Standard Chartered, SEB to Offer Clients Carbon Credits from Early-Stage Carbon Removal Projects
UK-based Standard Chartered and Northern European financial services company SEB announceda partnership with carbon crediting platform Puro.Earth, under which the banks will begin to offer clients carbon removal offtake agreements from Puro-certified early-stage carbon dioxide removal (CDR) projects, and aimed at channeling capital to suppliers to help scale the CDR market.
According to the landmark Intergovernmental Panel on Climate Change (IPCC), scenarios that limit warming to 1.5°C include carbon dioxide removal methods scaling to billions of tons of removal annually over the coming decades. The report also noted, however, that while there are multiple existing solutions to capture and store CO2, most are early stage and currently limited in scale. Access to capital for the early stage projects is a key barrier facing many developers.
Puro.earth, acquired in 2021 by Nasdaq, provides a marketplace, standard and registry platform focused on carbon removal, bringing together suppliers of carbon net-negative technologies and companies looking to reduce or counter their carbon footprints, through the issue of verified CO2 Removal Certificates (CORCs), using the “Puro Standard” carbon credit methodology that requires removal of CO2 from the atmosphere for at least 100 years.
Fredrik Ekström, Head of Carbon Markets at Nasdaq, and Chairman of Puro.earth, said:
“To scale up capacity in carbon removal we need allocation of capital into projects aiming to deliver negative emissions. Offtake agreements play a crucial role at this stage of the market development to support funding and demand signaling. The partnership between Puro.earth, SEB and Standard Chartered represents an important step to support increased investments into early-stage carbon removal projects.”
Under the new partnership, the banks will act as intermediaries facilitating offtake agreements of Puro Standard-certified carbon removal credits to their clients. According to the companies, the collaboration aims to help address challenges facing the CDR market, including the bankability of projects, and offtake contract structures, with a view to supporting investments in the sector, while also increasing liquidity and CORC supply.
Maximilian Brodin, Head of Commodities, at SEB, said:
“The carbon dioxide removal market needs to scale to address the ongoing climate crisis. The partnership with Puro will support SEB in our strive to equip our clients with the necessary tools they need to deliver on their net-zero targets.”
The new collaboration follows the announcement earlier this month by Standard Chartered of a new debt financing transaction for carbon removal project developer UNDO, through an innovative new transaction structure also aimed at enabling the scaling of finance for Carbon Dioxide Removal (CDR) projects.
Chris Leeds, Head, Carbon Market Development, at Standard Chartered, said:
“We need every tool in the toolbox to help accelerate efforts to achieve net zero. Investment in emissions reductions and avoidance beyond company value chains are crucial but we also need to invest in carbon dioxide removal technology today, that will scale tomorrow, and put the net in netzero.