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The encryption key could be a function of his login password and it could be stored in-memory after he is logged in. The issue is to have a trigger which wipes it from memory by logging out the current user when the police shows up, and unplugging the SD is a nice trigger for that.

That's at least what I imagined, his setup might be completely different (a keyboard combination for logging out might also work better).

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Basically the SD card contains encrypted key which is required to be mounted while logged into the PC. If I pull the card away the PC will automatically shutdown.

if the SD card is not mounted when the user logs in the system is automatically shutdown too.

Basically the SD card only fights against using the computer. You of course could remove the hard drive and mount it in another computer, but that is why the whole drive is encrypted.

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