Policy push for carbon removal credits lures finance, aviation

Demand for credits reflecting the engineered removal of carbon dioxide from the atmosphere is expected by some to surge as market-friendly incentives lure buyers from sectors as diverse as technology and finance, chemicals and aviation. Many scientists believe extracting billions of tons of carbon dioxide (CO2) from the atmosphere annually, by using nature or technology, is the only way to meet goals set under the U.N. Paris climate agreement to curb climate change, as efforts to cut emissions are not happening fast enough. To meet this challenge small startups are in the nascent stages of deploying new technologies to suck up the planet-warming gas and generate tradable carbon removal credits that companies can buy to offset their emissions. So far, widespread use is years away and costs are much higher compared to more traditional ways to generate credits, such as through projects that preserve forests or fund renewable power projects. Despite sceptics' arguments that carbon removal could encourage firms to keep polluting and is unlikely to reach huge scale quickly, the U.S. Inflation Reduction Act seeks to financially turbo-charge the market through tax incentives, helping to draw in buyers from a range of sectors. The European Commission has also proposed a framework to certify carbon removals generated in Europe. Around 4.6m tons of credits from a range of engineered removal projects were purchased in 2023, data from industry tracker CDR.fyi showed, of which around 118,000 tons were delivered, backstopped by confirmation from external certification companies that the carbon had been removed. Story has more.<br/>