Mitsubishi Corporation has entered an agreement with carbon credit company South Pole. Through a joint project, it will generate and sell carbon credits created through removal technologies such as Carbon Capture Utilisation and Storage (CCUS).
Across the world, companies are recognising the need to introduce cleaner business practices and products into their respective markets. However, addressing future outputs will not alter past emissions. Furthermore, nature-based solutions, like the planting of trees, will not be sufficient to remove the required billions of tons of CO2 per year in a few short decades. That is why carmakers like Mitsubishi are turning to removal technology which promises to help turn the tide on pollutants already in the atmosphere.
Carbon crunch time
To achieve the goals laid out in the Paris Agreement and keep global warming within 1.5 degrees Celsius, Mitsubishi acknowledges the need to both reduce CO2 emissions and introduce removal capabilities like CCUS. This technology enables the capture, storage and effective use of the carbon dioxide already emitted into the atmosphere.
However, the levels of required innovation and investment for these systems are still high and must be addressed prior to large-scale implementation. According to South Pole, the cost of technological carbon removal ranges from $50 (€41) to over $400 per ton of CO2 removed. This is where Mitsubishi and South Pole’s new project comes into the picture. It aims to solve these issues by developing and selling carbon credits for carbon-removal technologies. The companies hope this will provide a new source of revenue through the sale to both suppliers and users of credits.
Mitsubishi has been working on a number of projects within the field of CO2 mineralisation and by utilising its network and know-how will determine the feasibility of commercialisation with South Pole by the end of the year. Through this work, the carmaker hopes to contribute to global decarbonisation efforts, by creating a carbon-credit cycle that promotes the development and use of removal technologies.
$300-800 million in credits
South Pole recently unveiled the potential earning power of this technology. Together with Mitsubishi, it announced the development of ‘the next-generation carbon removal purchase facility,’ which aims to produce at least $300-800 million in certified removal credits by 2030. This revenue can then be used by the likes of South Pole and Mitsubishi to fund the next level of carbon removal systems like Direct Air Capture (DAC).
‘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 and director of innovation at 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,’ Burgi added.