Edward Morello is the Liberal Democrat MP for West Dorset.
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The hon. Gentleman is being extremely generous with his time. The Brit Valley Project in West Dorset is bringing together 43 landowners and will improve biodiversity over 4,000 acres. Every time I speak to community groups—I am sure other Members have examples of this—they want to see faster action. Does he share my frustration that politicians nationally and internationally are using the climate crisis and ignoring the science for their own political ends?
Full debate: Global Biodiversity and Ecosystems: National Security
I am extremely grateful for the opportunity to bring this Adjournment debate to the House and to make the case for greater Government support for the greenhouse gas removals sector. First, I thank the sector for engaging so openly with me about its businesses and concerns, the Minister for his continued co-operation on this issue and Dr Alan Whitehead for publishing his extremely important review.
Before entering this place, I spent almost a decade working in renewable energy, and before that on climate impact projects. I would certainly not claim to be an expert on greenhouse gas removals, but, through my work in the renewable energy sector, and now as chair of the all-party parliamentary group on climate technology and the co-chair of the net zero APPG, I have at least become a passionate advocate for the sector.
Climate change is here. It is happening now. We see it through rising temperatures and increasingly frequent heatwaves, flooding, drought and wildfires. The changing climate is already affecting our communities, businesses and public services. Much of the conversation has rightly focused on reducing our emissions, and let me be clear: decarbonisation must remain our first priority. Every tonne of carbon dioxide we avoid emitting now is better than having to remove it later. However, even if we achieve every single one of our net zero targets—and we absolutely must—we will still have a problem.
Net zero does not remove the carbon dioxide that is already sitting in our atmosphere, which is why this debate is not about carbon capture and storage, but about carbon removal. The Intergovernmental Panel on Climate Change has been absolutely clear that without greenhouse gas removals, keeping global warming within internationally agreed limits becomes effectively impossible.
Today, humanity removes only about 2 billion tonnes annually, 99.9% of which is done by trees and plants. Meanwhile, we continue adding more greenhouse gases to the atmosphere every single year. The scale of the challenge is enormous. Whenever I speak about this issue, someone invariably asks, “Why do we not just plant more trees?” I agree: trees are wonderful, and we should absolutely plant more of them. However, to keep global temperature increases below the 1.5% or 2% target, we would need to remove 10 billion tonnes of carbon dioxide from the atmosphere every single year, which would require us to plant roughly 50 million hectares of new forest annually. That is equivalent to covering the entirety of the UK with trees, twice, every single year. Even the most committed of environmentalists would accept that that approach has practical limitations.
Full debate: Greenhouse Gas Removals Sector
My hon. Friend and neighbour is absolutely right. There are many exciting nature-based solutions for which I have high hopes. In my role as chair of the all-party parliamentary group on climate technology, my focus today is mainly on the engineered solutions, but we need to consider all solutions to meet the challenge ahead.
Full debate: Greenhouse Gas Removals Sector
Technology such as direct air capture and engineered removal methods will become an essential part of moving beyond net zero towards net negative emissions. Those technologies are nascent. The businesses that will develop them need to be founded today and to scale over the next decade. They need investment, certainty and confidence if they are to become globally competitive and properly supported.
The UK’s GGR sector already contributes about £1.2 billion to the UK economy. It has the potential to contribute between £7 billion and £9 billion to GDP by 2050 while supporting more than 100,000 skilled jobs. The countries that build those technologies first will not simply reduce emissions at home; they will be central to global emission reductions for decades to come. Britain should aspire to become the global centre of carbon removal innovation, the home of future climate tech unicorns and a leading exporter of GGR technologies.
Full debate: Greenhouse Gas Removals Sector
UK start-ups struggle to access patient capital at precisely the moment they need it most. Of all climate tech early start-ups that failed, 62% fail at series A, the start of the so-called valley of death. Britain has repeatedly invented world-leading technologies only to watch other countries commercialise them. We cannot allow that to happen again.
That brings me to what I believe is the single most important proposal that the Government should consider. The answer lies in creating a British carbon bank, a Government-seeded revolving fund that will crowd in private finance. A British carbon bank would provide long-term advanced market commitments for verified GGRs. That would de-risk the purchase for the offtaker as the credits are certified, provide the capital that the GGR project needs to start capturing greenhouse gases and generating carbon credit, and improve investor confidence because there is a guaranteed purchaser. Rather than the Government attempting to fund every project themselves, a British carbon bank would create guaranteed demand for high-quality removals over many years, allowing businesses to secure investment and scale their technologies with confidence.
One particularly interesting example is Terraset, a US charity. Rather than relying solely on traditional grant funding, Terraset uses philanthropic finance to early pre-purchase commitments to vetted projects, giving those projects the capital to actually remove greenhouse gases. Those advanced commitments provide early demand, giving companies confidence to develop technologies while demonstrating to investors that a future market exists. These projects deliver verified carbon credits to Terraset, which it then sells to buyers. Any revenue generated is then returned to the fund and gets deployed into new projects. For every $1 it deploys, it unlocks $5 in private finance and achieves a 15% mark-up for credits under this de-risk model. As a result of this profit margin, it is now attracting interest from institutional investors, including pension funds.
A British carbon bank would take that principle and apply it at a national scale. It would provide a clear signal that Britain intends to become the best place in the world to develop, deploy and commercialise greenhouse gas removal. One strength of a British carbon bank model is that it addresses the greatest barrier currently facing the sector: risk. The bank would purchase future carbon removals in advance, holding those credits until they have been independently verified and certified. There is, of course, a risk for the Government that some projects may ultimately fail to deliver the promised removals or not achieve certification. However, that risk can be significantly reduced through robust due diligence and careful product selection, as organisations such as Terraset have already demonstrated successfully.
I believe that a British carbon bank could replicate this revolving model at scale, helping promising British companies bridge the gap between innovation and commercial success. Net zero is today’s problem, and net negative is tomorrow’s, but if we do not start thinking about it now, we will not be ready to meet that challenge. We should be ambitious. We should not settle for participating in the market—we should aim to lead it.
Will the Minister confirm precisely when the Government intend to publish their full response to the Whitehead review, and whether that will be before the House rises for the summer recess? Will he confirm whether the Government are giving serious consideration to the proposal for a British carbon bank or revolving fund to provide the long-term market certainty the sector has consistently called for? If the Government are not yet in a position to introduce longer-term reforms, what interim measures will they take to ensure that promising new UK GGR businesses are supported and not lost overseas while policies are being developed? Finally, will the Minister commit to continuing to work closely with the sector over the coming months, listening to businesses, investors and researchers, so that the UK can seize the opportunity to become a global leader in greenhouse gas removals rather than watching others move ahead?
Full debate: Greenhouse Gas Removals Sector