In search of carbon removal offsets

What our (extremely arduous) journey to find carbon removal offsets tells us about the state of voluntary carbon markets today, and some ideas about how we can fix them.

by Jane Zelikova, chief scientist

Since our start five years ago, we have at several points tried to purchase carbon removal credits to offset our emissions and do our small part in building demand for carbon removal. But every time we tried, we failed. Our experience illuminates broader issues with carbon offsets and we, and others, have some ideas for how to move forward in a productive way.

First, the “why”

Carbon removal is a climate necessity. Climate experts agree that climate mitigation will require the elimination of emissions as well as carbon removal (i.e. “negative emissions” or the extraction and durable storage of CO2 from the air) to the tune of a billion tons of CO2 per year in only a few decades. After 2050, removals will need to reach 10 billion tons of CO2 per year to begin chipping away at the emissions already accumulated in our atmosphere.

To make this future a reality, we need to build a carbon removal industry that currently doesn’t exist. This means that private organizations — from small NGOs like Carbon180 to the largest publicly-traded companies in the world — seeking to maximize their climate impact should begin investing in carbon removal today. One way they can get started is by shifting carbon offset budgets towards offsets that reliably remove and sequester carbon from the atmosphere and at the same time:

  • Provide early demand for carbon removal that enables innovators to navigate financing and regulatory ecosystems more swiftly, driving down costs and increasing volume, and
  • Signal alignment with climate science that says we need negative emissions, bolstering the will for policymakers and other organizations to follow suit.

Voluntary carbon offsets have seen a surge of interest from companies across industries and geographies over the past year. Net-zero (and net-negative) commitments, plus a growing recognition that conventional emission avoidance offsets fall short across a number of dimensions, are pushing more interest in carbon removal offsets. We think this interest in removal offsets is a good thing, but our experience navigating voluntary carbon markets in search of carbon removal offsets is illustrative of many existing barriers.

A tale of two offsets

To find reputable carbon removal offsets, we started as we always do — with research. Conventional offsets come in two flavors: (1) emission avoidance or reductions (i.e. paying other emitters to reduce their emissions more than they otherwise would or avoiding activities that produce emissions), and (2) carbon removal.

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Figure 1: Greenhouse gas offset transition (Gillenwater et al. 2007)

Others have explored the efficacy of existing carbon markets and offset frameworks, and found convincing evidence that carbon offsets have rarely delivered the robust emission reductions that they promise, while creating negative impacts on ecosystems and communities that deploy these projects. Our hope was that carbon removal offsets could address many of these concerns.

What we found was concerning at best.

Unfortunately, finding carbon removal offsets to purchase proved challenging. For one, it took immense effort to mine existing carbon offset registries for projects that claim to remove carbon — in addition to the well established registries like Verra and Gold Standard, there are many smaller voluntary carbon offset registries, each with its own set of protocols and projects. We also found that some emerging technologies like direct air capture from companies like Climeworks were skipping registries and selling directly to consumers (we have purchased Climeworks offsets in a limited capacity in the past).

Once we identified offset registries and retailers, it was hard to determine which projects were actually carbon negative. The vast majority of potentially carbon removal projects included nature-based approaches like reforestation, afforestation, wetland restoration, and agricultural soil carbon sequestration — but the line between removal and reduction was often blurry. This difficulty in finding robust carbon removal credits is an issue and even with a decent amount of effort and expertise, we felt stymied by the fragmented and opaque nature of the markets.

Once we had a list of offsets that could be delivering carbon removal, we ran into two additional problems:

1. For nature-based carbon removal offsets, it was incredibly difficult to assess the quality of removal across key dimensions like volume, additionality, permanence, leakage, and non-carbon impacts. It took immense effort to figure out what the projects were actually doing and how much carbon was being removed in a verified way, for how long, and at what cost.

2. Technological carbon removal projects with more directly verifiable and permanent carbon storage were both rare and really expensive. We are a small organization and paying to offset our emissions at $1000/ton for direct air capture and storage, a carbon removal pathway that is pretty clearly additional and permanent, would equate to $150,000–200,000 for five years of operations. The cost barrier is more substantial for large companies who have emissions on the order of millions of tons annually. Stripe, a corporate climate action leader, paid between $100–$800/ton for carbon removal that met their high thresholds for additionality and permanence. Very few companies are willing to pay even $100/ton for offsets today.

Where we ended up

To date, we still haven’t been able to offset our emissions with carbon removal. Of the 36.7 MtCO2e forestry and land-use voluntary carbon offsets transacted in 2019, less than 10% are based on activities that remove carbon from the air (activities like reforestation and improved soil management). We walked away feeling like robust carbon removal offsets are few and far between, and the few that do exist are selling at a price point that is not accessible to us. On the rare occasions that carbon removal claims are made by offset projects, they are not rooted in carbon cycle science.

We absolutely don’t want perfect to be the enemy of the good, but we genuinely can’t tell what is “good” in the existing voluntary offset market today. The lack of transparency and robust accounting, the lack of accountability, and the complexity of the markets and registries make the assessment of quality offsets virtually impossible. Ultimately, we didn’t believe the carbon removal credits that we could find and afford on the market today represent the high-quality carbon removal we see as imperative for meeting climate goals.

What’s next?

Despite the challenges associated with sourcing robust carbon removal credits today, we see an immense opportunity to invest in carbon removal in parallel with offsetting. Corporate sustainability and climate programs can support a burgeoning carbon removal industry and ensure more capital goes directly to durably, safely, and equitably removing carbon from the atmosphere while limiting fraud, host-community harm, and bureaucratic inefficiencies that are emblematic of carbon offsetting schemes.

If your company is committed to offsetting emissions, follow the Oxford Principles for Net-Zero Offsetting and shift offset investment towards activities that remove and securely store carbon from the atmosphere.

Beyond offsetting, companies can:

  • Augment offset purchases with high-quality, more expensive projects that are delivering verifiable outcomes and shift to carbon removal with storage offsetting as soon as possible,
  • Build in supply chain procurement of carbon-removing products (e.g. concrete, materials, food),
  • Invest strategically in carbon removal companies,
  • Collaborate to create a central hub for purchasing quality carbon removal offsets and/or setting standards for apples to apples comparison across carbon removal solutions, and for disclosing carbon removal purchases to external stakeholders,
  • Leverage corporate philanthropy to pool resources to drive down carbon removal costs, and
  • Lobby for policy change.

Carbon removal is an emerging opportunity that needs to be easy to access, grounded in an accrediting system that meets high standards of verification, and affordable. Developing a system that credits carbon removal will require new standards that balance the need for viable project development, rigorous and transparent accounting, and broad accessibility. While there is still a lot of work to do to create these standards, this is an opportunity to design a mechanism for consumers, companies, and governments to invest in the planet with effective and measurable climate action in mind. Investing in carbon removal now provides tangible climate benefits while also helping build the carbon removal industry and driving down the cost of carbon removal solutions in the future.

We are here for it!

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