Exploring whether to buy carbon removals as a business?
Whether it’s to address residual emissions and fulfil a net zero target, or to demonstrate real climate leadership by funding the vital scale up of carbon removal technologies, many businesses are looking into buying carbon removal today.
In this article we’ll help you get started on your carbon removal journey, covering:
It’s an exciting time in the world of carbon removal. Traditional nature-based carbon removals are rapidly being joined by innovative new technologies – giving us a variety of methods to pull carbon emissions back out of the atmosphere.
Let’s take a look at some of the common carbon removal project types you’ll come across, and the pros and cons of each for carbon buyers.
We’ll break them down into the following 3 groups:
What is nature-based carbon removal?
Well, oceans, soils, and plants all absorb and store carbon dioxide through processes such as photosynthesis (wherein plants convert carbon dioxide into sugars).
This all happens naturally as part of the earth’s carbon cycle.
But, nature is constantly facing threats which reduce the amount of carbon absorbed and stored.
Carbon-rich forests are being cut down to sell as timber or to make room for industrial plantations and infrastructure. Increasing temperatures are warming ocean water and reducing its ability to absorb and store carbon dioxide. Intensive farming processes are leading to widespread soil degradation. And so on.
So, a crucial way to increase carbon removal is to restore these ecosystems and create new ones (as well as protecting existing ones, but that’s an emissions avoidance activity rather than carbon removal).
Nature-based carbon removal project types include:
The pros of buying carbon removal from nature-based carbon removal projects include:
And the cons:
What is engineered carbon removal?
Well, new and innovative technologies are being developed which have the potential to reliably remove vast amounts of carbon dioxide from the atmosphere and prevent them from ever being re-released – effectively pulling emissions that we’ve already emitted back out of the atmosphere.
Currently the main purely engineered carbon removal solution is Direct Air Capture.
At Direct Air Capture (DAC) plants carbon dioxide is captured straight from the air around us, using chemical reactions which bind with the carbon dioxide in the air and make it possible to separate it.
To make the carbon removal permanent, it then needs to be stored for good – known as Direct Air Capture and Storage.
This is done through geological storage, wherein the carbon dioxide is injected deep underground where it mineralises into a solid form and will remain for millennia – effectively putting fossil fuels back where we found them.
Read more about how it works in our deep dive on Direct Air Capture.
The pros of buying carbon removal from engineered carbon removal projects includes:
And the cons:
Other innovative carbon removal methods exist or are being developed which are somewhere in between nature and engineering – methods that amplify natural carbon removal processes to increase carbon removal.
The pros and cons of these project types vary slightly, but are largely in line with those for engineered carbon removals: they offer the potential for much-needed large-scale, measured, permanent carbon removal, but today they are early-stage and so their carbon credits are expensive and carry the risk that the method may ultimately be unsuccessful.
The decision of which projects to buy carbon removal from is one that ultimately only your company can make.
We need both nature-based and engineered carbon removal solutions to meet the scale of carbon removal that is needed to limit warming and meet global net zero targets – so all of these projects need funding.
The big differences as it stands are: the cost of carbon credits, the durability of the carbon removal – i.e. whether the method offers short-term or long-term storage, and the risk of the carbon removal not being delivered. So, your company will need to weigh up your budget availability and how comfortable you are with risk and non-permanence – bearing in mind that you must opt for permanent carbon removal if your aim is to fulfil a net zero target.
Our recommendation is to create a portfolio of different carbon projects to buy carbon removals from to balance out the costs, risks, and delivery timelines associated with different types of projects – as well as enabling you to choose the geographic spread of your purchases.
For instance, you could create a carbon removal portfolio which looks like this:
Then, over time, as innovative carbon removal solutions successfully scale up, deliver removals, and become more affordable, you can increase the proportion of these types within the portfolio – in line with the best practice approach of the Oxford Offsetting Principles.
Of course, it goes without saying that within that portfolio you need to do your due diligence to ensure that the individual projects you buy carbon removal from are all high-quality.
There are several different ways to go about buying carbon, enabling you to make a one-off purchase or set up an ongoing relationship – depending on what fits the needs of your company.
Carbon removals can be bought directly from suppliers i.e. by engaging with individual carbon projects like 1PointFive for Direct Air Capture or Treeconomy for afforestation and reforestation.
If you want to set up a portfolio of multiple projects to buy carbon removal from, you can purchase through a dashboard like Lune’s – with the advantage that multiple different projects are available all in one place, and they’ve been pre-vetted for quality.
Once you’ve decided on your approach, you may need to determine a process for keeping track of your carbon removal purchases.
The carbon credit retirement timelines (i.e. when the carbon removal actually takes place and is attributed to you as a buyer) for carbon removals can vary significantly because those early-stage carbon removal projects are typically selling pre-purchase carbon credits to fund their development, with the promise of delivering the credits once removals take place. So, you’ll need to have a record of the purchases and when they’re due to be retired for your records – especially if you’re using carbon removals towards a claim like a net zero target. Take a look at Shopify’s carbon credit tracking template as a starting point.
A good first step is to take a closer look at the type of carbon removal projects out there and get familiar with the differences between them – so we’d suggest requesting access to the Lune dashboard and having an explore. And, as always, if you’d like to chat through anything in the process, we’re always happy to help if you get in touch.
Lune will offer trusted, high-quality carbon projects to Visa’s global network of merchants, banks, and partners – working together with a goal to scale climate action.
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