The federal government is a powerful engine when it comes to moving markets. Through regulation, policy, and, as we’ll discuss here, direct purchasing, government action could provide clarity and stability for the entire carbon removal market. That would have a range of knock-on benefits. By signaling demand for innovative approaches and products, federal procurement could encourage others to seek out and embrace new and potentially breakthrough options. In the process, it would also set standards for carbon removal that could put the field on a more equitable and effective path for decades to come.
The federal government should be carbon removal’s biggest buyer
Carbon removal doesn’t readily create a physical product or commercial service — at Carbon180, we see CDR as a public good. Verifiably and permanently removing it at scale, while important for the environment and society, doesn’t present an immediate revenue opportunity for most buyers. But the federal government has deep pockets; it can afford to see big, meaningful projects through for the public’s benefit.
Making that investment in carbon removal would not only help the country achieve our climate goals, but it would support American manufacturers and domestic jobs. With that in mind, we think carbon removal is something that the government should purchase as a public service, not unlike waste removal.
To do this well, federal procurement policies should emphasize three key objectives:
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Establish standards for measuring, reporting, and verifying carbon removal
The federal government can play a unique role in defining what high-quality carbon removal looks like and create a market that demands it. The public health sector gives us a good model for what this could look like: the government communicates standards for vaccines and promises to purchase the resulting product; this gives private companies an incentive to innovate and deliver vaccines that meet those standards, knowing they’ll have a guaranteed purchaser.
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Prioritize projects that center environmental justice, equity, and workforce development
Procurement policies should be designed in a way that fully recognizes local, social, and non-CO₂ pollution impacts. They should actively and deeply engage with communities, helping them assess risk when it comes to air and water quality, as well as traffic and land use. Going one step further, good policy will minimize or redirect these risks for local communities while bringing them benefits like job training and unionized employment.
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Use complementary policy tools to support climate-smart practices
Alongside research and development and other investments, well-designed procurement policies can help bring forward new and promising carbon removal pathways. We’re particularly interested in pay-for-practice set asides, which may not be initially eligible for a public procurement market, but will be worth reevaluating and accelerating down the road.
Learning from Buy Clean
We’ve seen this model work before where effective procurement policy has created demand for new innovation that meets high standards. Take Buy Clean, a Biden administration program that requires federal agencies to purchase concrete, steel, and other industrial materials that meet carbon emission and labor standards when awarding contracts for public works projects.
For US industrial manufacturers interested in government-funded construction contracts, Buy Clean has the potential to create a major market into which they can sell low-carbon materials if they invest in decarbonization technology today. That market increases the overall supply of low-carbon materials while driving down the price across the public and private sectors.
Buy Clean is an example of procurement policy that simultaneously encourages uptake of existing climate technologies and speeds deployment of new ones. It’s proof that these policies can mobilize the market to embrace new and potentially breakthrough options by signaling early demand.
I’m focused on policy as a tool to build the market infrastructure to scale this nascent industry, the social infrastructure to integrate community needs and benefits into projects, and the coalition infrastructure to set and advance policy priorities.
Sasha StashwickDirector of Policy
Well-designed procurement is part of a suite of policy solutions
Procurement policies are most powerful when coupled with other types of research, development, demonstration, and deployment incentives and investments. Tax credits for carbon removal, for example, are even more valuable with a long-term public market for durable carbon removal; likewise, projects funded through the Regional Direct Air Capture (DAC) Hubs program would benefit immensely from federal procurement.
We’re already seeing exciting momentum building in this respect, largely driven by an influx of federal support from the Department of Energy. In late 2023, they made their first, $1.2 billion dollar round of awards for the Regional DAC Hubs program, issued a Notice of Intent to fund a range of carbon removal approaches (including the launch of the first-ever government carbon removal purchasing program), and started pushing developers to embed community engagement and accountability in their projects. Taken together, it’s clear that the government’s role in carbon removal is at an inflection point.
We think that what happens next could be transformational. We’re optimistic that, if designed right, these policies can both set high standards for carbon removal and help move the supply of carbon removal to meet these standards, now and well into the future.
