The road to a mature carbon removal industry has been uphill. Because carbon removal doesn’t create a product with inherent market value, it’s better suited to be a public good than a tradable commodity. Not only does the federal government have a heavy purse, it’s also positioned to set and enforce universal, robust standards for the entire field. However, as the federal government finds its footing as a major procurer, private companies have also lined up to purchase carbon credits on voluntary carbon markets (VCMs).
While exchanges on VCMs have buoyed the CDR sector to date, in the pursuit of gigaton scale, they’re a tool of limited use. As a fledgling industry, carbon removal is still developing shared standards for measuring, reporting, and verification (MRV). That makes it hard to ensure consistency on what “one ton removed” means across CDR suppliers, pathways, and geographies — which has led to wobbly confidence in carbon markets, for good reason. Such unpredictability has hampered VCMs’ ability to take form as a trustworthy and effective means for targeting emissions — which in turn undermines carbon removal’s ability to scale.
Federal policy remains the most powerful lever for defining and boosting the carbon removal sector, and recently the government has become increasingly hands-on. As an experienced market shaper, the government can use its considerable resources to address growing pains, align the industry around shared standards, and direct us toward high-integrity CDR. Last week, multiple agencies announced efforts that help us hone a shared definition of what “high integrity” means for the field. The trio included:
- A set of principles for voluntary carbon markets, released jointly by the White House and the Energy, Agriculture, and Treasury Departments. As DOE induces new demand for CDR (through efforts like the Voluntary Carbon Dioxide Removal Purchasing Challenge), these guardrails aim to help create a high-integrity market — one where buyers and sellers can be certain that one ton removed is truly one ton, across the board. The principles prioritize matters of additionality, public disclosure, validation from independent third parties, and avoidance of social and environmental harms. They also encourage companies to first look at reducing emissions in their own value chains.
- A request for information on the Growing Climate Solutions Act’s (GCSA) core program, which USDA is establishing to connect producers with qualified technical assistance providers and third party verifiers. These experts will work with producers to achieve credible carbon credits, which allows the USDA to share critical information and reduces barriers to entry for producers to participate in carbon markets. MRV for land-based removals is famously tricky, and USDA is still fine-tuning what criteria to apply to this GCSA program. The RFI calls for feedback on how protocols for acceptable credits should be applied and by whom (i.e. who is qualified to be a verifier or technical assistance provider).
- A list of 24 semifinalists for DOE’s $35 million pilot purchasing prize, which gives us a snapshot of how the agency defines high-quality removals. While the pilot is a foray into federal procurement, these selections send a bright signal to the private sector on what type of projects constitute quality carbon removal. DOE’s choices as a carbon removal buyer can set a template for private players, such as Google, and reinforce strong standards for transparency, community engagement, and more.
This level of cross-agency coordination to establish a high bar for carbon removal — and create alignment across mostly unruly carbon markets — is a promising start. As Secretary Jennifer Granholm said at the announcement event, “Credibility is literally the commodity.” We look forward to seeing the sector grow as the federal government leans further into its role as a primary buyer and shaper of carbon removal.
Edited by Tracy Yu. Image by Anna Fleur.
