433. Other nations are already making moves that provide more favourable conditions for GGR investment than the UK. The US, for example, recently updated their 45Q tax credit scheme to include direct air carbon projects which will pay $130/tCO2 for usage and $180/tCO2 for DACCS. Stakeholders at the evidence roundtable advised that without an equally clear market signal for UK businesses, investors and consumers, the UK may struggle to retain a leading role in GGRs in the face of international competition.
434. Moreover, the UK has little in the way of a negative emissions market or predictable revenue stream, and engineered GGRs are not recognised within the UK Emissions Trading Systems (ETS). Engineered GGRs are only accounted for through voluntary carbon markets (VCMs), which can be difficult to navigate given the lack of standardised verification and methodologies. This means developers often face significant and confusing barriers. The integration of GGRs within Carbon Markets is discussed further in Pillar 6.
435. Engineered GGRs are still in development. It is worth noting that, as with any technology in early-stage development, there are elements of engineered GGR efficiency that can be improved upon. BEIS is undertaking work with a range of stakeholders to understand and address these areas. This includes analyses to validate net-negativity of power BECCS and the sustainability of biomass fuel, and the commissioning of external research to build evidence around Direct Air Carbon (DAC) technologies.
436. Additionally, the UK lacks GGR-specific regulations or legislative framework, particularly in relation to Monitoring, Reporting, and Verification (MRV). Instead, current general regulatory regimes are applied which can cause uncertainty in their application or complications from their overlapping. Stakeholders at the roundtable spoke to the importance of robust MRV for successful deployment of engineered GGRs, as well as better facilitating transparency of risk so investors better understand the market.