An analysis by the carbon removal market platform CDR.fyi shows that only 0.5% or 32 companies with Science-based targets have bought durable carbon removal. A separate report by the BCG showed that demand for carbon removal credits must reach 40 to 200 million tonnes of CO2 a year in 2030, or $10 to $40 billion, to meet climate goals.  

CDR.fyi is the largest open data platform dedicated to tracking high-permanence carbon dioxide removal (CDR). Their goal is to provide accurate data on CDR to help guide investment decisions and scale up the industry. 

The Need to Scale Up

Carbon removal is an emerging industry but is an important component of the fight against climate change.

Businesses need some amount of carbon removals to achieve their net zero goals. Yet, only a number of large companies are onboard the CDR sector and charging to help it scale. Out of almost 6,000 companies with Science-based targets, only 32 of them have bought CDR credits. 

Last year, only over 45,000 tonnes of permanent carbon removal credits were delivered, according to the CDR platform. So, to bring it to the level required by 2030, at 40 million tonnes, that figure has to increase by around 1000x.

RELATED: CDR Purchases Jump 437% in H1 2023

The growth seems to be lofty to achieve but it’s possible because several companies have existing plans to develop and build facilities that can remove carbon in megatonne level.

Today’s CDR purchases of future tonnes are much higher than deliveries. And these are mostly offtake deals where carbon credit delivery will be for several years. To achieve the 2030 target, CDR credits have to be ordered by 2026 at the latest. 

Forecasting the long-term requirement for carbon removals is not easy but the lowest estimates suggest it would be in billions of tonnes by 2050.

In a separate analysis by BCG, the CDR market will continue to be dominated by voluntary demand from large corporations. 

They estimated that demand for durable CDR is projected at 40 – 200 Mt CO2/yr worth $10 billion to $40 billion in 2030, increasing significantly to 80 – 870 Mt CO2/yr or $20 billion to $135 billion in 2040. But that’s the low scenario projection. 

The high scenario, as seen in the chart below, calls for a demand of 200 – 870 MtCO2/yr in 2030 to 2040. That is equivalent to $40 billion – $135 billion market value.

It is, therefore, apparent that there’s a high need to scale up the CDR industry to meet those projections. The BCG analysis also indicates that while voluntary demand will take up the CDR market, compliance demand will also grow. It will reach around 15% in 2040. 

The Pivotal Role of CDR Buyers 

To achieve the 40 million tonnes of carbon removal capacity by 2030, investment in CDR should be over $100 billion. 

However, according to CDR.fyi data, only around 4.8 Mt of CO2 have been purchased to date. But if the growth in CDR purchases this year (10x) and beyond is maintained, it would be possible to reach the 40 Mt capacity.  

That means the number of large corporate buyers has to increase significantly. From today’s 6 buyers ordering an average of 100k tonnes, it must grow to 4,000 CDR purchasers. 

In this case, buyers of carbon removal credits play a critical role in helping ramp up market growth as well as spur innovation necessary to build a diversified CDR supply chain. 

As per BCG report, there will be more diverse buyers as the price of carbon credit drops. Currently, early buyers with corporate net zero pledges such as Microsoft and J.P. Morgan primarily drives CDR demand.

RELATED: Microsoft’s $200M CDR Deal With Heirloom

But by 2030-2040, the CDR market can expect to see a broader range of industry buyers if average prices decrease. 

The same BCG study revealed that the key driver for most CDR buyers is the quality of the credits. From the current 26% share of durable CDR in carbon credit portfolio mix, it will grow to 35% in 2030 and 48% in 2040. 

Moreover, about 70% of them said that they will increase CDR purchases if there’s guidance from scientific or standard setters.

Recognized bodies such as the Science-based Target Initiative (SBTi) and VCMI can impact purchasing behavior by providing guidance on how carbon removals be included in corporate Net Zero targets. The standards can help facilitate faster project lead times and carbon credit issuance. 

There’s also a need for clean incentives to attract more buyers of carbon removal credits. In particular, 80% of the surveyed CDR buyers said that their spending will increase with government incentives. 

