Proposes to pay the industry to remove CO₂
The Norwegian Environment Agency has published a note on the potential, costs and possible measures for industrial carbon removal. One instrument that can trigger industrial carbon removal is that industry can be paid to remove CO2 from ambient air.
In the note, the term industrial carbon removal has been used to refer to the capture of CO2 from ambient air (Direct Air Carbon Capture and Storage, DACCS) and the capture of biogenic emissions (bio-CCS or BECCS), where the CO2 is stored permanently in geological reservoirs.
Have looked at different support models
The Norwegian Environment Agency writes that they have looked at various models for support for carbon removal. “Reverse tax” (as introduced in the USA, Denmark and Sweden) appears to be the most relevant. It is also written that the instrument should be designed so that the costs for society do not become higher than necessary.
Proposal to mirror the CO2 tax
It is pointed out in the memo that the potential projects for bio-CCS and DACSS that the Norwegian Environment Agency has mapped are very different. This applies both in terms of technology maturity, size and costs. Many of the emission sources are relatively small, and high administrative costs will be a barrier. This, as well as the need for emission reductions before 2030, suggests that a “reverse” tax will probably be a suitable instrument. The state can, for example, mirror the CO2 tax with a reverse tax of NOK 2,000 per tonne (2,020 kroner) which the players are paid for each tonne removed over a period of 10 years. If you want to give stronger incentives to DAC projects, you can have a higher level for DAC.
This is an extract from the note “Industrial carbon removal – potential, costs and possible measures” which The Norwegian Environment Agency published 13.03.23. Read the whole note here (in Norwegian).