ZURICH: Climate mitigation company South Pole and the Mitsubishi Corporation plan to acquire US$300-800 million worth of certified carbon removal credits by 2030 with the launch of their ‘Next Generation Carbon Removal Purchase Facility’.
The initiative will purchase and retire certified credits from nascent carbon removal technology projects that can deliver permanent carbon storage and show the potential for significant cost reduction over a 10-year period.
In addition to decarbonisation efforts, the two companies say the removal of carbon dioxide from the atmosphere will be required to meet the Paris Agreement goal of net zero emissions by 2050.
Today the cost of technology-based carbon removal ranges from US$50 to over US$400/ton of CO2 removed.
“The Next Generation Carbon Removal Purchase Facility will provide a secure revenue stream for new carbon removal technologies to accelerate their development. Importantly, it will help drive down the price per ton of CO2 removed over time," explained Patrick Burgi, South Pole co-founder and director of Innovation. “By purchasing certified removal credits from our new facility, companies with net zero commitments can diversify their carbon removal portfolios and create enabling environments for technological carbon removal solutions at scale. In this sense, voluntary carbon markets can support the Paris Agreement goals while bringing down the cost of net zero compliance globally,” he added.
In addition to carbon sequestration, the facility's current portfolio also includes the world's largest DAC project under development by 1PointFive.
United Airlines, which became the first airline in 2018 to announce a 50 percent reduction in GHG emissions by 2050, has invested in 1PointFive, a joint venture between Occidental Petroleum and private equity firm Rusheen Capital Management using DAC technology provided by Canadian company Carbon Engineering.
From a pilot plant in Squamish, BC Carbon Engineering has been removing CO₂ from the atmosphere since 2015 and converting it into fuels since 2017.
United says its commitment will help 1PointFive build the first industrial-sized DAC plant in the US that will capture and permanently sequester one million tons of CO2 each year - the equivalent of 40 million trees but using a land area 3,000 times smaller.
The facility will begin construction in 2022 on 100 acres in the Permian Basin that covers 86,000 square miles of West Texas and Southeastern New Mexico.
Story Type: News