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Carbonfuture Closes Series A Round, Led by SIX, to Transform Global Carbon Removal Market
Carbonfuture Closes Series A Round, Led by SIX, to Transform Global Carbon Removal Market
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May 9, 2023
The climate crisis is one of the great challenges facing humanity today, and urgent action is needed to address it. While uncompromisingly reducing and avoiding fossil emissions is essential, it is no longer enough to ensure a livable future for generations to come. To meet this challenge, we must also prioritize the scaling of durable carbon dioxide removal (CDR) to remove carbon from the atmosphere.
To address this urgent need, Carbon Removal Basel recently brought together top innovators and thought leaders in the carbon removal space to discuss the current state of CDR and identify ways to scale the industry to meet our goals. The event was a true testament to the power of collaboration and the importance of making carbon removal a collective effort.
In this blog post, we will delve into the state of carbon dioxide removal, the challenges facing the CDR industry, the various CDR methods and technologies available today, and the novel solutions that could help us achieve the required amount of CDR by 2050. We will also examine the key insights and takeaways from the Carbon Removal Basel summit, including the role that collaboration and trust can play in accelerating the carbon removal market.
The current state of CDR falls far short of what is needed to address the urgent threat of climate change. The State of Carbon Dioxide Removal Report estimates that today, we are only removing about 2 gigatonnes of carbon dioxide from the atmosphere annually, which is around 5% of the current CO2 emissions globally. 99.9% of this encompasses conventional, managed CDR on land, like afforestation. While these activities are essential, they are by no means sufficiently durable ways of sequestering removed carbon, and they are also not scalable enough to meet our goals. They have to be complemented by novel, durable CDR, which includes biochar carbon removal, direct air capture, enhanced weathering, and other emergent carbon removal technologies, which today only accounts for less than 0.1%. Eventually, to reach net zero and in the second half of the century net negative emissions, all CDR needs to be durable. To meet our CDR goals, we need to scale up the industry by more than 5,000 times with unprecedented growth rates by 2050. To quote Jan Minx, co-author of the report, who recently presented its findings at the Carbon Removal Basel summit: “If we want to accelerate, it’s all about the next 10 years. The formative phase for CDR needs to start now.”
By the end of this post, you will have a better understanding of the urgent need to scale CDR and how we can work together to achieve this critical goal.
Scaling CDR to climate relevance over the coming years and decades will require supportive regional and national policy. Good policy creates trust by providing clear rules, predictability, incentive structures, and compliance mechanisms that are essential to businesses, governments, and investors looking to make long-term commitments.
In Europe, a number of policies are being advanced to support this, including the Net Zero Industry Act (NZIA) and the Carbon Removal Certification Framework (CRCF), a first-of-its-kind attempt to define quality carbon removal. Negotiations on the CRCF are currently underway in the European Parliament and Council of Europe, and the European Commission is elaborating on which technologies will qualify and how. The CRCF has the potential to become the gold standard for CDR legislation globally, and the policy panel at Carbon Removal Basel discussed its potential impact and shortcomings. “The momentum is building for CDR policy in Europe. There is a real opportunity to lead by example and set the gold standard globally for what constitutes quality CDR,” said Sebastian Manhart, Senior Policy Advisor at Carbonfuture, who moderated the discussion. “The CRCF is meant as a tool to identify the quality and uncertainties of CDR and characterize carbon removal in a transparent way in order to recognize the qualities, benefits (beyond carbon removal), and advantages of the different solutions.” said Fabien Ramos, Carbon Removals Policy Officer at the European Commission.
The current draft proposal for the CRCF could be made more ambitious by refocusing permanent removals from location to duration, acknowledging the potential of biochar carbon removal (BCR), and extending the geographical scope of the framework to allow suppliers from outside the EU. Venna von Lepel, Chief Carbon Officer and Chief Marketing Officer at Novocarbo, shared her perspective from a CDR supplier point of view, stating, “What we would like from policy is a clear commitment and a framework like the CRCF and potentially other legislations to provide guidance in a very novel and volatile market. Specifically, we would like to see the CRCF acknowledge the potential of BCR, as it is a promising method that has yet to be fully recognized.” Eli Mitchell-Larson, Chief Science and Advocacy Officer and Co-Founder of Carbon Gap, added that “governments and policy makers have an immediate role to play in helping to provide a clear and unambiguous definition of what it means to be climate neutral at a sub-national level and in making sure it’s a tool for scaling CDR.” The upcoming 2040 climate target presents a big opportunity for the CDR community to contribute to policy. “If we get the scope of the target right, and the specific potential sub-targets and targets for removals on the map, that will then tickle down into the climate policy pillars that have to be designed to achieve these targets,” emphasized Eve Tamme, Managing Director of Climate Principles. She also urged everyone to engage and impact the process, emphasizing that we are all policy advocates.
