Last year, a group of Norwegian auditors touched down in a remote corner of Iceland to meet with Climeworks, a Swiss company that built the world’s largest plant of its kind. They weren’t there just to open the books, but to open machines that were doing what none had done before at this scale: remove carbon directly from the air.
For three days, auditors from DNV, a firm that specializes in quality assurance and risk management, interviewed staff, reviewed hundreds of pages of documents and inspected everything from air collector containers to sensors quantifying carbon dioxide levels. Their efforts were part of a mission to figure out if the first facility to capture carbon from the air and store it underground was actually doing what Climeworks claimed.
The results would have profound implications for not just Climeworks, but for the nascent carbon removal industry as a whole. Luckily for the company — and industry as a whole — DNV found Climeworks and its storage partner Carbfix were doing what investors and customers have paid them hundreds of millions to do.
The carbon removal industry is at a turning point, with a growing number of startups promising to do what Climeworks has done. As more and more buyers commit millions of dollars to this still mostly unproven field that BloombergNEF forecasts could grow to a $1 trillion industry in less than two decades, they’re starting to demand proof that companies are delivering on those promises. In a world that will likely need to remove billions of tons of carbon pollution a year from the atmosphere by mid-century to limit global warming to 1.5C, vetting companies’ ability to deliver is also vital for the climate.
In short, the three most important words in carbon removal are monitoring, reporting and verification (MRV), or the process of measuring how much CO2 has actually been removed, reporting the results to a third party and verifying that what was purchased was actually delivered. It’s an incredibly complex process to pull carbon dioxide from the air, and the fate of the climate hinges on getting right.
“Fundamentally, [MRV is] the thing that proves we did what we said we would do,'' said Anu Khan, the deputy director of science and innovation at Carbon180, a carbon removal policy group.
The private and public sector are placing increasing emphasis on MRV. The $100 million XPRIZE Carbon Removal competition, what the group says is the largest incentive prize in history, is requiring finalists to submit to an extensive measurement and verification assessment to be considered for the grand prize. The Department of Energy recently awarded $15 million to national labs focused on advancing MRV best practices and capabilities. Frontier, a major carbon removal buyers club led by Stripe with over $1 billion at its disposal, has also made robust MRV a major component in how it’s evaluating CDR companies applying for funding.
Money is pouring into the space, partly because the stakes are high and partly because good MRV is hard to do. Carbon removal is a mostly invisible process. The market for it is like the Wild West, with no rules or standards governing how services are bought and sold. To further complicate things, scientific and technological uncertainty still abound about how different types of carbon removal actually work.
Every carbon removal technique poses a unique set of MRV challenges. Pulverizing rocks and spreading them over large areas of land can accelerate natural processes that remove CO2 from the atmosphere, for example, yet how the size of rock dust affects the rate of CO2 uptake is still an area of active research.
As the spotlight on carbon removal grows, the shortcomings of and collapse of trust in the carbon offset market are increasingly on the mind of carbon removal founders.
“We need deliveries of actually trustworthy carbon removal, and the way to get there is to be very transparent,” said Peter Reinhardt, the founder of Charm Industrial, a startup that stores carbon in the form of bio-oil it injects underground.
In 2022, Charm collaborated with carbon management firm Carbon Direct and consulting firm EcoEngineers to publish a prototype protocol to help inform MRV standards for the type of carbon removal the startup performs, called bio-oil sequestration. It also started publishing a registry on its website that documents every ton of carbon removed for customers, including a life cycle analysis of each step in the process. While self-regulation and transparency are steps in the right direction, it’s a far cry from independent, outside oversight that the industry will need to truly garner the trust of buyers and the public.
Charm purchases waste biomass that’s pulled CO2 out of the atmosphere and then converts it into bio-oil and sequesters that underground. (The company also purchases bio-oil directly to inject underground.) That biomass can include waste left over in cornfields after harvest, including stalks, leaves and cobs, and trees that are removed to prevent forest fires. Reinhardt said that the hardest part of the MRV process is verifying and documenting the source of the waste biomass to ensure that it’s actually waste and a farmer isn’t, say, cutting down a tree in order to sell it.
“Is it calling the farmer? Is it some sort of random site inspection? Those are details that will get ironed out in a very detailed protocol,” he said.
A growing number of startups focused on providing MRV solutions are popping up to help carbon removal companies measure and monitor their results, as well as help customers hold them accountable. (Even established outside verifiers like DNV are just starting to audit carbon removal.)
One of those startups is Isometric. Eamon Jubbawy founded the company in 2022 and hired a team of scientists headed by former ARPA-E fellow and MIT researcher Elizabeth Troein to help carbon removal companies develop protocols that can help carbon removal buyers ensure they’re getting what they paid for. That includes making sure that their measuring and modeling techniques are scientifically robust. The startup also works with partners to verify individual tons of carbon removal after they’re delivered.
A key differentiator between Isometric and traditional carbon registries like Verra and Gold Standard, the leading standard-setters in the older and more established carbon offset market, is that it charges buyers a single flat fee for its verification services, rather than charging suppliers per credit. That could help avoid the misaligned incentives and over-crediting of projects that have plagued carbon offset markets in the past that newer carbon removal players want to avoid, Jubbawy said. The cost works out to about “a single-digit percentage of the total cost to remove,” he said.
“It’s become abundantly clear that there aren’t that many institutions that are fit for purpose to be a go-to registry for carbon removal,” Jubbawwy said. “And hopefully we can play this central role in the ecosystem using a science-first approach to building confidence with the buyer set.”
Beyond misaligned incentives, the other challenge of doing high-quality MRV is that many of the available tools for doing so are quite antiquated. In soil carbon sequestration, for example, the crux is the measurement piece.
“Soils are living systems,” and even different parts of same field have different organic carbon values, said Chris Tolles, the founder and CEO of Yard Stick. The startup uses a handheld probe with a camera that can measure how much carbon is stored in soil. Tolles claims the technology is both relatively cheap and highly rigorous, and the company has received funding from both ARPA-E and the US Department of Agriculture.
“Risk exists across all methods of carbon removal,” and there are a multitude of ways for suppliers to cut corners, including not fully accounting for the emissions that they’re creating in the process of removing carbon dioxide from the atmosphere, said Peter Minor, a co-founder of Icarus, a startup focused on offering MRV services to carbon removal companies. “The value that carbon removal will create — how much societal value is really being generated — is highly dependent on those assumptions and those estimates and calculations being correct.”
The real risk will come if and when the industry scales to removing millions — and eventually billions — of tons of carbon dioxide.
“Right now, these companies are built by true believers who really care about climate and want to do the right thing. In the future, a lot of this technology’s going to be operated by other parties,” parties that might not have the same incentives and motivations, Minor said. “How do we protect against risks for today and, more importantly, how do we start practicing and building systems that are ready to scale to billions of tons?”