Closing the Carbon Removal Gap: A Case Study on the Frontier AMC

Abstract

This thesis examines the contributions of the Frontier Advance Market Commitment (AMC) in addressing the market failure for Carbon Dioxide Removal (CDR) technologies. Through thematic analysis of semi-structured interviews, the research explores how the Frontier AMC tackles key issues hindering CDR development. The paper is placed in the theoretical context of market failure and the entrepreneurial state in order to gauge the influence and implications of private actors conducting market shaping, informing the paper’s understanding of the present and future dynamics of the CDR industry. The findings highlight the significance of the AMC's strong market signal. By guaranteeing future demand, it incentivizes long-term investments and fosters innovation amongst CDR technology developers enhancing commercial viability and setting a benchmark for future deals. Additionally, the AMC establishes robust measurement, reporting, and verification (MRV) standards, ensuring the legitimacy and scalability of supported technologies. The AMC's commitment to transparency minimises greenwashing and strengthens market credibility. The $1 billion commitment allows Frontier to support a diverse portfolio of CDR technologies, preventing technological lock-in and market distortion. The research emphasises the interviewees' recognition of the Frontier AMC's transformative role in creating and accelerating the CDR market. However, it also identifies the need for government intervention to achieve large-scale CDR deployment. The study suggests policy instruments like mandatory carbon credit purchases and increased public funding as crucial steps forward. The AMC's data collection and MRV processes can inform standardised regulations, while its impact can justify expanded public investment in CDR. In conclusion, while the Frontier AMC has significantly impacted the CDR market, further development hinges on government intervention. Additionally, the study expands market shaping literature by demonstrating Frontier’s ability to enact multi-level influence. Finally, it suggests avenues for future research, including revisiting the Frontier AMC's future trajectory and exploring AMC applications in other sectors.