Key Takeaways

• Carbon removal initiatives present varying tradeoffs and levels of maturity. These factors shape how companies assess such initiatives’ suitability for emissions reduction and reporting strategies.
• Scaling emerging carbon dioxide removal (CDR) technologies requires addressing substantial costs and risks for various stakeholders, including suppliers, project developers, and investors.
• After prioritizing decarbonization efforts, carbon removal projects with durable storage have the potential to mitigate hard-to-remove residual emissions.

Concerns about climate change have prompted the development of methods to address greenhouse gas (GHG) emissions. One method, carbon removal, carries the potential for significant long-term decarbonization but also the prospect of high costs and uncertain impacts. This article reviews different forms of carbon removal and the opportunities and risks they present.

Carbon Removal vs. Carbon Offsets vs. Energy Attribute Certificates

Three broad categories of method for addressing GHG emissions are carbon removal, carbon offsets, and Energy Attribute Certificates.  

Carbon removal, also known as carbon dioxide removal (CDR), refers to human activities that actively remove CO₂ from the atmosphere and store the CO₂ permanently in natural or technology-based carbon sinks. CDR methods are part of the broader category of negative emissions technologies (NETs), which involve removing GHGs from the atmosphere.

CDR is not a substitute for mitigation and immediate decarbonization efforts, but it may be important in achieving Net Zero CO₂ targets. As of 2024, CDR projects comprise about 4% of the credits on the voluntary carbon market.

Carbon offsets refer to actions that a) reduce emissions (known as carbon reduction) and b) prevent future emissions from occurring (known as carbon avoidance). Renewable energy projects (wind farms, solar parks) and energy-efficient technologies such as improved cookstoves are examples of carbon offset projects. Some nature-based carbon removals (e.g., avoiding deforestation, afforestation) are treated as both CDR and carbon offsets.

Unlike CDR, carbon offsets only reduce or avoid emissions and do not directly take CO₂ out of the atmosphere. Climate-focused groups in the private and nonprofit sectors argue that complementing carbon offsetting with carbon removal can contribute to long-term climate stabilization.  

Energy Attribute Certificates (EACs) are a tool for organizations that specifically aim to address emissions from purchased electricity. Each EAC represents the renewable attribute of a unit of electricity, typically one megawatt-hour generated from renewable energy generators such as wind or solar farms. Each EAC thus represents a unit of renewable energy generated and supplied to the grid. Organizations may purchase EACs to compensate for their emissions, to achieve an energy use goal such as sourcing 100% renewable electricity, or to signal to the market demand for more renewable energy projects.

Impacts and Challenges

The different types of carbon removal have varying tradeoffs and levels of development. Conventional CDR methods such as forest management, coastal wetland restoration, and soil carbon sequestration are generally well established and ready to be deployed at scale and have widely deployed methods.

Other methods, such as bioenergy with carbon capture and storage (BECCS), direct air capture and storage (DACCS), and ocean-based technologies, are referred to as novel CDR, which are broadly in earlier stages of development (low-to-medium readiness levels) and not yet operational at scale. However, they are methods considered to have durable storage (centuries to over 10 millennia) and low risk of reversal, with the possibility that CO₂ will likely be stored permanently.

Novel CDR methods generally have higher costs compared to the conventional methods (Table 1 provides an overview of both types of method). However, some methods have limited data on their costs and sustainable potential.

Table 1: Comparison of Nature-Based and Technology-Based CDR Methods

Type of Project	CDR Method
Artificial ocean upwelling*	Pumping or other artificial methods are used to transport nutrient-rich deep ocean water to the sea surface to increase phytoplankton growth and carbon absorption. The absorbed carbon is stored long-term with the dead biomass that sinks to the ocean floor.
Reforestation and afforestation	Trees are planted in non-forested areas (afforestation) and degraded forests are restored (reforestation) to enhance carbon absorption and storage.
Blue carbon management	Mangrove, peatland, and coastal wetland systems are improved to increase CO2 stored in ocean sediment and biomass.
Biochar and bio-oil*	Plant matter is heated in an oxygen-limited environment and added to the soil, enhancing CO2 storage in soil. Oil is also made by biomass conversion and placed into geological storage.
Ocean alkalinity enhancement*	Minerals or alkaline solutions are added to the ocean to increase the alkalinity of the water and thus increase ocean CO2 uptake.
Bioenergy with carbon capture and storage (BECCS)*	Technology captures CO2 from the use of biomass for energy generation and other activities and permanently stores it in geological formations such as natural gas reservoirs, depleted oil reserves, or rock formations under the sea.
Ocean fertilization*	Nutrients are added to ocean waters to increase phytoplankton growth and enhance CO2 uptake from the atmosphere. Biomass must reach the deep ocean to be stored permanently.
Enhanced weathering*	Silicate rock particles are applied to the soil to accelerate the natural process of weathering (which usually takes millions of years), resulting in an increased amount of CO2 captured from the atmosphere.
Direct air capture and carbon storage (DACCS)*	Technology captures CO2 from ambient air and then stores it in geological reservoirs or converts it into durable products.

