The process of purchasing carbon offsets — whether they are focused on removals, such as those enabled by direct air capture technology, or avoidance, such as projects that protect forests and other natural carbon sinks — is still complex for corporate buyers.
But pioneering companies and organizations are working to standardize, educate and define these markets for the future.
As the year winds to a close, several of those trailblazers have published reports, guides and tools that could help shape best practices in the months to come. Here is a brief download on three resources released in the last quarter.
Shopify’s carbon removal buying guide
Thursday, the commerce technology company Shopify released "Buying Carbon Removal, Explained." The 28-page PDF outlines what the company, a climate leader that has prioritized investing emerging carbon removal technologies, rather than buying a large volume of low-quality credits, has learned in its past few years in the market.
This guide follows Shopify’s publication of the "Carbon Removal Playbook" in 2021. The more recent analysis outlines the differences between offsets, removals and reductions and then walks the reader through important considerations and steps that should be taken before, during and after making a carbon removal purchase.
This is a resource for companies in the early stages of their sustainability journey that are looking for clear and concise education about carbon markets. For example, the guide outlines how to go about creating a carbon credit portfolio by identifying the category a company might be most interested in supporting and investing in multiple technologies for each.
Ecosystem Marketplace’s voluntary carbon market analysis
At the end of summer, Ecosystems Marketplace released its State of the Voluntary Carbon Markets 2022 — impressively titled "The Art of Integrity." The big takeaway was that the voluntary carbon market is officially valued over the $2 billion mark, quadrupling from 2020 numbers.
Much of that growth in value was driven by an increase in nature-based solutions and prices of carbon credits rising about 60 percent in 2021, according to the analysis. Credits for forestry or land use and renewable energy were the most popular, measured in metric tons of CO2 removed, the research found.
Credits for forestry or land use and renewable energy were the most popular, measured in metric tons of CO2 removed, the research found.
The report also outlines the more than 170 types of carbon credits available on markets today and their level of popularity among buyers — such as projects involving rural solar farms, geothermal installations, recycling initiatives or efforts to reduce livestock methane. The report analyzes what happened in the industry over the past year with indications of what that might mean for the future.
Frontier Climate’s tool identifying gaps to scaling carbon removal
This dynamic database, "Carbon Removal Knowledge Gaps," outlines the next phase of carbon removals. Published by Frontier Climate, a fund launched by Stripe that is pioneering new contract types and purchase agreements for carbon removals, the tool shows where major gaps in knowledge, technology and innovation lie when it comes to different options and solutions across the sprawling carbon removal field.
The resource is available free online and is filtered by factors including the pathway (such as direct air capture or geochemical), impact levels (very high, high or medium), skill sets needed for deployment, and a time horizon of when the technology could reach the market.
The tool also outlines five categories of knowledge gaps including those surrounding fundamental science, standardized measurement, reporting and verification, tech and engineering needs, support governance and novel removal pathways. As an example, the support governance gap includes the need to assess what new institutional structures must be put in place to facilitate carbon removals, what legal frameworks will need to be developed and how community engagement should be included as part of carbon removal strategies.
Each entry is a form of carbon removal that is defined and tagged with the impact level it could have on reducing carbon emissions, the timeline for implementation of the technology, a list of key experts and a set of research recommendations and questions. Carbon removal methods such as enhancing photosynthesis, nutrient removal via biomass, optimized sensors for controlled reactors and geological storage of dilute CO2 are all listed in the database.
As an example of how the resource evaluates listed methods, the database classifies enhancing photosynthesis as a solution that is in the pilot stage, requiring a skill set in synthetic biology, metabolic engineering, plant biology and biochemistry. According to the research, this method has a medium-long time horizon for the technology to be implemented, with a medium impact on carbon emissions. The key companies and organizations doing work in this space include Living Carbon, Salk Institute’s Harnessing Plants Initiative and Homeworld Collective. To push this method forward, the database recommends researching the "theoretical maximum carbon fixing efficiency increase for plants" and identifying the plants that can achieve the largest increase in carbon fixing.