A report by the consulting firm Oliver Wyman calculates the possible development trajectory of the carbon removal credit market with and without the removal of the barriers that currently hinder it. Without policy intervention, growth will be 10 times lower
Today credits on carbon removals have an annual volume of $2.7 billion
Within 10 years, the global carbon credits market will grow almost 40-fold. As long as politics addresses the barriers that limit its development today. The volume of carbon removals trading can go from the current $2.7 billion to about $100 billion by 2030-2035, according to a report by consulting firm Oliver Wyman.
Carbon removals, what are the barriers to the market?
But without any intervention, the trajectory will be much flatter. The report estimates that without internationally shared standards on carbon removals credits, and in the absence of clear guidance on the role they can play in supporting climate policies, in the next decade the market will travel on volumes 10 times less than the real potential: about 10 billion dollars a year.
Another critical aspect is the volume of investment in carbon dioxide removal (CDR) solutions. In all, globally, they reach 32 billion dollars. Of these, about 2/3 (21 billion) are directed towards projects that promote technological solutions, such as direct air capture of CO2 (DAC). The remaining 11 billion goes towards nature-based solutions that focus on restoring degraded ecosystems.
Is the CDR necessary?
The IPCC also makes it clear that the use of carbon removals is now necessary in order to achieve global warming targets. The latest report, published in 2022, included CDR solutions in all emissive scenarios. But he stressed the importance of moving towards the more ambitious ones, with more drastic cuts and in a short time: only in this way, summed up the Intergovernmental Panel on Climate Change, we can limit the use of carbon removals.
A road considered preferable for the immaturity of technologies: even the most run-in are not easily deployable on a large scale. Hoping to have them in 10 or 20 years’ time risks slowing down the emission cuts that originated today, and bringing us dangerously close to missing the climate targets.
The issue is much discussed, as demonstrated by the controversy that arose last year when the UNFCCC, in the address document for the Cop28 in Dubai, argued that DACs, BECCS and other solutions such as enhanced weathering are false solutions not to rely on. A recent report by the University of Oxford has calculated that, to meet the 1.5 ºC threshold, the global capacity for carbon removals – natural and artificial – must quadruple by 2050, reaching 7-9 billion tons of CO2.
