The UK government has released its Greenhouse Gas Removals (GGR) Business Model, a long-anticipated framework aimed at scaling up carbon removal technologies and supporting the country’s net-zero strategy. Published in August, the plan sets out contract terms, incentives, and funding mechanisms to attract investment and bring early-stage projects—such as those in the HyNet Track-1 expansion—closer to commercial deployment.
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Drax Power Station in North Yorkshire, a flagship UK site for bioenergy with carbon capture and storage (BECCS). AI generated picture.
At the heart of the model is a 15-year Contract for Difference (CfD). The mechanism guarantees revenue for developers by covering the gap between a negotiated strike price and the market price of carbon credits. If the market price exceeds the strike price, developers must return the difference to the government, creating a two-way payment system.
The framework also introduces a capital grant of up to 50% of eligible construction costs, addressing one of the biggest barriers to scaling: high upfront expenses. A Price Discovery Incentive provides a 5% sales bonus on credits to encourage market competitiveness, while transport and storage costs for captured CO₂ will be reimbursed through pass-through payments.
Although designed to be technology-neutral, the scheme currently applies only to Bioenergy with Carbon Capture and Storage (BECCS) and Direct Air Carbon Capture and Storage (DACCS). Interim quality thresholds will be based on methodologies developed by the British Standards Institution until a full UK GGR Standard is finalised.
Industry observers suggest the framework signals a turning point for the sector, marking the UK’s commitment to long-term carbon removal. However, analysts caution that the CfD’s complexity could present hurdles for smaller developers. Comparisons with the EU’s certification-led approach highlight potential competitive differences.
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Carbon removals are expected to contribute a modest share to the UK’s 2050 net-zero pathway, but they are viewed as critical for reducing atmospheric CO₂ in the long term. Policymakers and industry leaders have called the release a ‘critical milestone’, underscoring years of collaboration between government, investors, and technical experts.
Integration with the UK Emissions Trading Scheme (ETS) is also on the horizon. The ETS Authority confirmed plans to include technological carbon removals by 2028, with full operational integration targeted for 2029. Importantly, the gross cap on allowances will remain unchanged, ensuring removals support decarbonisation without weakening emissions limits. The Authority is also weighing the introduction of distinct removal units, pending further technical assessment.
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The UK’s commitment to scaling carbon removals through long-term contracts highlights a broader global shift towards binding mechanisms that prioritise accountability and permanence. As frameworks like these expand, the demand for high-quality, verifiable carbon credits will only grow. DGB Group stands at the intersection of nature and investment—developing large-scale restoration projects that generate trusted carbon units, revive ecosystems, and strengthen local communities. As momentum builds worldwide, the value of credible nature-based solutions will only increase. Now is the time to align your business with this future—and grow with us.
