New York Climate Week 2023 Wrapped

  1. Why so voluntary carbon market?Why label it ‘voluntary’? Are we undermining the carbon market? Emphasizing unintended optionality from the start, it seems haphazard. You don’t buy shoes in a ‘voluntary’ shoe shop; it’s just a shop. Why not just call it the carbon market? It resonated with us at CUR8 – what do you think?
  2. Where will the money come from?“Catalytic capital”  and “First of a Kind Financing” were the buzzwords of the moment at this year’s NYCW — as the carbon community zoomed in on the financing challenge of scaling capital-intensive climate technologies. While this is a huge challenge for the market, we’re encouraged to see it take centre stage. As long as risks outweigh returns and funding gaps exist, catalytic capital, market transparency and risk management are key to unlocking institutional investment.
  3. The second cavalry – going beyond the early adoptersThere has been so much buzz around carbon removals that many people seem to think the carbon removal market is already vast. But in reality it is still tiny.

How do we get more supply? By getting more capital in the hands of the suppliers. And though there have been well-publicised early-movers both investing and buying removals, the critical secondary cavalry – the second wave of entrants – will form the blueprint for this market to scale. The next 12-24 months are perhaps the most crucial of all to prove our ability to get carbon removals onto the exponential growth curve at the pace that the planet needs.

  1. Speaking of buyers, long-term offtakes are the instrument of the momentThe consensus among both suppliers and financers is that when it comes to releasing capital to deserving project developers, long-term offtakes are key. To make the projects bankable, offtakes need to be at least 5-years long, with limited or no break clauses, and with a very creditworthy purchaser. Such offtakes are now in scarce supply – how we make them the norm will be occupying all our brains in the months ahead.
  2. Building trust beyond and Climeworks made an announcement last week that Climeworks will use Puro to certify their DAC credits. It was a meaningful moment for the industry and pointed to the fact that even the most advanced suppliers who were able to sell to the most reputable buyers see the need for third-party verification and standards.
  3. 1+1=11: portfolios and coalitionsCUR8’s first ever product was a portfolio of carbon removals, so we’re clearly sold on the idea. What seemed to be new at this year’s NYCW was that the whole community unified around the portfolio approach, with suppliers even teaming up with each other to co-sell. The demand flipside is yet more buyers teaming up into buyers collectives to reduce perceived reputational risk and raise more money for removals.
  4. Global southThere is a huge opportunity to support carbon removals in global south projects in particular Biochar and Direct Air Capture. Last Month’s Africa Climate Summit showcased the brilliant opportunities for African carbon removal projects and from the event we spoke at in Goals house, we were delighted to learn that the same thing happening in Brazil (who will host the G20 next year and COP30 the year after)

Advanced climate technology is no longer just the purview of the global north and it’s exciting to see what’s to come, including Climeworks announcing their exciting new partnership with our friends Africa Climate Ventures to build DAC projects capable of removing up to 1M tons of CO2 in Kenya’s Great Rift Valley.

  1. IRA and European Green DealThe Inflation Reduction Act (IRA) was part of nearly every discussion, and subject to much envy of carbon communities from outside the US. The massive investment by the Department of Energy to forge public-private partnerships to advance climate tech and carbon removals towards commercial scale inspired many to consider beyond climate regulation. More wind was put in the figurative US sails by the CFTC’s announcement to promote market integrity and the  development of standards.
  2. We need to incentivise action now (2023-2030)The new BCG report estimates an annual demand of ~40–200 Mega Tonnes (Mt) CO2 of high-quality carbon removals in 2030, translating into a ~$10 billion–$40 billion market opportunity by 2030. This is a hugely exciting number – but what needs to happen between now and 2030 to make it a reality? From pricing risk, developing technologies at scale, sourcing talent and securing presently non-existent budgets, we have a lot of work NOW to develop carbon removals to the tune of 10 billion tonnes a year we’ll need by 2050.
  3. Innovation in actionMany people in New York were looking towards COP28, with nervousness as well as anticipation. We were delighted to speak on the “The Global Stocktake: Enabling Real Action at COP28” panel at the COP28 – Climate Action Stakeholder Launch Event last week. An event highlighting the Climate Action Innovation Zone, which will host a wide range of thinkers and doers in COP28 in Dubai, along with an “Island of Hope”. In these fractured times it will be more important than ever to find innovative solutions to the challenges we all now face.

Would you like to get involved and turn talk into action? Speak to CUR8 today