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The following article is a transcription from an original interview published on the German information portal DDW (Die Deutsche Wirtschaft) published here.
Achieving the ambitious goal of a climate-neutral economy will require more than just reducing CO₂ emissions. One solution could be the active removal of CO₂ from the atmosphere. Learn how companies and investors are already taking action.
Not only is political and regulatory pressure increasing, but more and more companies are also committing to sustainability strategies and net-zero targets in response to stakeholders and customers.
In addition to traditional reduction measures along their own value chains, the active removal of emissions from the atmosphere, known as Carbon Dioxide Removal (CDR), is becoming increasingly important.
Why CDR represents the future is explained in a DDW interview with Lucas Zaehringer, CEO of Planet2050, a climate-tech company that develops and finances CO₂ projects worldwide.
Are we facing the wreckage of climate policy? Despite significant sacrifices, especially in the German economy, the path to climate neutrality is apparently not being achieved..
Lucas Zaehringer: Lucas Zaehringer: It is true that traditional measures such as improving energy efficiency, transitioning transportation and waste systems, and protecting natural ecosystems may not be sufficient to limit global warming to 1.5 °C by 2100, as outlined in the Paris Agreement. Even the IPCC, the International Panel on Climate Change, acknowledges this. Ambitious targets like the EU’s goal of climate neutrality by 2050 and Germany’s plan to become CO₂-neutral by 2045 could also be at risk. However, this does not change the validity and necessity of the goal. What must be reconsidered is how it can be achieved.
Where are these new considerations heading?
Both the IPCC, the EU, and the German Federal Climate Protection Act already consider negative greenhouse gas emissions as an additional pathway. In terms of the atmosphere, this means removing more CO₂ than is emitted. The key term is CDR, Carbon Dioxide Removal. There are already numerous projects and innovations in this field today.
What methods are available?
A distinction is made between nature-based and technology-based methods. The former includes measures such as reforestation, organic soil improvement, and the restoration of wetlands and peatlands. Technologically, CO₂ removal can be achieved through various chemical and technical processes, with the carbon then being stored in the ground, rocks, and materials.
Can CDR be concretely utilized by companies?
Many companies have already voluntarily committed to sustainability strategies and net-zero targets. As part of these initiatives, companies are not only encouraged but also obligated to address the issue of unavoidable residual emissions that cannot be eliminated through conventional reduction measures. This is where CDR certificates come into play. These CDR certificates can be purchased from project developers and marketplaces in the voluntary carbon market.
“A real market is emerging here – for project developers, investors, and companies alike; a market in the interest of climate protection.”
What is the difference to the existing certificate trading system?
In the recent past, it was often common to simply offset emissions through certificates for CO₂ avoidance. From a global climate perspective, this is no longer truly acceptable. Genuine climate responsibility means reducing emissions along the entire value chain and additionally investing in high-quality CO₂ removal technologies – in other words, actively removing emissions and securely storing them for centuries.
How developed is the market today?
In 2024 alone, around ten million tons of CDR have already been contractually agreed upon by various stakeholders.
Microsoft, for example, has signed a contract with 1PointFive for 500,000 tons of CDR over the next six years. The CO₂ removal will come from "Stratos," 1PointFive’s first industrial DAC facility currently under construction in Texas.
Equinor has signed a contract with Ørsted to purchase 330,000 tons of CDR over a ten-year period, with certificates coming from the Ørsted Kalundborg CO₂ Hub, which is set to remove 430,000 tons of biogenic CO₂ annually from two Ørsted biomass power plants starting in 2026.
Additionally, reinsurance giant Swiss Re has signed a seven-year contract for 70,000 CDR certificates from Exomad Green’s new biochar plant in Riberalta, Bolivia.
As the market grows, as demonstrated by these large-scale projects, will CDR also become a topic for medium-sized businesses and private investors?
The examples mentioned represent pioneers who are already taking massive action. However, it is true that they are paving the way for a larger wave of followers. More and more companies are realizing that technologies and the market for CDR must be scaled now to ensure sufficient capacities by 2050. A huge future market is emerging.
CDR certificates can already be purchased from project developers and on marketplaces in the voluntary carbon market. According to financial experts and banks, the trade in CO₂ certificates is expected to grow to as much as $250 billion by 2030.
This means a real market is emerging – for project developers, investors, and companies alike – a market in the interest of climate protection. The voluntary carbon market offers the opportunity to invest today in projects and technologies that are crucial to achieving global climate goals and securing a livable future on our planet.
In the foreseeable future, demand for CDR will exceed supply, driving prices up – a key reason for companies to secure offtake agreements early.
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