The Carbon Lowdown #31
Welcome to The Carbon Lowdown! A fortnightly newsletter from Supercritical.
⭐️ Supercritical highlight ⭐️
Heading to Slush this year? Supercritical have got your emissions covered!
We’re happy to announce that we’ve partnered with Slush to offset the emissions for every single attendee's flight in addition to the emissions for running the event! Slush is leading the way in event sustainability and we couldn’t be prouder to support them.
🍃 Carbon removal
What is happening in the world of carbon removal?
🔊“The time for carbon removal has come”
BCG interviewed 100+ current and potential buyers of durable CDR to predict how the future market may evolve:
An annual demand of ~40 million–200 million tons (Mt CO2) for durable CDR in 2030, which is very likely to far outstrip the announced supply of ~15–32 Mt CO2
While the estimated demand for durable CDR is meaningful, it is still well below the volumes expected if companies are to hit their stated Net Zero targets (~1.1–1.6 Gt CO2 in 2030).
Investors, standards-setters, buyers, suppliers, and governments all play a role in advancing durable CDR and would benefit immensely if they acted today
Interestingly, the report cites limitations to its findings given the study utilises information on companies’ willingness to pay for durable CDR today. Companies may adjust their willingness to pay as knowledge of the market improves, net zero standards evolve, and supply constraints manifest in the market.
The current challenge the carbon removal market faces is a lack of serious buyers. If CDR startups can survive until demand picks up as we hit 2030, they are likely to do well!
💰 A trillion dollar industry?
How much will the voluntary carbon market be worth by 2050? Consultancies and Investment Banks predict anywhere from $10bn to $1tn. An unhelpfully large range we know… Peter Sainsbury has put together a brilliant article breaking these predictions down. The TL;DR is below:
In the short-medium term it’s likely that demand will grow much faster than supply can realistically respond
Over the rest of the decade avoidance credits are projected to fall to around two-thirds of the market, according to Shell/BCG with removal credits accounting for one-third
Offsetting the global warming impact from other GHG emissions (i.e. methane and nitrous oxide) would require multiple Gt’s per year of carbon removal (possibly 13-15 Gt). Overall, potentially up to 20 Gt per year of carbon may need to be removed by 2050. That’s a factor of 3-4 times higher than what many of the banks and consultancies have pencilled into their projections as they don't take these other GHGs into account
If we assume that carbon credits trade for $100 per tonne in 2050, and that 5 Gt per year is removed or otherwise avoided, then that puts the market size at $0.5 trillion. If we also take account of the other GHGs (methane and nitrous oxide) then the market could be worth $2 trillion (again assuming $100 per tonne).
A One Trillion dollar market for carbon removal is achievable, but a lot of stars need to align in order for this to become a reality
🔗 🚗 Mini links: Carbon removal
🏃♂️Want a rundown on how the EU Emissions Trading Scheme can reach its 2039 zero emissions target? Eve Tamme’s got you covered in her latest blog post
Need a weekly fix on all the latest and greatest in carbon removal news? Check our Andrew Lockley’s newsletter, aptly named Carbon Removal Updates
When sales of carbon removal actually benefit the climate. Read here
🌎 Climate and Net Zero
What is happening in the world of climate and net zero?
🌏 Living within our means (planetary boundaries)
“We are exceeding six of our nine critical planetary boundaries, meaning
that Earth is now well outside of the safe operating space for humanity”David Carlin, Head of Climate Risk and TCFD at UNEP FI
For the first time ever, scientists have quantified all nine planetary boundaries and found 6 to have been exceeded. The nine "planetary boundaries" represent components of the global environment that regulate the stability and livability of the planet for people. Crossing 6 is a serious warning signal.
The planetary boundary for atmospheric CO2 concentration is set at 350 ppm, the annual mean atmospheric CO2 concentration for 2022 was 417 ppm. This really emphasises the importance of climate action being considered in all that we do. We have been so encouraged by recent discussions with clients doing just that!
However, recovery is possible - one good news story is that stratospheric ozone levels have slightly recovered! We can turn this around 😁
⚖️ The Global Stocktake
The Paris Agreement’s Global Stocktake is designed to assess the global response to the climate crisis every five years, evaluating the world’s progress at cutting GHG emissions and informing countries on their climate plans. The key findings from the first-ever Stocktake have recently been released in a Synthesis Report, highlighting just how far we are from achieving the Paris Agreement’s goals.
Global temperatures are now expected to rise by 2.4-2.6°C by the end of the century
The report highlights a persistent “emissions gap”. Current climate commitments are not in line with pathways needed to limit global warming to 1.5°C
It does outline a path of transformational action to keep within 1.5°C, shared within this expert note. Key actions highlighted are the phase-out of unabated fossil fuels, scale-up of renewable energy, shift in transport and industry, and work towards the reduction of non-CO2 emissions such as methane.
The final political stage of the Global Stocktake will conclude at COP28 in December where countries will agree on how they will keep the goal of 1.5C alive. The next Global Stocktake will occur in 2028.
🔗 🚗 Mini links: Climate
🤝 There has been increasing pace gathering for a global commitment to phase out fossil fuels ahead of COP28
🚙 It has been in the UK news a lot the last few days….Rishi Sunak has released a recent green review including pushing back the ban on new petrol and diesel car sales from 2030 to 2035
📐 The Global Sustainable Development Report 2023 has been released, with 8 years since the ambitious SDG agenda was agreed upon by the UN, and with 7 years remaining until the 2030 deadline there still is a way to go
🧊 Antarctic sea ice at ‘mind-blowing’ low, well below any previous recorded winter level. This is a worrying new benchmark for a region which once seemed resistant to global warming.
☀️ Despite all the bad climate news it may seem around at the moment, there is some good news - which these graphs outline so well ☀️
🤑 Commercial
New partnerships, fundraises and exciting initiatives going on in carbon removal!
🌬 Amazon goes in on CDR
Amazon has committed to purchasing 250,000 tonnes of CDR over 10 years from DAC company, 1PointFive. This is linked with their 2040 net zero target. Amazon is putting their stake in the CDR ground, with this purchase making them the 3rd largest buyer in history.
💸 Microsoft signs an even larger deal!
Microsoft, the world’s largest CDR buyer has signed a long-term contract to purchase up to 315,000 tonnes CO2e over a multi-year period with Heirloom, another DAC company.
🔦 Carbon removal method spotlight
🪵 Biochar 🪵
Biochar is a charcoal-like material rich in stable carbon. It is produced by heating biomass in an oxygen-limited environment in a process called pyrolysis. It is most commonly used as a soil amendment in agriculture and horticulture. The feedstock to produce biochar is typically waste biomass (containing temporarily stored carbon that was removed from the atmosphere by plants through photosynthesis). Without undergoing the pyrolysis process, this carbon would be re-released through the burning or decomposition of waste biomass. While biochar itself could also be burned in the presence of oxygen (as charcoal can be), the application and mixing with soils prevent this from ever happening.
Read more on our biochar page on our website!
This newsletter is carefully crafted by Fi Watters and Tom Previte
Fi is a Climate Consultant at Supercritical with a MSc in Climate Change from King's College.
Tom specialises in selling carbon removal at Supercritical and hosts The Carbon Removal Show podcast.