While regulatory frameworks for carbon removal are being developed, voluntary action from corporate actors has driven much of the investment in carbon removal. The Voluntary Carbon Market (VCM) has been the place for innovation in this space, providing a platform to test and prove carbon removal solutions before implementing them at scale with stronger policy tools. Waiting for the perfect solution is not a viable option for companies that are committed to addressing climate change. Investing in high-quality carbon removal credits alongside decarbonization efforts is crucial for companies to make a real difference towards mitigating climate change, meeting their sustainability goals, and helping the carbon removal industry scale to be climate relevant.
During the second panel discussion at Carbon Removal Basel, early movers from LGT, Bain & Company, Swiss Re, and South Pole / NextGen CDR Facility shared their experiences with purchasing CDR and acknowledged the uncertainties and lack of guidance for buyers in the current market. They also emphasized that waiting for the perfect solution is not an option because the urgency of the climate crisis demands action. Ursula Finsterwald, Head Group Sustainability Management at LGT Private Banking, emphasized the importance of thinking long-term and starting small, stating, "You don’t need to do everything at once. Even though there may be little guidance and standards at this point in time: Just begin." Taking action now is not only important for addressing climate change but can also provide companies with unprecedented opportunities for business, employer branding, and market creation. As Henning Huenteler, Expert Associate Partner at Bain & Company, stated, "Embrace the uncertainty and don’t wait for the perfect solution. It’s too urgent a problem not to act now." A portfolio approach to CDR purchasing can help mitigate risk through diversification and investment in various technologies, nature-based to technical, advanced to emergent, arriving at an average price that is reasonable for the company.
Establishing trustworthy standards and methodologies is crucial for building buyer confidence in the carbon removal market. At the Carbon Removal Basel summit, experts emphasized the need for trustworthy monitoring, reporting, and verification (MRV) processes that are digitized and automated for greater transparency and market uptake. Independent verification is necessary for carbon removal credits to be reliable and valuable to buyers. This requires a set of quality and process parameters detailed in trustworthy CDR methodologies, specific to a given technological approach, production-scale, or regional application. These methodologies must be science-based and rigorously implemented to ensure transparency and trust in all MRV processes stakeholders are involved in.
As Travis Caddy, Product Owner at C-Capsule, emphasized during our panel discussion on MRV and Standards at CDR Basel 2023, "The way we see trust in the CDR market is separation and independence. This means having a clear separation of roles, whether it be the Standard setter, the issuing body, the registry provider, or the marketplace." Different entities can focus on developing methodologies, providing third-party validation/verification services or dMRV services, issuing carbon removal credits or operating the Standard’s registry, all under a given Standard’s umbrella. While these individual jobs are complex and detail-oriented, the processes must be lean to enable innovation and continuous improvement. The methodologies and rules set by a Standard must evolve while maintaining market stability for all market actors to plan and invest mid to long-term.
To accelerate the adoption of trustworthy Standards and methodologies in the carbon removal market, there are several key strategies to consider. Firstly, the digitization and automation of Standards and processes for engineered carbon removals can help make MRV processes more efficient and transparent. Secondly, when implementing a Standard, transparency is crucial to demonstrate the optimization potential and increased efficiency it can bring to a company's processes. Lastly, stakeholders must understand the needs of different Standards and bodies regarding data reporting and processing to ensure streamlined and reliable credit generation. At Carbonfuture, we aim to provide a single digital platform to host all relevant data and facilitate the credit generation process by an independent Standard. While an EU-level agreement could provide stable grounds for decades, it is important to balance stability with the need for flexibility to adapt standards to new scientific findings and innovations.
In summary, the carbon removal industry is working towards greater transparency and dependability through science-based methodologies and independent verification. As a result, the market is becoming more resilient, which will lead to increased credibility and trust in the long run. However, building this trust will require time and continued efforts to ensure all stakeholders are aligned towards a common goal.
In conclusion. At a time when urgent action is needed to confront the climate crisis, scaling durable carbon dioxide removal (CDR) is essential. The Carbon Removal Basel summit highlighted the critical role that trust and collaboration play in accelerating the carbon removal market. Through supportive policy, early movers, and a shared commitment to science-based methodologies, we can create a future where high-quality CDR technologies are widely available and used to mitigate the effects of climate change. Together, we have the power to address the climate crisis and create a sustainable future for generations to come. Let's continue to prioritize trust and collaboration as we work towards scaling durable carbon dioxide removal and achieving our goals for a healthier planet.
Want to rewatch the panels and keynotes of Carbon Removal Basel 2023?
Visit: https://www.carbonfuture.earth/basel
At Carbonfuture, we build trust throughout the carbon removal journey with our rigorous, data-driven approach, ensuring unmatched quality and reliability of carbon removal.
