Swiss Re (OTC:SSREY) and UBS are among the five first purchasers of credits from a scheme established by a Swiss company to reduce the cost of removing carbon dioxide from the environment.
Many experts believe that it will be necessary to remove carbon dioxide from the atmosphere by planting forests and employing technology in order to satisfy the Paris climate agreement’s worldwide targets for combating climate change.
The NextGen facility of the Swiss carbon project developer South Pole has committed to purchasing 1 million carbon removal credits from a variety of projects by 2025 in order to safeguard their cash streams and reduce the cost of the technologies.
In an interview with Reuters, South Pole CEO Renat Heuberger stated, “With this, we can begin to move these technologies down the cost curve; hopefully, the price levels you see today will decrease in a manner similar to what we’ve seen with solar PV.”
According to the International Renewable Energy Agency, the cost of solar PV modules for renewable solar power has decreased by around 90 percent since the end of 2009, due to the development of technology and supply chains.
Depending on the nature of the project, the cost of carbon removal technology ranges between $50 and $400 per ton.
Boston Consulting Group, private banking business LGT, shipping giant Mitsui O.S.K. Lines (MOL), Swiss Re, and UBS will be founding buyers in NextGen, according to South Pole, which did not indicate how many credits each company had purchased or at what price.
Numerous businesses have established emission reduction targets that require them to purchase carbon offsets or removal credits to compensate for emissions they are unable to reduce themselves.
Takeshi Hashimoto, President & CEO of Mitsui O.S.K. Lines, Ltd said in a statement, “This initiative is a component of MOL’s larger ambition to achieve net-zero emissions by 2050.”