By Susanna Twidale
LONDON (Reuters) – The global market for carbon dioxide (CO2) removal credits could reach $100 billion a year between 2030 and 2035, up from $2.7 billion last year if barriers to growth are addressed, a report said. report from management consultancy Oliver Wyman. Thursday.
Worsening climate change and inadequate efforts to reduce emissions have led UN scientists to estimate that billions of tons of carbon must be removed from the atmosphere annually by using nature or technology to achieve global climate goals.
Demand for credits from sectors as diverse as technology and finance, chemicals and aerospace has started to increase, but is not yet high enough to drive the scale of projects experts say are needed, the report shows from Oliver Wyman, the City of London Corporation and the British Carbon Markets Forum.
Total sales of carbon removals were estimated at $2.7 billion in 2023, the report said, but could grow to as much as $100 billion per year by 2030-35.
Barriers to market growth include a lack of universally agreed standards for carbon removal credits and a lack of guidance on how removals can be used to help achieve climate goals.
Based on current growth rates between 2020 and 2023, the market is expected to reach $10 billion per year between 2030 and 2035, the report said.
To grow the market in Britain, the government must include removals in its emissions trading scheme, establish a financial framework to support the market and approve the use of removals within companies’ net zero strategies, the report said.
Globally, $32 billion has been invested in carbon dioxide removal projects to date, including $21 billion in technical solutions such as direct air capture (DAC) projects that suck CO2 from the atmosphere, and $11 billion in nature-based solutions such as planting. trees, the report said.
Critics of the use of carbon removals warn that too much focus on their use could prevent companies from reducing their emissions as much as possible.
