NextGen CDR Facility revealed the advance purchase of almost 200,000 tonnes of carbon removal credits from three different projects, including Summit Carbon Solutions, 1PointFive, and Carbo Culture, making it one of the biggest CDR transactions to date.
NextGen is a joint venture between Swiss carbon project developer South Pole and Mitsubishi Corporation and is backed by founding buyers Boston Consulting Group, LGT, Mitsui O.S.K. Lines, Swiss Re, and UBS.
The company aims to unlock the potential of large-scale carbon removal and plans to buy over 1 million CDR credits by 2025.
When asked about the CDR purchase deal, Jim Pirolli from Summit Carbon Solutions commented that:
“Through this landmark purchase of CDRs, NextGen and their founding partners have taken a bold step to accelerate the implementation of the technologies and infrastructure required to permanently remove carbon dioxide from the atmosphere at a meaningful scale. We are thrilled that CDRs from our BiCRS project were selected for one of the largest, most important transactions of carbon removals in history.”
Buying Certified Carbon Removal Credits
Climate scientists said that removing CO2 from the atmosphere, either through nature or technology, is critical to meeting the 1.5°C Paris climate goal. But the recent report from IPCC made it clear that the current rates of global CDR operations are not enough.
The carbon removal market is still below the level to what the UN panel deems necessary for a livable future.
The volume of NextGen’s advance carbon removal credits purchase is equal to about 25% of all CDR transactions made globally. They will be registered under the International Carbon Reduction and Offset Alliance (ICROA) endorsed certification standards, making the credits certified and trustworthy.
The carbon credits are from projects that provide long-term storage while removing large volumes of CO2 in the coming years.
NextGen didn’t specify how many carbon credits will come from each project and their cost. But the CDR buyer said it targets an average price of $200 per tonne across its 1M tonne portfolio.
The three projects that NextGen will be buying the CDR credits include:
Summit Carbon Solutions
A portion of the 200k tonnes of CDR credits will be from Summit Carbon Solutions‘ $5.1 billion project. It represents the world’s largest tech carbon removal project, the Biomass Carbon Removal and Storage (BiCRS) project in particular. When completed, the project will remove over 9 million tonnes of CO2 per year.
To meet the stringent requirements of ICROA standards, Summit has developed a methodology for its BiCRS project that’s currently under review with the Gold Standard for the Global Goals. Gold Standard is one of the leading global registries through which CDR credits are verified to ensure project quality.
1PointFive is developing the world’s largest Direct Air Capture and Storage (DACS) project in Texas, an Occidental Petroleum initiative.
A part of NextGen advanced carbon credits purchase will include CDRs from this DACS project. Once operational, it will remove and store up to 500k tonnes of CO2 per year.
NextGen will also buy carbon removal credits from climate tech company Carbo Culture’s high tech biochar project in Finland. The manufacturer plans to produce high-quality biochar that can remove and store 2.5 million tonnes of CO2 by 2030.
The Finnish company’s approach involves producing biochar at very high temperatures for maximum carbon removal capacity, achieving 1000+ years of permanence.
Here’s what it looks like within NextGen’s CDR Facility:
Scaling up the CDR Market
NextGen’s CDR portfolio offers best practice for project standard certification. Each project, like the ones above, will be certified and verified under ICROA standards to ensure highest environmental integrity. This 3rd-party assurance will also see to it that projects benefit not just the environment but also the local communities.
Moreover, a robust MRV – monitoring, reporting, and verification – standards is crucial in the carbon removal market. It will help assure that the removal projects result in high-quality carbon removal credits that are additional, measurable, and permanent.
NextGen CDR Criteria
NextGen is developing one of the world’s largest diversified portfolios of CDRs by using different technological approaches offering significant promise to scale. These include the following:
- Biomass Carbon Removal and Storage or BiRCS,
- Direct Air Capture and Storage or DACS,
- Enhanced Weathering,
- High-temperature Biochar, and
- Product Mineralization
Companies in NextGen will have access to those diverse global portfolios of carbon removal and storage solutions. This approach enables risk diversification for corporate buyers of carbon removal credits.
In all, by providing access to deeper market expertise and pooling together buyers and sellers of high-integrity CDR credits, NextGen helps enable the carbon removal market to scale. Its landmark CDR deal sends a strong signal that corporations are serious in developing a market for high-quality CDR credits.
More details on this news and NextGen CDR portfolio will be featured at the Carbon Unbound conference on May 11 in New York City.