Carbon removal market poised for explosive growth with proper support, report finds
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A report by management consultancy Oliver Wyman reveals that if barriers to growth are addressed, the global market for CO2 removal credits could reach up to $100 billion a year between 2030 and 2035, up from $2.7 billion last year.
Worsening climate change and insufficient emission reduction efforts have prompted UN scientists to estimate that billions of tons of carbon must be removed from the atmosphere each year, using natural or technological methods, to achieve global climate goals.
The report says that the demand for credits has grown across various sectors, including technology, finance, chemicals, and aviation. However, it is still insufficient to drive the scale of projects experts deem necessary.
Barriers to expanding the market include the absence of universally accepted standards for CO2 removal credits and the need for clear guidance on how removals can contribute to achieving climate targets.
The report stated that to develop the market in Britain, the government should incorporate removals into its emissions trading system, establish a financial framework to support the market and endorse the use of removals within the company’s Net-Zero strategies.
Read more: Report highlights impact of $100 billion carbon market over the next decade
It added that $32 billion has been invested globally in carbon dioxide removal projects. Of this, $21 billion has been directed towards engineered solutions like direct air capture (DAC) projects that extract CO2 from the atmosphere. In comparison, $11 billion has been invested in nature-based solutions such as tree planting.
Critics caution that an overreliance on carbon removals might discourage companies from making maximum efforts to reduce their emissions.
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