Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/306863 
Year of Publication: 
2024
Citation: 
[Journal:] Environmental Sciences Europe [ISSN:] 2190-4715 [Volume:] 36 [Article No.:] 146 [Publisher:] Springer Nature [Place:] Berlin [Year:] 2024 [Pages:] 1-19
Publisher: 
Springer Nature, Berlin
Abstract: 
Bioenergy with carbon capture and storage (BECCS) is considered as a future key technology to provide baseload electricity, heat, pulp, paper, and biofuels, while also enabling atmospheric carbon dioxide removal (CDR). Sweden seeks to lead the way in bringing this technology up to scale, introducing a EUR 3.6 billion reverse auction scheme to facilitate market entry of companies producing BECCS. We explore instrument design preferences among politicians, regulators, and prospective BECCS operators to identify trade-offs and explore feasible policy design. Based on 35 interviews with experts in the latent BECCS sector in Sweden, we identify under which circumstances prospective operators would be willing to place bids and discuss how actor preferences both align with and challenge auction theory. The analysis concludes that at least four dilemmas need attention. These concerns how to: (1) balance the state’s demand for BECCS to be implemented already in 2030 against the prospective BECCS operators’ fear of the winner’s curse, i.e., a fear of bidding for a contract that turns out to be too costly to implement; (2) allocate contracts at the margin of the auctioneer’s demand for BECCS without driving up costs; (3) design compliance mechanism to achieve effectiveness without undermining efficiency, and; 4) integrate the auction with the voluntary carbon market—if at all—in a manner that safeguards the environmental integrity of the auctions.
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Creative Commons License: 
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Document Type: 
Article
Document Version: 
Published Version

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