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As summer takes hold, a sense of climate “déjà-vu” prevails. Once again, wildfires are raging, including in regions like Canada where swathes of land the size of the Netherlands have been scorched. Heatwaves, which are becoming ever more prevalent on the European continent, are forcing countries like the UK to reactivate coal power units to meet the higher electricity demand for air conditioning. Year after year, record temperatures are being broken. In this escalating context, science tells us focusing solely on reducing emissions will unfortunately no longer do the trick.
The UN’s chief climate body made it crystal clear in its latest landmark report: there will be no Paris-compatible pathway without resorting to carbon dioxide removal (CDR). To keep the world’s temperatures well below the Paris agreement threshold of 2 degrees Celsius – let alone the more ambitious 1.5 target – several billion tons of CO2 will have to be sucked out of our air and oceans every year. At current emissions levels, even the 2 degrees carbon budget will be exceeded in just 22 years. While absolute emission reduction measures should remain the number one priority, CDR has been deemed an indispensable complementary process by the world’s most renowned climate scientists. In all modelled pathways, upscaling the deployment of CDR will be key, according to the report, and is “unavoidable” to counterbalance hard-to-abate residual emissions in the short to medium term. However, according to a new peer-reviewed report aimed at providing yearly updates of the state of the industry, there is a significant gap between countries’ current plans to upscale CDR and what is needed in all Paris-compatible scenarios to achieve a net zero world.
Trailblazing in the corporate world
Within this bleak climate emergency picture, the good news is that several companies have already started rising to the challenge, by taking a hard look at their entire footprint, reducing emissions and investing in projects with credible and verified carbon removal methodologies.
Carbon removal as a mitigation option differs from the more “traditional” offsetting schemes based on avoiding emissions. Instead of promising a decrease of future emissions – with varying and questionable degrees of effectiveness – CDR actually focuses on soaking up existing CO2 from emissions that have already been released into the atmosphere.
First movers and ambitious companies are increasingly active in the carbon removal market to make sure none of their hard-to-abate residual emissions remain uncaptured. Industry giant Microsoft for example has switched its carbon offsetting activity 100% to CDR as part of its pledge to be carbon negative by 2030. By mid-century, the company also committed to mitigating the historical emissions it has been responsible for since 1975. Beyond their own perimeter of activities, more and more businesses, especially when operating at a global level, are making net zero pledges for the operations of their entire supply chains (scope 3 emissions).
A four-step approach to carbon offsetting
Against this backdrop, the crux of the matter is making sure climate neutrality pledges are actually backed by credible and reliable processes. Indeed, carbon offsetting as an approach is not without risk, as it can for example result in greenwashing when the principle of additionality is not guaranteed (funding projects which would have been carried out anyway), and in case of early reversals (meaning the stored carbon ends up back into the atmosphere) or negative side-effects on biodiversity or human well-being. In this context, an increasing number of companies are facing scrutiny for engaging in deceptive greenwashing practices, as evidenced by recent news of consumer groups filing lawsuits against airlines, including KLM.
As the policy world is increasingly setting its eyes on defining a clear a “net zero” pathway, existing literature on the topic can offer valuable guidance.
Two years ago, a multi-disciplinary team from the Oxford University developed a useful methodology proposing four key building blocks to ensure net zero claims are actually fit for purpose:
Principle #1: Prioritize decarbonizing first, high-quality offsets second
According to this first principle, there exists a “mitigation hierarchy” which reiterates that the number one goal of companies should always be to first reduce their emissions. Any offset used thereafter should safeguard environmental integrity and transparency should be maintained through full disclosure of the type of carbon credits the company is using across its entire portfolio.
Principle #2: Shift to carbon removal offsetting
Emissions should not only be avoided but also removed in a clear and demonstrable way. Companies should increase the portion of their offsets that comes from actual removals versus avoided emissions.
Principle #3: Shift to long-lived storage
This calls for the trustworthy removal of carbon from the atmosphere on a (near-)permanent basis (think centuries and millennia) from CDR solutions such as from mineralization, biochar and geological storage of biooils. Long-lived storage mitigates the risk that emissions are reversed over decades, thus guaranteeing a genuine balance between carbon sinks and sources.
Principle #4: Support the development of net-zero aligned offsetting
This 4th recommendation highlights the need for early-movers to create demand supporting the scale-up of net-zero aligned offsetting which comply with principles 2 and 3.
This staged approach to mitigation is also backed by the Net-Zero Standard of the Science-Based Targets initiative (SBTi) which urges companies to first reduce scope 1, 2 and 3 emissions to 1.5°C-aligned levels and only thereafter neutralize any residual emissions left into the atmosphere.
This is a logic Accend fully endorses, as part of our mission to provide life cycle assessment and carbon credit brokerage to CDR suppliers, in order to better inform their practices and secure additional revenues for their projects. Carbon removals should not serve as a substitute to emissions reductions. Prioritizing upfront emissions reductions could include procuring renewable energy or improving product design. In the case of larger corporations, actively engaging in CDR can complement these efforts, while smaller companies with limited influence over their suppliers may have limited alternatives in the short term.
What’s next?
Contrary to compliance markets, voluntary markets are not regulated by governing bodies, thereby lacking genuine authoritative entities which can guarantee the credibility of offsetting claims.
The voluntary carbon market not only needs to be scaled-up but also beefed-up in credibility and legitimacy. Understanding what makes a high-quality removal, even what qualifies as a removal altogether, is one of the highest market entry barriers. More robust verification systems and standard mechanisms, along with clearer signals of demand, will be needed to deliver the exponential growth that is required. In parallel, experts also point to the need for consistent long-term demand, as investor certainty and related access to the credit market will be key to ensure actual project additionality. Long-term off-take agreements, in particular, will be crucial to help project developers access loan and equity funding, creating a similar ecosystem to the one which boosted the renewable energy industry a few decades earlier. In Europe, the EU institutions are betting high on the obvious climate and economic potential of carbon removal. A High Level Expert Group has been launched to provide advisory support on this topic, and the adoption of an official certification framework is expected in 2023. Outside of but not very far from the EU, Switzerland also just adopted the Swiss Climate and Innovation Act which includes a legal obligation to use CDR to reach climate neutrality in 2050 and net negativity thereafter.
Looking ahead, a carbon removal boom is definitely in the making.