It’s time to get serious about decarbonizing

How do we expand the market for this if only 5% of offsets actually eliminate carbon?

The main challenge is that carbon removal is still in a very early stage and is expensive. The average removal offset is $200 per ton. But the average avoided emissions offset is about $5 per ton.

As a result, we face pressing scale and pricing challenges in carbon removal. But supply is low because demand is not guaranteed, and demand is not guaranteed because pricing and supply are uncertain. So we do need buyers to make a commitment today to help build capacity on the supply side. As they do this, the cost curve falls and more industries will come into play. If we don’t have buyers today, we won’t have billion-scale production capacity by 2050.

What we’re trying to do is very similar to a renewable energy power purchase agreement, where, for example, Google commits to buying renewable energy from an electricity supplier, and the electricity supplier can then use that guaranteed revenue to fund renewable energy construction. How much scale is required for carbon removal.

You mentioned Google here, what kind of companies are potential early buyers of carbon removal?

At Supercritical, we are happy to work with any industry. But in heavier, dirtier industries — such as steel manufacturing — the price per ton of carbon removed is very high. For them, it’s better to find ways to reduce emissions internally – change suppliers, change your processes.

In fact, the companies that are most likely to buy right now are asset-light companies—software companies, financial institutions, consultants, law firms—because cleanup costs are high and because these companies’ greatest impact on their overall emissions is through purchasing Carbon removal.

If you look at a typical tech company like Tide or Stripe or Shopify, what they need to do to reduce emissions is largely just limiting corporate emissions and then offsetting their supply chain — Google Ads, Facebook Ads, Amazon AWS . The best use of their budgets is to buy offsets and help the supply side of carbon removals scale.

How to calculate a business’s carbon footprint?

In my previous job, I was tasked with getting my company to net-zero emissions. I talk to a lot of consultants who ask us for such long tail data. Things like how much wastewater we use, how much recycling we produce – things that don’t really matter.

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