Abatement Measures and MACC: How to Build a Cost Curve

A company usually has dozens of possible abatement measures: efficiency projects, rooftop solar, electrification, fuel switching, supplier programmes. There is neither the budget nor the team to do them all at once. The marginal abatement cost curve (MACC) is the most common way to compare these measures in a common language: how much abatement does each measure deliver, and how much does each tonne abated cost? This guide explains the logic of the MACC, the steps to build one and its limits. For the roadmap as a whole, see the decarbonization roadmap guide.

What is a MACC?

In the definition given in the Clean Air Task Force's June 2026 explainer, a MACC is a chart that shows each abatement option as a block; the block combines the option's abatement potential with its cost per unit of emissions abated. The options are ordered from cheapest to most expensive.

• Horizontal axis: Cumulative abatement potential (tCO₂e/year). The width of each block is that measure's annual abatement.
• Vertical axis: Cost per tonne abated. This is the height of the block.
• Blocks below the zero line: Measures that deliver net savings over their lifetime, in other words negative-cost measures.
• Blocks above the zero line: Measures that require additional funding.

When the curve is used inside a company, a further horizontal line is drawn across it: the company's carbon price assumption or internal carbon price. Measures below this line are those that look economic when assessed at the company's own carbon price.

Building a MACC step by step

1. Set the reference emissions and target year

A MACC is built for a target year: "In 2030, what will our emissions be if no measures are taken, and how much will each measure reduce them?" The reference scenario should include production growth and planned investments. This step cannot be done unless the inventory is broken down by source; see the GHG inventory guide.

2. Draw up a long list of measures

Starting from the hotspot analysis, list the technically feasible measures for each source through site visits and energy audits. The headings the Long-Term Climate Strategy lists for the manufacturing industry (energy efficiency, renewable energy use, reducing product-level carbon footprints, hydrogen, carbon capture) make a good checklist.

3. Calculate the abatement potential of each measure

The basic formula in the CATF explainer:

Abatement potential (tCO₂e/year) = Reference emissions (tCO₂e/year) × Share that can be abated by the measure (%)

This calculation answers the following questions: To what extent is the measure already applied in the reference scenario? What will emissions be once the measure is applied? Taking technical feasibility and the existing installed base into account, how much can be abated?

4. Calculate the cost of each measure

The approach in the CATF explainer is to divide the measure's net present value by its total abatement potential:

Marginal abatement cost = Net present cost of the measure / Total abatement over the measure's lifetime (tCO₂e)

The net present cost includes: additional capital and operating expenditure relative to the reference scenario, the revenue or energy savings created by the measure, the measure's lifetime and the discount rate. The same result can be reached on an annual basis:

Cost per tonne = (Annualized investment + Annual change in operating cost - Annual energy savings) / Annual abatement (tCO₂e)

Here, annualized investment is the investment amount converted into equal annual instalments using the measure's lifetime and the discount rate.

5. Correct for interactions

This is the first limitation the CATF explainer warns about: a MACC shows each measure's potential independently, but in reality one measure's potential is affected by the implementation of another, and the combined effect is not the sum of the individual potentials. The practical solution is to calculate potentials sequentially, in order of implementation: efficiency first, then electrification on the remaining consumption, then renewable procurement on the remaining electricity.

6. Rank, plot and compare with the target

Rank the blocks by cost and plot them. Mark the abatement required by the target on the horizontal axis. The cost of the last measure needed to reach that point is the marginal cost of the target.

Example: a textile dyehouse

The plant and all values below are illustrative; they do not represent a real company. Costs are shown as a relative cost index rather than in a currency: 0 means no net cost, negative values mean net lifetime savings, and 100 means a cost per tonne equal to the company's internal carbon price.

Sample plant: 2030 reference emissions of 40,000 tCO₂e/year. Most emissions come from natural gas in the steam boilers (scope 1) and purchased electricity (scope 2). Potentials have been calculated sequentially in the order shown in the table.

How to read the sample curve

• The first four measures (6,000 tCO₂e/year) have negative cost. If they have not yet been done, the cause is usually not budget but prioritization and ownership. They belong in the first year of the roadmap.
• The physical measures below index 100 (the first six measures) deliver a total of 13,000 tCO₂e/year. Assessed at the company's internal carbon price, they look economic.
• The electric steam boiler, at index 140, sits above the internal carbon price, but on its own it delivers the largest physical reduction. If the target requires, say, 18,000 tCO₂e/year of abatement by 2030, it cannot be met without this measure. In that case the decision should not be "it's expensive, let's not do it" but a reassessment with incentives, financing, equipment replacement timing and carbon price assumptions.
• Why is the YEK-G line separate? Under the GHG Protocol Scope 2 Guidance, contractual instruments affect market-based scope 2, while the location-based result continues to be calculated from the grid average. The SBTi Net-Zero Standard V2.0 sets target ambition against the physical inventory, including the location-based method for scope 2. Adding certificate purchases to the same cumulative total as physical reductions therefore shows decision makers a picture that is closer to the target than it really is. Also look at the sequence: as solar and efficiency measures reduce purchased electricity, the need for certificates shrinks too.

The example also shows why interactions matter. The potential of the electric steam boiler was calculated on the steam demand remaining after condensate return and heat recovery. Had the order been reversed, the potential of the efficiency measures would have shrunk and the boiler's would have looked larger; calculating the two potentials independently and adding them up would count the same tonnes twice.

Limitations of the MACC

The CATF explainer lists the following limitations to keep in mind when interpreting a MACC; we have added our own field observations:

• Interactions: If potentials are calculated independently, total abatement is misestimated.
• Co-benefits and wider costs are left out: Effects such as transaction costs, behavioural factors, occupational health, product quality and customer requirements do not appear on the curve.
• Static view: It does not reflect technology costs falling over time or changes in market conditions; it is a snapshot of a single year.
• The investment burden is invisible: Cost per tonne includes both capital and operating costs; looking at the curve, you cannot tell which measure requires a large upfront investment. Yet this is decisive for financing and prioritization.
• Sensitivity to assumptions: The discount rate, energy prices and emission factors change the result significantly. Sensitivity analysis should be run with natural gas and electricity price scenarios.
• Time and lock-in: The curve does not show measures that need long preparation, or the risk that a cheap short-term solution locks in high-emission equipment for many years.

CATF's conclusion is also our recommendation: a MACC is a decision support tool that shows options in a simplified, comparative way under specific assumptions; it does not make the decision on its own and should be used together with other quantitative and qualitative analyses.

Prioritization: beyond cost

When ranking measures in a roadmap, we add the following criteria to the MACC:

The SBTi V2.0 implementation hierarchy directly affects this table: companies cannot rely on activity pool or sector-level actions without showing that activity-level actions have been assessed and implemented where feasible. In practice, this means efficiency, electrification and self-consumption projects at your own sites should be assessed before market instruments.

From MACC to investment decision

A well-built MACC, used together with an internal carbon price, gives the investment committee a clear language: "Assessed at our internal carbon price, this project generates a positive net present value" or "This project is essential for the target but costs more than our internal carbon price; here are the financing and incentive options." For how to set an internal carbon price and link it to investment appraisal, see our internal carbon pricing service.

At Alalëa we build the MACC site by site, together with engineering and finance teams; we calculate potentials sequentially, show physical reductions and market instruments separately, and turn the result into an implementation timeline consistent with SBTi targets. For details, see our decarbonization strategy service.