PUBLIC PROCUREMENT OF CDR

A public body buys verified carbon dioxide removal from selected suppliers and owns or retires the resulting units. Contracts may pay after delivery or commit to future tonnes, giving projects revenue while creating direct public demand. Unlike a carbon contract for difference, the buyer pays the full price and receives the unit. Unlike an advance market commitment, procurement makes an actual award rather than only promising future demand. Unlike an offtake guarantee, the public body is the buyer, not a backstop.

Public procurement design begins with establishing intent and answering whether the public buyer is neutralising its own residual emissions, helping meet a national target, or developing an early market? Answers to these questions can help inform considerations around eligible removal methods, quantities, delivery years and contract length. Every purchased tonne should represent net atmospheric removal after lifecycle emissions, with clear storage duration, independent verification, reversal responsibility and public registry records. Tender rules should balance price, quality and a diverse supplier base. Contracts must state when payment occurs, what happens after non-delivery, who owns and retires the unit, and how domestic and foreign removals avoid double claiming.

Public procurement can give early CDR suppliers a credible buyer when private demand is too small or uncertain. Forward contracts can help projects attract investment, while delivered purchases provide operating revenue. Competitive rounds can help uncover market prices and delivery capability across removal methods, helping later buyers write better contracts and quality rules. A transparent portfolio can also widen the supplier base and demonstrate how public institutions reduce their own emissions first, purchase removals for the remainder and retire each unit without duplicate claims.

Short contracts or payment only after delivery may not finance new facilities. Weak competition can overpay favoured methods, while complex tenders can exclude small suppliers. Without contractual safeguards, non-delivery, reversal or duplicate claims can waste public funds. Using purchases against avoidable public emissions can also weaken incentives to reduce them first.

The purchasing body should publish bids, awards, prices, contracted and delivered tonnes, payments, retirements, suppliers, methods, delays, verification failures and reversals. These results show whether spending is creating additional removals and a broader supplier base. Low competition should change lot sizes or price caps. Non-delivery or integrity failures should tighten eligibility, verification and contract remedies.

Public buyers should ask CDR suppliers what volumes, delivery dates and prices are realistic before tendering. Procurement and finance bodies should shape budgets and drive competitive biddings. Standards bodies, registries and verifiers help define and ensure evidence.

National governments are best placed for significant purchases, holding the budgets and the climate mandates the contracts draw on. The supranational actors can coordinate or fund joint procurement, pooling demand the way the EU already aggregates vaccine and gas purchasing. Municipal buyers can run smaller programmes for their own emissions, and city purchases have supplied some of the market’s earliest public demand.