The NextGen CDR Facility, a joint venture between Swiss carbon project developer South Pole and Mitsubishi Corporation, has revealed its purchase of almost 200,000 tonnes of carbon dioxide removal (CDR) credits from three different projects, making it one of the largest CDR transactions to date. The credits were purchased from Summit Carbon Solutions, 1PointFive, and Carbo Culture. NextGen, backed by founding buyers Boston Consulting Group, LGT, Mitsui O.S.K. Lines, Swiss Re, and UBS, aims to buy over one million CDR credits by 2025.
Removing carbon dioxide from the atmosphere, either through nature or technology, is critical to meeting the 1.5°C Paris Agreement climate goal. The current rates of global CDR operations are not enough, as emphasised in the recent Intergovernmental Panel on Climate Change (IPCC) report. However, the volume of NextGen’s advance CDR credits purchase is equal to about 25% of all global CDR transactions.
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The three projects that NextGen will be buying the CDR credits from include Summit Carbon Solutions’ Biomass Carbon Removal and Storage (BiCRS) project, 1PointFive’s Direct Air Capture and Storage (DACS) project, and Carbo Culture’s biochar project in Finland. The credits will be registered under the International Carbon Reduction and Offset Alliance (ICROA) endorsed certification standards, ensuring they are certified and trustworthy.
NextGen did not specify the cost of the carbon credits, but they target an average price of $200 per tonne across their $1 million–tonne portfolio. Additionally, NextGen is developing a diversified portfolio of CDRs, including BiRCS, DACS, Enhanced Weathering, High-temperature Biochar, and Product Mineralisation.
NextGen’s CDR portfolio offers best practices for project-standard certification, with each project certified and verified under ICROA standards to ensure the highest environmental integrity. Additionally, NextGen’s approach enables risk diversification for corporate buyers of CDR credits.
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NextGen’s landmark CDR deal sends a strong signal that corporations are serious about developing a market for high-quality CDR credits. More details about this news and NextGen’s CDR portfolio will be featured at the Carbon Unbound conference on 11 May 2023 in New York City.
At DGB Group, we believe in the transformational power that achieving these milestones has on the industry. Because of the symbolic nature, weight, and effect such agreements carry, the carbon market is on its way to maturing, strengthening, and creating a more sustainable future for all.
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