon mineralization, and ocean alkalinity enhancement.

Importantly, policy and governance frameworks associated with mitigation efforts can help inform integration planning and deployment considerations for carbon removal. A key finding of the new report is that this is doable (IPCC WGIII Technical Summary). Specifically, the authors recommend adapting other successful governance and policy frameworks to accommodate and enable rapid and profound carbon removal deployment and scale-up (e.g., contract for differences for offshore wind; deployment mandates for renewable power). Ocean carbon removal methods require special attention in this regard, and governments should prioritize new governance structures and legal frameworks around it [6].

Winning the Climate War with Industrial EmissionsThe clearest point for reducing CO2 and other GHG emissions is in the industrial sectors – what Bill Gates calls “how we make things” (Gates 2021). Emissions from industrial sectors have grown faster than power, transportation, buildings, and land-use. In fact, material intensity (defined as the “in-use stock of manufactured capital” in tonnes per unit GDP) is increasing today [7]. This is in part because some of these industries have been sheltered from climate policies and emissions reduction mandates. In part, this is because global consumption has grown. In part, this is because industrial sectors have few technology options and are expensive to mitigate (ETC, 2018), compounded by the fact that the existing capital stock of industrial facilities is generally young, will be long lived, and cannot readily undergo electrification.

The Working Group III report has many findings and recommendations for industrial decarbonization (Figure 2), including reduction of material consumption and improved energy efficiency. However, three options stand out, especially in the context of the existing capital stocks:

• Clean Fuels: Since steel, methanol, and cement plants cannot readily be electrified with green electricity, they must operate with clean fuels. This is particularly important in providing high-quality, high-temperature heat on demand. The authors elevate two clean fuels as critical pathways for the next two decades: sustainable biomass, including biogas and waste biomass gasification and pyrolysis, and clean synthetic fuels, including low-carbon hydrogen [8] and synthetic fuels derived from low-carbon hydrogen [9]. These fuels can substitute for fossil fuels in short order and substantially reduce emissions locally.
  
  

• Carbon Capture: For many existing plants, which present a major risk of emissions lock-in, the lowest cost and fastest path will be CCS retrofits (IPCC WGIII Technical Summary). This is particularly important for those industrial production systems that generate byproduct CO2 from the chemistry of manufacturing, such as cement kilns and primary iron and steel from blast furnaces, which cannot be abated by any other means. CCS provides the largest potential for abatement, and in many cases at the lowest cost (Figure 2).

Circularity: The report authors identify circular industrial ecosystems as a means to reduce material intensity. They also recognize, for the first time, the substantial potential for CO2 recycling as a circular feedstock for chemicals, fuels, and building materials. While these approaches face many challenges, including cost and infrastructure, their potential abatement is many gigatons at minimal to zero costs today (Bhardwaj et al., 2021).

Figure 2: Decarbonization contribution to three key industrial sectors. Source: WGIII AR6 Technical Summary, figure TS-17.

The specific sections on industrial decarbonization, like the rest of the report, balance factual detail, numerical accuracy, and daunting scale with a clear-eyed but realistic assessment of the full range of possibilities and opportunities to a conclusion that net zero CO2 industrial sector emissions are possible (but challenging). Even for industrial production that is expensive to decarbonize with high business-to-business production costs increases, the final additional costs to consumers and finished goods are relatively small – often just 0.5-3% total product cost increases.

Beyond the IPCC Report: Scaling Carbon Removal for Climate Change Mitigation

Successful mitigation strategies will require coordinated planning across all levels of governance, and need to consider the interrelated nature of economic, socio-cultural, and environmental systems to best speed the transition to a low-carbon economy. Some progress demonstrates that possibility – the WGIII report finds that 24 nations have reduced their emissions for the past 10 years.

Much more is required. Some of this is about planning; specifically, the authors state success “requires purposeful and increasingly coordinated planning and decisions at many scales of governance” (IPCC WGIII Technical Summary). This is another way of stating that governments and industry must be both mindful and timely in their response. They must also be broad and inclusive: “pathways relying on a broad portfolio of mitigation strategies are more robust and resilient,” essential to a successful, sustained campaign of action (IPCC WGIII Technical Summary).

One clear example from the IPCC of needed investments is for infrastructure. The new report speaks of infrastructure 64 times, including the need for new electricity transmission (electrification, green hydrogen, pipeline infrastructure (CO2 storage, hydrogen), fueling infrastructure (ports, charging stations) and manufacturing capacity. This will require trillions of dollars of investment around the world, rooted in communities and geographies that themselves will require attention and consideration (e.g., around environmental justice). Financing of infrastructure can flow from regulatory policy, direct government investment, business incentives and subsidies, and revenues from border carbon adjustments and carbon pricing systems.

Profound increases in investment must also support innovation. The WGIII report finds that innovations are needed to deliver deeper abatement, lower costs, increase performance of solutions, and avoid shocks. The authors include investment in innovation by companies and governments to be at least as essential as public engagement and movement building. The range of topics that merit attention is again broad and inclusive, ranging from efficiency gains to electrochemistry of CO2 recycling and including batteries (for vehicles and grid), CO2 removal technology, and synthetic fuels.

It cannot be overstated how hard all of this will be. The Working Group III 6th Assessment Report suffers no illusions in that regard. For example, it explains that despite great progress on some zero-carbon electricity (good), global deployment rates are grossly insufficient (hard). Similarly, despite great increases in civic and public engagement (good), the authors find “there is no conclusive evidence that an increase in engagement results in overall pro-mitigation outcomes” (hard). The combination of clear-eyed, cold arithmetic and enthusiasm for the solutions in hand and over the horizon makes this report bracing reading, similar to its sister reports on the Physical Science and on Impacts, Adaptation and Vulnerability. This presents a clarion call to global society that more action is needed (and fast) to achieve our shared climate goals. Substantial progress is required to dramatically reduce emissions across all economic sectors in the coming decades and simultaneously scale global carbon removal capacity in a rapid manner across multiple approaches. We hope that with these insights from the IPCC, decision makers in government, industry, and civil society use its urgent recommendations to accelerate development and deployment of all reduction and removal mitigation options.

1. To limit global warming to no more than 2°C above pre-industrial levels, with further ambition to limit warming to no more than 1.5°C
   
   

2. The two major drivers of these emissions trends over the last decade are first and foremost increased Gross Domestic Product per capita followed by population growth.
   
   

3. Estimates from the IPCC suggest a cumulative need for carbon removal at a level of 100-1,000 billion metric tonnes of CO2 by the end of this century in order to limit (or avoid) temperature overshoot beyond 1.5°C specified in the Paris Agreement. According to the National Academies of Sciences, Engineering, and Medicine, annual carbon removal rates will need to approach 10 billion metric tonnes of CO2 per year by mid-century and twice that amount by the end of the century to meet global climate goals.
   
   

4. Since the last working group three report in 2014 (AR5), the scientific community has improved its model representation of many CDR approaches, including reforestation, direct air capture, and bio-energy with CCS.
   
   

5. Durability can refer to either the planned duration of carbon storage, often referred to as “permanence”, or the risk of reversal before that time is up.
   
   

6. For example, amendment of the London Convention of the Sea to allow for CDR operations.

7. In short, we’re making more stuff.
   
   

8. This includes electrolysis of water with zero-carbon electricity (green hydrogen), fossil-fuel hydrogen with carbon capture and low fugitive emissions (blue hydrogen), and biomass-derived hydrogen (with or without carbon capture).
   
   

9. This includes ammonia, low-carbon methanol, and synthetic jet fuel.