As the world continues to experience the devastating effects of nature loss, more and more companies are making commitments to reduce their carbon emissions and achieve net-zero targets through nature-based solutions. While reducing carbon emissions is crucial, it is not enough to prevent nature and biodiversity loss. Companies must also remove carbon from the atmosphere through nature-based solutions to achieve net-zero targets. This guide provides an overview of carbon removal strategies for companies and how to implement them to achieve net-zero targets.
Types of carbon removal solutions
There are two types of carbon removal solutions: nature-based and technology-based. Nature-based solutions involve using forests, soils, wetlands, and oceans to sequester carbon from the atmosphere. Technology-based solutions involve using machines and other technologies to capture carbon from the atmosphere and store it in underground reservoirs or convert it into products. Companies can use both types of solutions to achieve net-zero targets.
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Creating a carbon removal portfolio
To create a carbon removal portfolio, companies need to consider the following factors:
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Carbon target: Companies must determine their carbon target and the amount of carbon removal required to achieve it. Here, they can calculate their carbon footprint to start with to determine their carbon target.
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Permanence: Companies must choose carbon removal credits from projects with low permanence risk to ensure the removal of carbon is permanent.
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Ability to pay: Companies need to consider the cost of carbon-removal credits and their ability to pay for them.
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Strategic fit: Companies must select carbon-removal solutions that fit their business and brand and that contribute to their overall sustainability goals.
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Timing: Companies must consider the timing of their purchase of carbon-removal credits to ensure they have the credit supply when they need it.
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Exposure to risk: Companies must manage their exposure to risks arising from rapidly evolving standards and definitions of quality and individual developer risks.
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Sourcing carbon removal credits
Once a company has created its carbon removal portfolio, it must source carbon removal credits. Companies can generate direct, internal carbon removal through partnerships and investments in project developers, or even through acquisitions of developers and their projects. Alternatively, companies can buy carbon removal solutions from existing brokers and retailers or emerging marketplaces, or directly from project developers through competitive sourcing.
Buyers also need to decide how much to delegate carbon removal sourcing. Low-volume, less-experienced buyers may rely on external sourcing options, such as brokers and retailers. Higher-volume buyers may run a competitive bidding process for carbon-removal developers to control the characteristics of the products they buy and use their buying power to shape the market. One trend is the emergence of buyers’ clubs that pool resources to procure carbon-removal solutions with similar characteristics.
Keeping up with the industry
As norms regarding carbon credits continue to evolve, companies may need to rebalance their carbon removal portfolios. For example, companies may need to shift toward higher-quality, more permanent carbon removal credits. Companies must also keep up to date with the latest initiatives to support global consensus building, such as the Carbon Credit Quality Initiative and the VCMI’s Claims Code of Practice.
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Conclusion
In conclusion, companies must include carbon removal strategies in their overall sustainability plans to achieve net-zero targets. They need to consider the different types of carbon removal solutions, create a carbon removal portfolio that fits their business, and source carbon removal credits. By staying up to date with the latest initiatives and norms, companies can ensure their carbon removal strategies are effective and sustainable.