The carbon removal industry is vital for climate goals, but only 0.5% of companies with science-based targets invest in it. Scaling the industry needs more corporate support, government incentives, and guidance from leading organizations.

The post Scaling the Carbon Removal Industry: The Urgent Push for a Greener Future appeared first on Carbon Credits.

German chemical giant BASF announced the launch of the first biomass balanced plastic additives that can reduce a product’s carbon footprint by up to 60%.

Manufacturing the new plastic additives uses renewable feedstocks instead of fossil fuel-based feedstocks. As such, these novel product solutions can help companies’ achieve their sustainability targets such as reducing carbon emissions, BASF said.

BASF is the leading innovative global partner for plastic additives, focusing on aligning with customer sustainability goals through its biomass balance approach. As per ISCC Plus (International Sustainability and Carbon Certification), BASF new additives are certified by TÜV Nord for mass balance.

BASF Biomass Balance Approach

This manufacturing approach is a groundbreaking way of using renewable resources in the chemical industry. BASF uses this approach in its integrated production system and applies it to the majority of its products. 

BASF Biomass Balance Approach

Under this method, renewable raw materials such as bio-naphtha or biomethane from organic wastes, crops, or vegetable oils are used as feedstock at the very beginning of the Production Verbund. 

The BASF Verbund system creates efficient value chains, extending from basic chemicals right through to high-value-added products such as coatings.

The ISCC PLUS certifies this production process. It’s an international certification program that ensures the chain of custody along the value chain from feedstocks to final product.

The renewable resources used are then allocated to the respective sales products using a 3rd-party verified certification method. The chemical expert markets its biomass balanced products under its BMBcert portfolio.

BMBcert additives are a part of BASF’s VALERAS portfolio to create new value for plastics. The first certified biomass balanced plastic additives include the Irganox 1010 BMBcert and Irganox 1076 FD BMBcert.

This first offering will initially be produced at BASF’s site in Kaisten, Switzerland, with further availability in McIntosh, USA in early 2024. 

These innovative product offerings are identical to the conventional grades in terms of performance, quality, and regulatory. Thus, customers don’t have to reformulate their products or requalify the biomass balanced plastic additives.

Saving on Fossil Resources and Carbon Emissions

With their sustainably sourced renewable feedstocks, the products’ cradle-to-gate carbon emission is significantly lowered by up to 60% versus the global average product CO2 footprint of conventional grades.

The certified biomass balanced plastic additives offer customers unique product solutions, along with the following major benefits.

Saves fossil resources: rather than sourcing virgin fossil fuel feedstocks, the additives use renewable resources, thereby saving on fossil resources. The bio-based amount is then allocated to specific products sold by means of the certified method.

Saves carbon emissions: by replacing fossil fuel-based materials with bio-based resources, biomass balanced plastic additives save on carbon footprint. By applying a closed chain of custody, the carbon savings for each product is quantifiable.  

Independent certification: An independent certification validates that BASF plastic additives have replaced fossil feedstock following the REDcert2 requirements.

Identical product performance: the drop-in solution applies for other BASF products, such as dispersions and superabsorbent. These biomass balanced products have identical formulation and quality but can reduce carbon emissions significantly. 

Highlighting these characteristics and benefits of their sustainable plastic additives, Joerg Bentlage at BASF said:

“By leveraging BASF’s highly integrated global production network of interconnected sites and plants, we are able to produce these industry-first, low carbon footprint, drop-in solutions with the same performance characteristics.” 

The certified additives thus contribute to global sustainable development by saving fossil resources, reducing carbon emissions, and promoting the use of renewable resources. 

BASF’s innovative product solution allows partner companies to meet their sustainability goals without trading off performance and quality, signifying a significant step toward sustainability in the chemical industry. 

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BeZero Carbon has given its first Biochar project the rare “A” rating, a distinction held by only 21 of the 350+ projects rated on their platform. This rating is based on a comprehensive analysis of publicly available data and assesses the project against various risk factors, including additionality, carbon accounting, and non-permanence risks.

