CUR8, a UK-based company dedicated to building the global market for carbon removals, in partnership with UNDO, a UK-founded, world-leading carbon dioxide removal project developer specialising in enhanced rock weathering, British Airways and Standard Chartered have launched a first-of-a-kind financing pilot to help scale up the carbon removals market. Financial solutions of this kind are a crucial step in enabling the carbon removals market to reach the multi-billion-tonne scale required, according to the IPCC, to limit global warming below 1.5 degrees.
Carbon removal is the process of removing carbon dioxide from the atmosphere and storing it safely for multiple decades and ideally centuries. Removals come in a wide range of approaches ranging from storing carbon in trees and soils to capturing carbon dioxide directly from the air and durably storing it underground or through enhanced rock weathering.
The industry is nascent and needs to scale exponentially to support climate targets to achieve net zero emissions. However, funding can be a challenge even for the most promising approaches. While grants and venture capital are generally available during the early stages, traditional banking products needed for scale, such as commercial debt, are harder to come by. CUR8, backed by GV (Google Ventures), specialises in the procurement of high quality carbon removal credits from global suppliers across the technological spectrum, and is now setting out to drive more demand for these credits by: 1) allowing buyers to access carbon removal credits through multi-year purchases; 2) alleviating working capital challenges for suppliers, often a bottleneck to achieving commercial scale. As part of this transaction, British Airways is committing to purchase more than 4,000 tonnes of carbon removal credits delivered by UNDO through enhanced rock weathering, and Standard Chartered is looking to be the banking partner.
This pilot aims to create a blueprint to enable ambitious carbon removal suppliers to scale with more available capital in the form of debt financing, secured on future client demand via advanced purchase agreements. This way, suppliers can move away from relying on bespoke financing structures, meet their working capital needs, and establish a credit history in the process. CUR8 aims to build on this pilot to further develop scale-up financing products for the carbon removals industry.
Carrie Harris, Director of Sustainability at British Airways, said:“At British Airways, carbon removals form a fundamental part of our strategy to reach net zero emissions and so we are delighted to be a part of this groundbreaking pilot. Whilst this initial purchase is relatively small, the partnership hopes to pave the way to unlock future investment in carbon removals and help accelerate the future scale-up of carbon removals technology. This collaboration will reinforce our commitment to achieving net zero by 2050 and is a long-term and necessary solution to act on our carbon emissions.”
Marta Krupinska, CEO & Co-Founder at CUR8 said: “It is clear that rapid technological and scientific innovations require appropriate, novel and abundant financing. We are delighted to be launching this pilot with UNDO, British Airways and Standard Chartered to show that debt financing in addition to venture capital is needed to unlock scalability for carbon removals. We aim to build a bridge to bankability for the most promising carbon removal suppliers who face a $5-50M scale-up financing gap.”
Marisa Drew, Chief Sustainability Officer at Standard Chartered, said “Our commitment to carbon removals recognises their critical importance in the delivery of net zero. As a Bank with a significant presence in many of the emerging markets most impacted by climate change, we are clear that high-integrity carbon markets and related removals activity can accelerate net zero progress when coupled with continued mitigation and adaptation efforts. Given this focus, we’re excited by the opportunity to partner with such mission-aligned counterparties to develop this financing structure in hopes that it will support more providers to scale up and be able to access a greater quantum of capital to remove carbon, at pace.”
Jim Mann, Founder and CEO at UNDO, said: “Our approach represents one of the most robust carbon dioxide removal solutions available today because it is permanent, highly scalable, and provides a host of co-benefits. While flying brings the world closer together, it is difficult to decarbonise. The aviation industry will require large amounts of high-quality carbon removal to meet its net zero commitments, and British Airways is leading the charge. UNDO and the carbon removal market need many more progressive partnerships like this to scale to the IPCC carbon removal goal of 10 billion tonnes a year by 2050.”
