Swiss Re has become one of the founding buyers of credits from a new Swiss company aiming to reduce the cost of atmospheric carbon removal, according to reports from Reuters.
The reinsurer joins banking giant UBS, Boston Consulting Group, private banking firm LGT, and shipping company Mitsui O.S.K. Lines in buying into carbon project developer South Pole’s NextGen facility,
Via the facility, South Pole has committed to buying 1 million carbon removal credits from a range of projects by 2025.
By investing into these projects, the company says it can guarantee secure revenue streams and help to keep the cost of developing carbon removal technologies as low as possible.
“With this we can start moving these technologies down the cost curve, ideally the price levels you see today will come down in a similar way to what we have seen with solar PV,” South Pole CEO Renat Heuberger told Reuters in an interview.
Supporting the carbon removal industry has formed part of Swiss Re’s climate policy for some time now as a way to “compensate any emissions we cannot yet avoid.”
Carbon removal involves a set of technologies or practices that result in negative emissions, by taking CO2 back from the atmosphere and storing it permanently.
The list of carbon removal methods ranges from nature-based solutions such as afforestation or soil carbon sequestration, to technical solutions such as direct air capture or mineralisation.
But while the cost of such projects has reduced significantly in recent years, they typically remain extremely pricey, with Reuters noting that costs can range from around $50 to $400 per ton of carbon removed from the atmosphere, depending on the method used.
As part of its CO2NetZero Programme, Swiss Re notes that “the carbon removal industry is still at a very early stage,” meaning “the higher compensation cost provides the perfect incentive to reduce as much of our emissions as possible in the first place.”
The reinsurers adds: “For the world to be at net-zero emissions by 2050, climate scientists predict a need for billions of tonnes of negative emissions. Swiss Re’s early engagement will help the nascent carbon removal industry to develop on time and deploy its solutions at scale.”