Offsetting startups design smart ways to sequester carbon

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In a geothermal park in southern Iceland, four stocky towers with giant fans will soon come to life. Built by Climeworks, a Swiss start-up, the towers will extract carbon dioxide from the air and inject it deep underground, where it turns into rock.

This method, known as “direct air capture,” is state-of-the-art in carbon removal technology and can store CO2 for thousands of years.

It’s also one of the most innovative ways to generate offsets, which are credits for removing CO2 from the air (or reducing emissions) that are purchased by businesses and individuals looking to reduce their footprint. environmental.

“The particular situation in Iceland is that carbon dioxide can react very, very quickly with the subsoil and turn to stone,” explains Daniel Egger, Marketing Manager at Climeworks. This process is also one of the most expensive forms of compensation available anywhere in the world, costing around € 1,000 per tonne in the new plant.

But carbon offsets more generally – which include many other types of carbon offsets – are experiencing a resurgence around the world.

As more companies set themselves net zero emissions targets, they will have to buy offsets to cover emissions they cannot eliminate, so the global market – currently around $ 400 million per year on public records – is expected to grow further.

However, offsetting, which has been around since the days of the 1997 Kyoto Protocol, can also be very problematic, and the industry has been dogged by a history of projects that have failed to remove the promised level of CO2.

Technical solutions

Climeworks is part of a growing cohort of start-ups taking a new approach to offsets – one focused on permanent CO2 removal and sequestration, instead of more traditional offsetting projects, such as forest restoration and tree plantation.

“We need technical solutions [like this] to achieve our climate goals, ”says Egger. “Nature-based solutions [such as tree planting] often have limited storage capacity – within 50 years it is back in the air. He explains that trees are very efficient at capturing CO2, but CO2 begins to be released into the air as a tree decays.

However, permanent relocation projects only represent a tiny minority of compensation projects. A recent study by Carbon Direct, a consultancy firm, tracked carbon offsets of $ 1.1 billion in official records and found that none of the projects registered offered permanent carbon elimination.

Still, the approach has attracted a growing number of deep funders. Microsoft is one of the customers who will purchase offsets from Climeworks’ Orca plant. Brad Smith, president of the software group, argues that support for these emerging carbon removal technologies now gives them a chance to be further developed.

“What we’re really doing is building a new market, creating a new market – a market where there hasn’t really been an explicit market before,” he says. “This is how we get things done in the right direction.”

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Other tech companies have also actively supported some of the more forward-thinking forms of compensation.

Stripe, the payment company, is spending $ 1 million on a portfolio of ‘frontier’ carbon removal projects that include injecting CO2 into cement, capturing CO2 in limestone on the ocean floor, and l purchase of offsets from Climeworks.

“We’re going to help these technologies lower the cost curve,” says Nan Ransohoff, climate manager at Stripe. She adds that this funding is just the beginning. “The field of carbon removal is going to need a lot, a lot more to get to the scale it needs.”

Just a fig leaf?

This year, new efforts are underway to try to get the right offsets – especially ahead of the UN’s COP26 climate conference in Glasgow in November, where negotiators around the world will try to iron out a framework. world for a carbon market. If approved, it could help create a system of carbon offsets trading between nations.

But offsetting critics continue to fear the practice could turn into a fig leaf for inaction – and argue that companies must first reduce their own CO2 emissions.

Inger Andersen, head of the United Nations Environment Program, argues that offsets must have “transparency, independence, verification and rigor” to be meaningful. “We saw compensations that were real, and we saw compensations that weren’t as big or as real as they should have been,” she says.

Even with the recent growth in the offsets market and the new generation of companies developing permanent removal methods, the overall investment in carbon removal is still well below what it should be to meet targets. climate, says Jonathan Goldberg, Founder and CEO of Carbon Direct. .

“We need a lot more capital to get carbon elimination to where it needs to go,” he says. “There is a growing interest in supporting technical forms of carbon removal, and also more and more companies are doing so.”

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