* Novel CDR method 
Source: BeZero; IATA

The last decade has seen growth in investments from the public and private sector in CDR startups. During the last few years, most funding came from private sources and focused on DACCS, biochar methods, and forestry-based CDR technologies.

In comparison, conventional CDR methods such as forest, cropland, and grassland management are expected to have their costs increase by at least 20% because of limited land resources.

CDR methods with higher permanence or long-lasting emissions reduction removals (greater than 1,000 years) range from US$50-1,000 per ton of CO₂. Nature-based removal methods are generally less expensive, averaging US$10-250 per ton CO₂.

Nature-based methods categorized as carbon offset credits are more economical than CDR methods: they average US$5.30 per ton of CO₂. In 2023-2024, renewable energy offset credits averaged US$2.67, and household/community device projects (e.g., cookstove distribution and water purification) averaged US$7.30 per ton of CO₂.

Over the next decades, the costs of novel CDR methods are projected to decrease at least 30%.

Factors to Consider in Choosing Carbon Removal Projects

Numerous CDR projects, with a range of costs, are available. The cost depends on project type, certification, region, and co-benefits.

Beyond cost, other factors to consider include the following:

• Project quality: A project receives a higher quality rating when it has reputable third-party verification and aligns with certification standards.
• Additionality: A project achieves additionality when carbon removal would not have occurred if a removal project had not been implemented.
• Durability: The longer or more permanent the carbon removal, the higher the durability of the project.

Controversies

Carbon credits remain a popular option for companies to offset their emissions to meet climate commitments. Carbon offset and carbon removal projects generate carbon credits by following specific methodologies to calculate their emissions impact. Such credits go through further validation and verification before companies can purchase and retire these as part of their climate commitments.

However, a series of carbon offset initiatives were criticized for greenwashing. Issues include double counting, overestimated baselines, and no additional emission reductions. Some companies also operated illegally by occupying public lands and displacing indigenous communities.

Conventional CDR methods such as afforestation, reforestation, and soil carbon sequestration continue to face challenges in measurement, reporting, and verification (MRV), which lead to estimation uncertainties for carbon that is removed and permanently stored. Novel CDR methods, including ocean alkalinity enhancement and enhanced weathering, face similar challenges. These uncertainties can undermine CDR projects’ integrity and result in inaccurate reporting, double counting, and greenwashing claims.

Given these concerns, a harmonized verification mechanism is necessary to promote high-quality carbon credits. Using a contribution-based approach also promotes carbon market integrity. Moving forward, measures such as improved verification and a contribution-based approach could help the global focus shift to investing in credible CDR projects that deliver measurable and permanent decarbonization. However, while CDR methods offer promising emission mitigation potential, concerns remain about their effectiveness, scalability, and possible unintended consequences.

Scaling emerging technologies such as novel CDR methods requires overcoming various costs and risks. As mentioned earlier, the capital and operating costs per ton of carbon removed are incredibly high for novel CDR methods, raising questions about the viability of developing large-scale carbon removal projects. Further costs and assessments are needed to prevent and manage any leakage of removed CO₂ from a removal site and to transport the CO₂ through pipelines to permanent storage.  

In addition, the environmental impacts of large-scale CDR—particularly on marine ecosystems—have not been fully studied. An increased demand for energy, water, land, and biomass could compete with other sector needs and potentially conflict with food security and biodiversity goals. Understanding these risks and challenges is critical for companies considering CDR projects.

Conclusion

Both carbon offsets and carbon removal present advantages and disadvantages. On the carbon removal side, technology-based projects present significant long-term carbon mitigation potential and represent a possibly more impactful approach to achieving decarbonization goals.

However, new carbon removal options remain costly and technologies are still nascent. Carbon credits from afforestation and reforestation projects, while more affordable, require careful oversight due to measurement, reporting, and verification (MRV) concerns in the voluntary carbon market. Future industry developments and pricing trends over the next few years may provide a better sense of carbon removal’s potential.