Mitsubishi aims to drive down the price of carbon capture tech with new partnership
Japanese automaker Mitsubishi has partnered with Swiss firm South Pole to develop a “purchase facility” to buy carbon removal credits, with the ultimate aim of driving down the price of carbon capture technologies.
Mitsubishi and South Pole aim to procure at least $300-800m (£215-575m) worth of certified carbon removal credits by 2030 by purchasing them from upcoming carbon removal technology projects in order to giving them a secure revenue stream to accelerate their development.
While drastic decarbonisation efforts in power, transport and industry are needed for the world to stick to Paris Agreement goals, carbon capture is increasingly considered necessary in order to remove the excess carbon that has already been released into the atmosphere.
The International Energy Agency has called for greater investment, saying that the amount of CO2 captured must rise dramatically to 800 million tonnes in 2030 from around 40 million tonnes today.
Carbon capture can be achieved through both nature-based solutions - such as planting trees - as well as technological carbon removal such as Direct Air Capture (DAC), in combination with permanent CO2 storage.
The cost of technological carbon removals today range from around $50 to over $400 per ton of CO2 removed. South Pole said these costs are above the current price levels of most carbon pricing schemes around the world that should incentivise the development of new removal solutions.
The 'Next Generation Carbon Removal Purchase Facility' attempts to address the need to lower costs by supporting technological carbon removal projects through the purchase of certified carbon removals over a period of 10 years or more.
Over the past 18 months, an increasing number of businesses with ambitious net zero targets have shown a higher willingness to pay for high quality technological carbon removals.
In March of this year, for example, e-commerce giant Shopify became the first customer to buy contract carbon removal units from Canada-based direct air capture company Carbon Engineering.
It agreed to purchase 10,000 tonnes of removal from the firm, adding to a previous 5,000 tonne commitment to Climeworks. This pull from the voluntary market can make a crucial contribution to the development of a new carbon removal sector.
“The Next Generation Carbon Removal Purchase Facility will provide a secure revenue stream for new carbon removal technologies to accelerate their development. Importantly, it will help drive down the price per ton of CO2 removed over time,” said Patrick Burgi, co-founder of South Pole.
“By purchasing certified removal credits from our new facility, companies with net zero commitments can diversify their carbon removal portfolios and create enabling environments for technological carbon removal solutions at scale. In this sense, voluntary carbon markets can support the Paris Agreement goals while bringing down the cost of net zero compliance globally – for companies, countries and the planet.”
Masao Koyama, a manager at Mitsubishi’s Low Carbon Task Force said: “We intend to help a range of stakeholders - from carbon removal project owners to carbon removal credit buyers - gain access to the opportunities provided by the new facility.”
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