This pivotal move signifies the maturation of the Carbon Dioxide Removal (CDR) sector and particularly biochar which accounts for over 90% of all CDR deliveries.

The engineered carbon removal sector has been hindered by a lack of transparency and public information and that is set to change.

Puro.Earth expects the supply of CDR in the next 18 months to grow by an “order of magnitude”.
The U.S. Department of Energy has plans to purchase up to $35M of CDR credits from a portfolio of CDR pathways consistent with the objectives of the Carbon Negative Shot.

What is Engineered Carbon Removal?

As the world grapples with the climate crisis, there is a growing consensus that large-scale engineered carbon removal is indispensable.

In fact, projections indicate that by 2030, the annual demand for durable engineered carbon removal could range from 40 to 200 million tCO2. Rating the quality of these carbon credits including biochar will help enhance transparency and integrity in the market.

Currently, here are the top 5 carbon dioxide removal technologies available:

Direct Air Capture (DAC)

Captures CO2 directly from ambient air using chemical processes.
Suitable for long-term storage or utilization in various industries.

Bioenergy with Carbon Capture and Storage (BECCS)

Combines biomass energy production with carbon capture technology.
Captured CO2 is stored underground.

Enhanced Weathering

Spreads crushed minerals on land or in the ocean to react with CO2.
Forms stable carbonates, storing CO2 in a solid form.

Ocean Alkalinity Enhancement

Increases the ocean’s capacity to absorb CO2 by adding alkaline substances.
Also helps to mitigate ocean acidification.

Biochar

Involves the pyrolysis of biomass to create a stable form of carbon.
Can be added to soil to improve its quality and store carbon long-term.

What is Biochar?

Biochar is a form of charcoal produced from the pyrolysis of organic matter, usually plant-based materials like wood, crop residues, or manure. Its molecular structure changes to a more stable form, thus storing carbon much longer than biomass feedstock.

Key Advantages

Stable Carbon Storage: Biochar is highly stable and can remain in the soil for hundreds to thousands of years, effectively sequestering carbon.

Soil Fertility: When added to soil, biochar can improve water retention, nutrient availability, and microbial activity, thereby enhancing agricultural productivity.

Waste Utilization: Biochar can be produced from agricultural and forestry waste, providing a way to utilize these materials while reducing methane emissions from decomposition.

Energy Co-Production: The pyrolysis process also generates heat and syngas, which can be an input for energy.

Earlier this year BeZero Carbon found that biochar encounters fewer obstacles to scaling compared to other methods under consideration. 

Notable advantages for biochar include third-party verified methodologies, cost-effectiveness, well-developed ancillary value chains, and the potential for energy production. 

Biochar: The Market Leader

Biochar is at the forefront of the ex post technological carbon removal market; it is furthest along the Technology Readiness Level (TRL) of all carbon removal methods.

As a product of pyrolysis, a high-temperature, low-oxygen process, biochar has the ability to store carbon for extended periods, far surpassing its original biomass feedstocks. 

The process also generates waste gasses that can be useful as waste heat in district heating networks. Biochar’s versatility extends to its use as a soil amendment, a feed additive, and even as an input in concrete production.

‘A’ Rating: A Benchmark for Excellence

BeZero’s ‘A’ carbon rating is based on the rating analysis of publicly available information. Carbon credits rated ‘A’ have a high likelihood of achieving 1 tonne of avoided or removed CO₂e. This biochar rating assesses the project against BeZero’s risk factors.

Carbon Credit 3rd-Party Verification

In the Voluntary Carbon Market (VCM), third-party verification is a fundamental aspect of the carbon credit process. It serves as the initial step in confirming that a carbon removal activity has occurred. 

There are two ways to perform verification:

Developing an internal methodology that is subsequently verified by an external auditing service
Adopting methodologies established by third-party standards-issuing organizations.

Currently, key third-party methodologies available for Biochar include the European Biochar Certificate, Puro.Earth, and the Verified Carbon Standard.

A lower hydrogen to carbon and lower oxygen to carbon ratio generally means the Biochar is more stable and less likely to break down, making it better for long-term carbon storage. 

