CO2 removal solutions: A buyer’s perspective. By McKinsey.

As part of the equation to deal with climate change, it’s becoming clear the necessity to increase focus on Carbon Dioxide Removal (CDR), removing CO2 from the atmosphere through nature-based and technological solutions. And storing it somewhere environmentally safe, such as in rocks, in oceans, or underground (via saline aquafers).

CDR methods include natural climate solutions, such as reforestation and restoration of mangroves and peatlands; bioenergy with carbon capture and storage (BECCS); and direct air capture and storage (DACS). In other words, this removal can be done either chemically (for example, by using a solid or liquid sorbent) or biologically (for example, via plants and kelp).

As a result, more companies are now looking to enter the CDR market as buyers. As they do, they face potential uncertainties in a very nascent market, as well as increasingly short supply - the current pipeline of CDR capacity of 155 megatons of CO2 per year falls 80 percent short of the requirement of 500–1,200 megatons of CO2 per year suggested by the Intergovernmental Panel on Climate Change (IPCC).

According to McKinsey "Companies face a variety of options in their claims, including carbon neutral, climate neutral, climate friendly, and net zero, each with different requirements and degrees of stringency. In the absence of a global governance body, these claims are often applied inconsistently, which can lead to significant variance in companies’ climate decarbonization ambitions, the emissions considered to be covered under a claim, and the rules around offsetting emissions through emission avoidance or CDR credits. This inconsistency contributes to stakeholder concerns about greenwashing."

And recommends:

• Set a science-based climate claim, if possible, backed by a globally recognized initiative

• Reduce emissions before removing carbon

• Understand what constitutes high-quality CDR solutions

• Invest in robust due diligence and quality assurance processes

• Design a CDR portfolio

• Decide whether to generate or buy

• As a buyer, decide how much to delegate CDR sourcing

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