How to survive CDR's "Death Valley"

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On 17th June Frontier, the advanced market commitment (AMC) designed to accelerate CDR technological development, announced that it was pledging an additional $915 million (€800 million) to a 10-15 CDR projects nearing commercialisation.

The funding represents a doubling in Frontier's overall CDR allocation to $1.8 million. Tech companies such as Stripe, Google and Shopify dominate the list of Frontier members, with AI firm Anthropic the most recent company to join the group (see CDR "moonshot" aborted, for now: Reboot needed as Microsoft allegedly suspends carbon removal purchases).

At the core of this additional commitment is Frontier's acknowledgment that in order to get "to gigaton-scale, companies and governments will need to work in concert." Governments are only likely to want to include CDR within their climate policy regulations once they are reasonably certain that they have been de-risked (scale, cost, deployed responsibly, etc).

That means focusing on those CDR companies where Frontier has a "high conviction the technology has gigaton-scale potential," while also favouring jurisdictions where "meaningful carbon removal policy has passed or is likely to."

Frontier is focused on five key CDR technological bets. Of those biomass carbon removal and storage (BiCRS) and direct air capture (DAC) are the most mature. At the other end of the scale, surficial mineralisation, ocean alkalinity enhancement (OAE), and enhanced rock weathering (ERW) are the least mature.

Each individual CDR technology has factors that could prompt concern among policymakers: insufficient or uncertain scalability, cost likely to remain prohibitive, nascent technology with high risks. To some extent these factors are inherent to the underlying CDR technology.

Frontier will no doubt hope that some of its CDR bets will take on a virtuous circle: increased scale leads to lower costs, this results in a further scale-up in capacity, with every stage ironing out the remaining technological risks. To do that companies need to learn fast, from their own actions, and those of their competitors.

One way to assess whether that is possible is to determine the learning rate. This is the degree to which costs decline through efficiencies as cumulative production volumes double. It was first described by Theodore Wright in 1939 who observed a 20% decline in manufacturing labour hours for each cumulative doubling in airplane manufacturing output.

Different technologies tend to follow different cost learning curves that determine a potential cost floor. Frontier must reason that the greater the number of shots on goal it makes, the greater the likelihood that at least one CDR technology solution will have a sufficiently high learning rate.