As the CDR sector gains momentum, biochar stands out as a key solution for long-term carbon sequestration and soil improvement. BeZero Carbon’s ‘A’ rating for a biochar project underscores the growing importance and effectiveness of engineered carbon removal in addressing climate change.

The post Biochar Makes the Grade: Unlocking The Potential of Engineered Carbon Removals appeared first on Carbon Credits.

A report by Trove Research revealed that there’s a total of $36 billion invested in carbon credit projects from 2012 to 2022, accelerating with more than $18 billion raised in the last 2.5 years. But global efforts are still short of $90 billion to meet the 2030 carbon reduction targets.

Investments in developing carbon credit projects are an important market signal indicating levels of corporate climate action. 

However excessive criticism of quality may deter companies from engaging in their voluntary commitment to support carbon credits. This, in turn, may undermine critical voluntary climate actions from large companies. 

The new commitment will deliver over a thousand new carbon projects, ranging from forest protection to carbon capture and storage solutions. It will also provide a growing supply of carbon credits that companies can use for their net zero strategies. 

Trove Research is a leader in delivering data and intelligence on voluntary carbon market (VCM) and corporate climate pledges.

Carbon Credit Investments Reach $36 Billion

The report also analyzed capital invested in 7,000+ carbon credit projects from 2012 to 2022. Around $36 billion has been invested over this period, with $17 billion in 2021-2023 and $7.5 billion of this investment in 2022 alone.

Capex refers to investment in building carbon credit projects; Feasex refers to feasibility-related expenditure; and Devex represents development-related expenditure.

The increase in investment is especially notable in the years from 2020 to 2022 as seen above. This has been fueled by the ballooning interest in using carbon credits by corporations to reach their climate targets. These corporations include the world’s largest companies.

The researchers also examined announced capital raises associated with the VCM since 2021. Results show that a total of $18 billion has been secured for carbon credit funds just for the last two and a half years. 

The largest raise was in 2021 with $7.8 billion. And around $3 billion has been committed up to 2025. 

Among those raised funding and committed investment, over 80% or $15 billion are for nature-based projects. These include REDD+, nature restoration, and improved forest management. A total of 246 nature-based initiatives cover a total area of 30 million hectares, almost the same size as Italy. 

But notably, there’s a growing share of capital for carbon engineering projects which include Direct Air Capture (DAC) and Bio-energy with CSS (BECCs). 

DAC, in particular, has been getting attention both from the private sector and federal government. Billions of dollars have been invested and promised by the U.S. Department of Energy into DAC and other carbon capture innovations. 

Bridging the $90B Funding Gap 

By region, since 2020 North America maintained the top spot as the largest destination for carbon credit investment, accounting for up to 16%. In comparison, only 1% of global carbon credits funding went to Europe. 

In terms of share, the East Asia and Pacific region got the biggest investment, representing ⅓ or $2.7 billion in 2022. However, the Sub-Saharan African region is keeping pace with its 70% increase in global investment share. 

The analysis also showed that since 2020, over 1,500 new carbon credit projects have been developed and registered with the 5 leading carbon registries. It represents a 160% increase in registration rate compared to the 2012-2020 period.

Together, these new projects claim to reduce an additional 300 million tonnes of CO2 annually, or about the same as the UK’s annual emissions. 

Amid the growth in the number of registered projects, more than 3,000 additional projects are awaiting registration. Once implemented, together they could reduce another 530 million tonnes of CO2 emissions. 

Developments in carbon credit investment are bullish. However, the current commitment is still not enough to satisfy the global 2030 emission reduction targets. In fact, it represents just a third of the total funding needed to realize enough carbon credits by the decade’s end. 

The report said that another $90 billion in capital is necessary by 2030 to meet net zero goals. By 2050, that capital expenditure must grow to a whopping $1,600 billion, or $1.6 trillion, in carbon credit funding to reach the 1.5C scenario. That means a $60 billion annual investment in carbon credit projects. 

Investments in carbon credit projects have surged but a significant gap remains to achieve 2030 climate targets. Urgent funding is required to bridge the $ 90 billion deficit and accelerate the transition to a net zero future.

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