A Carbon Offset That Isn’t a Phony

At the Wall Street Journal Amrith Ramkumar reports on a completely different style of carbon offset—carbon capture and sequestration (CCS). We may see an actual industry growing out of it:

Founded in 2009, Climeworks is effectively carrying out what trees do by taking carbon dioxide out of the atmosphere. The process promises to store the carbon in the earth for thousands of years. The company makes money by removing the carbon on behalf of businesses that can claim they are becoming carbon neutral.

Microsoft, e-commerce company Shopify Inc. and payments firm Stripe Inc. have prepaid or agreed to pay hundreds of dollars per credit, each of which represents one metric ton of carbon removed. Other carbon credits tied to projects such as keeping trees standing have often been criticized because the projects often don’t reduce emissions as much as promised.

Companies pay a premium, sometimes paying hundreds of times as much as they do for basic credits, for the credits from Climeworks because there is more certainty they remove carbon from the atmosphere. The companies are also willing to pay more to help jump-start the industry, hoping that costs decline rapidly.

“This is an important inflection point in the development of direct-air capture,” said Stacy Kauk, Shopify’s head of sustainability. “It isn’t just science fiction. It’s reality.”

The promise of the technology has prompted established businesses such as Occidental Petroleum Corp. to develop their own direct-air capture strategies.

Climeworks operates one of the world’s only operational direct-air capture plants in Iceland, which is capable of removing about 4,000 metric tons of carbon dioxide a year, roughly equivalent to the annual emissions of about 800 passenger cars. Other removals to this point had been done using methods such as burying carbon-rich plant material underground.

We’ll see if salesmanship is outrunning engineering.

IMO this is a very promising technology for a score of reasons among them being it builds an industry, is scalable, and doesn’t have to be stuck in the Amazon rainforest or sub-Saharan Africa. I can imagine a dozen different ways of structuring the business.

Best of all it would allow us to distinguish between motives, separating those who truly want to reduce the amount of carbon in the atmosphere from those who are just anti-technology or, worse, anti-human.