Market-Ready: How MaRS Facilitates Corporate Transition to Carbon Removal

The urgency of addressing global carbon emissions has intensified as levels continue to rise, underscoring the need for both carbon reduction and large-scale Carbon Dioxide Removal (CDR) technologies. CDR involves various technologies capable of extracting CO2 from the atmosphere and securely storing it for extended periods. This includes direct air capture (DAC), biochar production, and marine alkalinity enhancement. With many of these solutions still under development, the purchase of carbon removal credits by corporations and other organizations plays a vital role in funding and scaling these innovations while enabling buyers to meet their sustainability targets.

Historically, major tech and e-commerce companies like Microsoft, Google, and J.P. Morgan have dominated the carbon credit market, comprising approximately 80% of purchases last year. However, Niyat Gebreab from MaRS notes that the purchasing process can appear daunting to newcomers, emphasizing the importance of education and collaboration in demystifying this emerging market.

To facilitate this understanding, MaRS partnered with M-Lab, a consortium of Japanese firms, creating a six-month program aimed at educating members about carbon credit purchases. This initiative allowed participants to observe real-time transactions, fostering a risk-minimized learning environment. Key insights from this experience provide a foundational understanding of the sector.

A critical distinction exists between carbon capture and carbon removal: the former captures emissions directly from sources like power plants, while the latter extracts CO2 already present in the atmosphere. Currently, nature-based projects primarily dominate carbon removal, yet they are susceptible to climate change impacts, driving a shift towards robust, engineered solutions such as DAC.

The costs for high-quality carbon removal credits typically range from $500 to $1,000 per tonne, although advancements in technology are driving down prices. For instance, a recent collaboration saw Planetary Technologies secure a deal to remove atmospheric carbon at around $371 per tonne. The market for carbon removal solutions is projected to expand significantly, with estimates suggesting a need to remove 10 gigatonnes of CO2 annually by 2050. As net-zero deadlines approach for many companies, the demand for CDR credits may outpace supply by as early as 2030, making timely engagement essential.

However, barriers remain in the market due to foundational challenges. The sector must establish certification standards while scaling technologies, with purchasers seeking assurance that what they pay for is delivered. Addressing the knowledge gap is crucial. MaRS educated M-Lab members on identifying risks and utilizing verification platforms, ensuring confidence in credit purchases.

Corporate motivation for participating in this sector often stems from leadership vision, investor expectations, and corporate responsibility trends. In Japan, supportive initiatives like the J-Credit Scheme have incentivized companies to reduce emissions through certified credits.

To enhance corporate demand, MaRS has initiated a national outreach for carbon removal technologies. Educational programs aim to connect carbon tech innovators with corporate sustainability teams, simplifying the purchasing process. Experts, such as Alexander Rink from CDR.fyi, stress the importance of education in differentiating between avoidance and removal and in recognizing the value of durable solutions.

Canada is positioned to be a leader in durable CDR solutions, with ongoing initiatives and resources that support innovation. With an increasing number of organizations engaged in carbon removal and supportive federal policies, the nation’s potential to attract global suppliers is promising.

Business leaders are advised to leverage existing resources, join educational programs, and collaborate with established buyer groups to effectively navigate this evolving market. By doing so, they contribute to significant positive impacts on planetary health and propel the sector forward.