Frequently Asked Questions
New to carbon removal
Some of the key durable carbon removal technologies include:
- Biomass CDR
- Biochar: Biomass is heated in the absence of oxygen (pyrolysis), creating a charcoal-like substance (biochar) that is stored in soil or building materials.
- Biogenic CO₂ capture and storage (incl. BECCS): Biomass produces biofuels, electricity, heat, and pulp; CO₂ emissions from these processes are captured and stored. Since plants absorb CO₂ as they grow, it is considered a CO₂ removal.
- Other biomass CDR: Various methods using biomass include terrestrial biomass sequestration, bio-oil sequestration, and biomass burial.
- Direct Air Capture: Technologies that remove CO₂ directly from the ambient air using chemical processes to capture the CO₂, which is then stored in geological storage or via mineralisation.
- Enhanced Rock Weathering (ERW) and Mineralisation
- Mineralisation: Different processes where CO₂ is converted into stable forms.
- ERW: Accelerates the natural process of rock weathering to absorb CO₂, converting minerals into stable bicarbonates.
- Marine CDR: Technologies that use the power of the ocean to remove CO₂ either through enhancing the ocean's ability to absorb CO₂ or storing biomass in the ocean.
Durable carbon removal refers to methods of removing CO₂ from the atmosphere and storing it for a very long time – typically hundreds to thousands of years or more.
The ‘durability’ of a carbon removal solution is crucial because CO₂ remains in the atmosphere for extended periods, contributing to global warming. For carbon removal to be truly effective in combating climate change, the removed carbon must be stored securely and durably.
The policy and regulatory environment varies by jurisdiction. Most major developed markets have carbon policies and many implement pricing mechanisms like a carbon tax or emissions compliance market, targeting carbon-intensive industries. Carbon removal is included to a limited extent in some compliance markets. Some jurisdictions require organisations to establish net zero targets and emissions reduction plans, which implicitly need a carbon removal strategy. In most places, net zero commitments are voluntary, but there is increasing pressure for carbon and sustainability reporting, especially for organisations listed on major exchanges and those seeking strong ESG investment profiles. Progress is being made in some areas to develop carbon management policies that include Carbon removal, with clear definitions, certification requirements, and acceptable use cases. At least one jurisdiction has enacted laws against false claims, creating rules to prevent ‘greenwashing’ in the use of offsetting.
To keep global temperatures below 2 degrees Celsius above pre-industrial levels, the most sustainable scenarios require removing 170 gigatons of carbon dioxide (GtCO2e) from 2020 until net zero is achieved. This assumes that emissions reduction commitments are fully realised. Currently, the estimated capacity for carbon removal is 1.3 MtCO2e. Each organisation will have different emissions compensation needs based on its carbon intensity and the effectiveness of its emissions reduction efforts. Guidance suggests that this compensation should be less than 10% of total emissions. It is crucial to emphasise that Carbon removal should not replace emissions reduction.
Organisations with net zero commitments need carbon removal because achieving true net zero emissions requires more than just reducing their own emissions. While aggressive emissions reduction is the primary focus, some ‘residual’ or ‘hard-to-abate’ emissions will likely remain from essential activities that cannot be fully decarbonised with current technologies.
Carbon removal serves to neutralise these unavoidable emissions by taking an equivalent amount of CO₂ out of the atmosphere.
Carbon removal, also known as carbon dioxide removal (CDR), is the process of actively removing carbon dioxide (CO₂) from the atmosphere and storing it durably. The goal of carbon removal is to help mitigate climate change by reducing the concentration of CO₂ in the atmosphere. This differs from emissions reduction, which focuses on preventing CO₂ from entering the atmosphere in the first place.
Carbon removal technologies and approaches range from nature-based solutions like afforestation and soil carbon sequestration to engineered solutions such as Direct Air Capture (DAC) with geological storage and bioenergy with carbon capture and storage (BECCS).
At ClimeFi, we focus on engineered solutions.
New to buying carbon
Developing a carbon removal strategy with a portfolio approach diversifies investments across different technologies and projects, significantly mitigating risks. The carbon removal market faces uncertainties in technological development and project delivery; by spreading investments, organisations reduce dependence on any single solution's success.
This strategy also allows for balancing costs, as various technologies have different price points and scalability potential. A diverse portfolio accelerates overall market development, supports a broader range of positive environmental impacts, and ensures adaptability to evolving best practices, leading to a more resilient and impactful climate strategy.
