Carbon Removal: Innovative Solutions

As the IPCC have made clear, carbon dioxide removal plays an integral role in the journey to reach net zero emissions. Realisation of the importance of carbon removal as a method to tackle emissions, most significantly residual emissions, has been reflected by the growth of the voluntary carbon market. According to Ecosystem Marketplace, the voluntary market exceeded the value of $1 billion at the end of 2021. The expansion of the market has naturally led to an increase in the number of innovative carbon removal projects, with standards developing complementary methodologies and protocols. We are going to explore three types of removal project which are becoming more prominent within the voluntary carbon market: peatland; biochar; and direct air capture and storage.

Peatland naturally stores carbon. Its water-logged consistency reduces the decomposition of plants, forming a soil which retains carbon (IUCN, 2021). According to the Office for National Statistics, Peatland makes up 12% of UK land. It is estimated that 3.2 billion tonnes of carbon is stored via UK peatland (UK Centre for Ecology and Hydrology). As a natural carbon removal method, peatland provides co-benefits including improved biodiversity, water quality, and other extensive ecosystem services (IUCN, 2021). According to the ONS, restoration of all peatland within the UK would cost between £8-£22 billion, however the benefits of restoring only 55% would produce a value between £45-£51 billion. The voluntary carbon market is a potential mechanism for the encouragement and funding of peatland restoration. The UK has produced its own Peatland Code, a standard producing carbon units solely from peatland projects. Additional standards, including the Verified Carbon Standard, have also established peatland restoration methodologies.

Biochar is a new negative emissions technology which converts carbon stored in biomass into a solid biochar material via a ‘thermochemical conversion process’, storing the carbon for hundreds or even thousands of years (Fawzy et al, 2021). The feedstock of biochar is biomass, which can be sourced from waste materials or dedicated crops. It is important that these feedstocks are sourced sustainably, to ensure there are no adverse environmental impacts. Biochar can be used for multiple purposes, from storage in soils to building structures. For example, biochar can be added to soils to improve water and nutrient retention or reduce acidity (RHS, 2022). Standards such as Verra's Verified Carbon Standard, the Climate Action Reserve, and Puro are incorporating this new technology into their portfolio of projects.

Direct air capture and storage is an industrial removal technology which is relatively new to the market. This technology directly captures CO2 from the air and converts it into a liquid which can be pumped underground. The carbon dioxide then mineralises and becomes part of the rock, where it is stored permanently. This carbon removal technology uses a small area of land. However, it has high associated costs and energy usage (IEA, 2021). There are currently 19 direct air capture plants worldwide (IEA, 2021). The Orca plant in Iceland, launched in 2021 by Climeworks AG and Carbfix, is currently the largest direct air capture and storage plant. The plant is powered by renewable energy and energy from waste. At maximum capacity, it draws in 4,000 tonnes of CO2 per year. The Orca plant is a pilot so amounts are low; but now bigger plants are being developed. Climeworks are creating a new ‘Mammoth’ plant, launching in 2022, which will store up to 36,000 tonnes of CO2 per year. The organisation 1PointFive is also developing a plant which they anticipate will capture 1 million tonnes of CO2 per year, launching in 2024. It seems there is some way to go, yet if this technology can be scaled, direct air capture and storage could be a highly effective permanent carbon removal technique. It also has the potential to provide co-benefits such as improving human health (Cobo et al, 2022). Standards such as Verra and the American Carbon Registry are beginning to develop methodologies which incorporate direct air capture and storage.

The increasing emergence of innovative carbon removal mechanisms, such as those discussed, is a positive sign that carbon removal is gaining traction and becoming more prominent with regards to climate activity. The voluntary carbon market could be a highly influential factor for new carbon removal projects, encouraging project developers and reassuring investors, and by producing new rigorous methodologies that ensure high integrity. At Kita, our vision is that insurance will also have an integral role supporting these new forms of carbon removal within the voluntary market, to help mitigate risks and enable these innovations to scale. With the pressing need for carbon removal, these developments represent a positive step forward and we look forward to the opportunities ahead!