As pressure mounts for businesses to decarbonize, many more are expected to rely on carbon removals to achieve net-zero goals, particularly in hard-to-abate industries such as data centers, shipping and aviation.&nbsp;In fact, analysis by McKinsey suggests the carbon removals market could grow to $1.2 trillion by 2050, with early adopters such as Microsoft and Airbus having already bought into engineered carbon removal projects such as bioenergy carbon capture and storage (BECCS). For producers of biogenic CO2 (such as biomass and energy-from-waste plant operators who are prepared to install carbon capture), the potential new revenue stream is substantial.&nbsp;It is often mistakenly believed that carbon capture technologies are new or there is little expertise in the field, but there is a vast amount of existing expertise to tap into from a catalogue of previous studies, projects and use cases. For an experienced team, delivering a BECCS project is not any more complicated or higher risk than other infrastructure assets. Indeed, there are already 45 commercial CCS facilities operating globally, and the United Kingdom has over 90 CCS projects in the pipeline.&nbsp;Both CCS and BECCS will play a critical role in tackling climate change, creating jobs and boosting economic growth. This has led the U.K. government to make big commitments. Last October, £21.7 billion ($28.1 billion) in funding over 25 years was committed to make the U.K. an early leader in CCS and hydrogen. In December, this was followed with contracts signed to begin construction of the U.K.’s first CCUS scheme in Teesside, the East Coast Cluster. The U.K.’s second most advanced scheme, of which Evero’s first BECCS plant will connect to—Hynet in Cheshire—is expected to follow in its footsteps in early 2025.&nbsp;As more CCS projects come forward, there will be an important distinction to be made between those that only offset carbon and those that remove it. When applied to a fossil fuel plant, CCS simply stops carbon from being emitted into the atmosphere—in other words, a carbon offset. However, when applied to BECCS, it permanently removes carbon from the atmosphere.&nbsp;Fuel source selection is important. Wherever possible, waste wood should always be reused or recycled to maximize its monetary value and reduce its carbon and ecological footprint before being combusted to generate electricity. For example, with over a million kitchens replaced every year in the U.K., hundreds of thousands of tons of waste wood are created that have no other value or use to society. Previously, this waste wood would have been landfilled, but as the U.K. moves to eliminate almost all biodegradable waste from landfill by 2028, finding sustainable methods of disposal has become increasingly important. This has led to the construction of several waste wood-to-energy plants. As an example, across its portfolio of assets, Evero Energy diverts around 380,000 metric tons of locally sourced waste wood from landfill to generate renewable electricity for over 125,000 homes annually.&nbsp;With stable, high-quality cash flows underpinned by government subsidies, long-term power purchase agreements and fuel contracts, it is an infrastructure asset that performs well. And it also makes these plants ideal candidates for installing carbon capture and storage onto, with the sale of carbon removal credits poised to unlock a substantial new revenue stream. Indeed, the U.K. already has several such sites investigating or in the pre-front end engineering design (FEED) or FEED stages of applying CCS.&nbsp;To fully unlock the potential of BECCS to produce carbon removals, there is a need for greater transparency, regulation and support within the market to attract investors and participants. Addressing this issue was a top priority for last year’s COP29 delegates, who agreed how carbon credits should be created, traded and registered. From this year, businesses will be able to offer carbon credits backed by the credibility of an internationally agreed standard.&nbsp;Separately, the U.K. government intends to offer revenue support to spur investment in technologies such as BECCS and direct air capture by extending the Contract for Difference (CfD) scheme to incorporate greenhouse gas removals. This would create investor certainty using the same pioneering scheme that has successfully brought forward over 9 GW in renewable generation with a further 20 GW under construction or in planning. While the business model is currently in detailed design, the government has already confirmed that CfD contract durations will be for 15-year terms. Taken together, these actions are helping derisk investment in carbon removals so that large-scale projects like BECCS can be constructed to meet demand.&nbsp;The future for biomass is changing at pace, with the pressure for businesses to decarbonize creating new revenue opportunities for those biomass plant operators that are prepared to add carbon capture. Along with growing government support, the case for BECCS has never been stronger. Ensuring transparent and sustainable fuel sourcing will remain central to the industry’s success, with waste wood plants offering a low-risk, environmentally conscious option for the application of CCS.Author: Elliot Renton&nbsp; Chief Financial Officer, Evero Energy&nbsp;&nbsp; Evero.energy

2025-04-07 - From Biomass to Billon Dollar Carbon Removals Market (Biomass Magazine)

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The future for biomass is changing at pace, with the pressure for businesses to decarbonize creating new revenue opportunities for biomass plants to add carbon capture.

From Biomass to Billon Dollar Carbon Removals Market

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