There are currently 15 recognised novel carbon removal method groups and many suppliers offering credits, pre-purchase agreements, or hybrid investment/supply arrangements. Like traditional carbon removal, this market is challenging for buyers to navigate due to the lack of a standardised process, tools, and data for procurement. Buyers can either develop in-house expertise or collaborate with qualified experts. Assessing project delivery risk is crucial, especially for pilot and demonstration projects in the early stages of scaling up novel carbon removal methods.
A carbon credit is a verifiable instrument representing the reduction or removal of one metric tonne of carbon dioxide equivalent (CO₂e) from the atmosphere. These credits are generated by projects that prevent emissions or actively remove CO₂, certified by independent third parties. When an organisation buys and ‘retires' a credit, they fund a project that achieves measurable climate action.
For a carbon credit to be credible, the underlying project must be real, measurable, additional (meaning it wouldn't have happened without the credit), permanent, and unique (not double-counted). Organisations use these credits to offset unavoidable emissions as part of their sustainability strategies.
The market for durable carbon removal is supported by evolving standards, methodologies, and protocols to ensure high-quality, verifiable impact. Key standards include Puro.earth and Isometric, which specifically certify engineered removal methods.
These frameworks are crucial for building trust, providing consistent guidelines, and ensuring that purchased carbon removal credits represent genuine, long-term climate benefits.
Sourcing durable carbon removals begins with identifying reputable project developers and conducting thorough due diligence on their methodologies, permanence, and verifiability. Organisations often enter into "forward purchase agreements" to finance developing projects.
Procurement involves negotiating terms and contracting for the purchase of credits, which are then issued by recognised registries upon verified removal. Management includes continuous third-party verification, transparently retiring credits to prevent double-counting, and reporting on the achieved climate impact, ensuring the integrity and credibility of the carbon removal investment.
Most of the 2 gigatons of carbon removal today comes from nature-based solutions, which store carbon through natural processes. While valuable, these methods have limited durability. Novel or engineered carbon removal uses advanced techniques to store carbon for hundreds or thousands of years. Although scientifically validated, these methods are still emerging, resulting in limited scale of supply and high costs. According to the like-for-like principle, long-lived emissions from the long carbon cycle can only be neutralised by long-duration or permanent carbon removal.
Experienced carbon buyers
The Science Based Targets initiative (SBTi) emphasises that carbon removals should primarily address residual emissions. While the SBTi has historically focused on internal emission reductions, recent draft guidance (v2.0 of the Corporate Net-Zero Standard) is exploring a more explicit role for carbon removals, including potential interim targets for their purchase.
The SBTi's approach generally requires that permanent carbon removals neutralise residual emissions to reach net-zero. The updated guidance is also consulting on new criteria for the durability of removals, potentially introducing a ‘like-for-like’ principle where the storage duration of removed carbon matches the atmospheric lifetime of the emitted greenhouse gas. This signifies a growing emphasis on high-quality, durable removal solutions and encourages companies to begin investing in these solutions well before their net-zero target year.
The ClimeFi business model is built on high integrity, transparency, and independence from projects. ClimeFi exclusively represents the interests of the buyer, providing full transparency on project scoring, due diligence, monitoring, risk assessments, and prices.
Unlike many third parties, ClimeFi sells CDR credits at the same price that they were sourced. ClimeFi never engages in credit trading, ensuring an unbiased project selection. Our entirely objective process allows no room for conflicts of interest. What’s more, we provide full transparency into our granular supplier data (including names) and volume availability.
In this way, we are able to provide our buyers with a portfolio of CDR solutions bespoke to their specific project needs, along with quarterly project monitoring to ensure that buyers remain fully in control.
While there is scientific agreement that organisations with net zero commitments should start procuring carbon removal well before their net zero target date, and principles for responsible use have been established, guidance on acceptable use within an SBTi plan is still limited. Previously, SBTi guidance focused only on emissions reductions, leaving organisations to decide independently how and when to address residual emissions. This was interpreted as advising against carbon removal procurement before completing emissions reductions, which is counterintuitive given the time needed to scale up supply and could lead to supply issues. The revised Oxford Principles for Net Zero provide basic principles for organisations to follow. Further guidance is expected in 2025 from the EU Commission on certification and use rules, and from public and private procurement programmes. Without detailed guidance, organisations need to develop a carbon removal strategy based on reasonable policy assumptions and manage this risk effectively.
Managing project and delivery risk until carbon is delivered and carbon credits are issued is crucial. This requires expert knowledge of the method, thorough due diligence, and ongoing monitoring. Often, project reporting is insufficient and lacks independence and rigor. Therefore, various market service providers now offer services such as standard ratings, bespoke independent assessments, and specialist monitoring to support effective risk management.
