In a market for negative emissions, we will meet customers who want to buy permanent carbon removals to reach net-zero.
To limit global warming in line with the Paris Agreement, we must vigorously and swiftly reduce greenhouse gas emissions. This is the foundation for success, but there are emissions that are very difficult or expensive to eliminate. For example, emissions from aviation or the fossil emissions from some industrial processes, such as certain chemicals in pharmaceutical production or residual emissions from cement production. These emissions are classified as so-called residual emissions, and for the world to achieve climate neutrality, they need to be compensated through permanent negative emissions – meaning the permanent removal of the same amount of carbon dioxide from the atmosphere.
Permanent removals are a tool that stakeholders who want to neutralize their hard-to-abate emissions can use to achieve their net-zero goals.
Image above: The market for permanent negative emissions.
Once Stockholm Exergi has established a large-scale BECCS (Bio-Energy Carbon Capture and Storage) facility, we will capture and store biogenic carbon dioxide, thus being able to offer permanent negative emissions. Similar to how we currently sell district heating and district cooling, in the future, we will offer permanent carbon removals to our current energy customers and new customers on a voluntary market for climate actions. The permanent carbon removals will be sold both in combination with district heating and as a stand-alone product that can be purchased on an international voluntary market in the form of Carbon Removal Certificates (CRCs). Each CRC represents one ton (netto) of carbon dioxide (after taking into account the emissions generated in the value chain) removed from the atmosphere.
Stockholm Exergi’s offer of permanent carbon removals is primarily aimed at companies who voluntarily have set ambitious climate goals for their operations. These goals are usually in line with the Science Based Targets Initiative (SBTi) – a method for companies to ensure a scientific approach to their climate goals, in line with the Paris Agreement. With the help of SBTi, companies establish both short- and long-term goals for reducing their emissions, but also for a implementation of permanent negative emissions – to achieve Net Zero. The idea is not to use permanent carbon removals as a solution to continue emitting carbon dioxide that can be reduced at reasonable cost, but to use them in combination with emission reductions to neutralize the residual emissions. This emission residual does not necessarily constitute only a company’s own direct emissions. The residual emissions can also include the carbon footprint from purchased energy or services within the company’s operations, or other services in the value chain – meaning indirect emissions from the company’s suppliers and customers.
The buyer of permanent carbon removals is the one also entitled to claim them. This means that Stockholm Exergi will not be claiming permanent carbon removals that we have produced and then sold as CRCs to reach our climate targets.
Thus, it is the customers that purchased the CRC that will record and use them to voluntarily neutralize their residual emissions, regardless of where in the world their customers are located. Only one stakeholder can claim each CRC; however, the permanent carbon removals can simultaneously be aggregated by the Swedish nation when calculating how much negative emissions have been produced inside the country’s borders, for national accounting and reporting to the UN.
Note that because it is a voluntary corporate purchase that does not take place as a requirement under a country’s climate targets, it will not be counted in any country other than where it is produced.
The Swedish nation has favorable conditions for Bio-Energy Carbon Capture and Storage. Therefore permanent carbon removals have the potential to become a new Swedish export industry. The total potential is approximately 30 million tons, which is well over the 10 million tons of carbon dioxide expected to be needed to reach Sweden’s climate target. This means that Sweden can produce and export up to 20 million tons of permanent carbon removals per year to countries that need to counteract their residual emissions with carbon removals, but lack Sweden’s favorable conditions to produce them.