Aviso et al. (2025): Bilevel Programming for Optimizing Carbon Dioxide Removal Portfolios
Kathleen B. Aviso, Maria Victoria Migo-Sumagang and Raymond R. Tan, IN: Chemical Engineering Transactions, https://doi.org/10.3303/CET25120025
Purchase of carbon dioxide removal (CDR) credits is an important decarbonation option for many firms seeking to reach net zero emissions. These credits can supplement other decarbonization measures by offsetting hard-to-abate emissions. However, carbon markets are currently dominated by low-quality CDR credits generated by techniques with low durability or sequestration permanence. Companies tend to favor these credits due to their low cost compared to more durable CDR produced using novel technologies such as direct air capture (DAC). As a result, CDR portfolios tend to consist of credits with dubious climate change mitigation value. In this work, the authors develop a bi-level mathematical program to model how government can use economic incentives to induce industry to select portfolios that favor durable CDR.