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International carbon markets for carbon dioxide removal

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Michaelowa, Axel, Honegger, Matthias, Poralla, Matthias, Winkler, Malte, Dalfiume, Sandra, Nayak, Ankita·2023·PLOS Climate
DOI 10.1371/journal.pclm.0000118
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Abstract

International carbon markets are potentially a very powerful tool for mobilizing carbon dioxide removal in line with Paris Agreement ambitions to limit global warming to well below 2°C. This requires reaching global net-zero emissions between 2050 and 2070. Yet, carbon market regulators have not approached removals in a systematic manner. This review assesses the highly fragmented treatment of removals under compliance and voluntary carbon markets, including baseline, credit and cap-and-trade systems. The Kyoto mechanisms and the large voluntary carbon market standards have long focussed on biological removals without inherent storage permanence and only recently started to develop methodologies for removals with geological storage, mineralization or biochar. Driven by high prices for credits from emerging removal technologies and advance market commitment initiatives targeting high permanence removals, various newcomers in voluntary markets are currently establishing their own approaches for generating removal credits. However, they disregard key concepts safeguarding market quality such as additionality, which risks triggering scandals and tainting the entire market for removal credits. Given the diversity of credit prices spanning three orders of magnitude from 1 to 1000, as well as of volumes ranging from a few hundred to tens of millions of credits, the current “gold rush” atmosphere of removal markets needs to quickly be replaced by a coordinated approach, ensuring credibility, and enabling removals to play the required role in reaching global net zero.

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  • Distinguishing between CO2 uptake from industrial emissions or from direct air capture (DAC) is of particular interest for carbon market credibility and regulation, as CO2 pricing depends strongly on the CO2 source and fixation process.

    “As CO2 pricing depends strongly on the CO2 source and the fixation process, distinguishing between CO2 uptake from industrial emissions or from direct air capture (DAC) is of particular interest for carbon market credibility and regulation [17].”

    From Isotope chemistry to trace carbon mineralization in construction materials (2026) · cites this paper as [17]

    In “How to account for CDR in national inventories” (page unavailable), the paper distinguishes CCS at point sources from removals involving atmospheric-origin carbon. “Different market tranches for technologies with different cost levels?” (page unavailable) reports large price differences among removal methods and discusses regulatory market classes. It does not specifically say that pricing depends on the CO2 source and fixation process, or call for distinguishing industrial-emission uptake from DAC uptake for market credibility. (LLM, conf=0.82)

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Cited by

Sorted by citations

Authors
Michaelowa, A., Honegger, M., Poralla, M., Winkler, M., Dalfiume, S., & Nayak, A.
Affiliations
  • University of Zurich (CH)
  • Utrecht University (NL)
Corresponding author
Michaelowa, Axel
ORCID
Venue
PLOS Climate
Publisher
Public Library of Science (PLoS)
Published
2023-05-08
Volume
2
Issue
5
Pages
e0000118
ISSN
2767-3200 (ISSN-L)
DOI
10.1371/journal.pclm.0000118
OpenAlex
W4382491153
Cited by
54
References
5
Citations by year
2026: 17 · 2025: 21 · 2024: 14 · 2023: 2
FWCI
11.02
Type
journal article
Language
en
Open access
Licence
Locations
  • PLOS Climate (publishedVersion, cc-by)
  • Zurich Open Repository and Archive (University of Zurich) (acceptedVersion, cc-by-nc-nd)
  • Utrecht University Repository (Utrecht University) (submittedVersion, other-oa)
  • Zurich Open Repository and Archive (University of Zurich) (submittedVersion, cc-by)
  • Zurich Open Repository and Archive (University of Zurich)
Funders
German Ministry for Research and Education (01LS2108B)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
  • Physical Sciences › Environmental Science › Global and Planetary Change › Forest Management and Policy
  • Physical Sciences › Environmental Science › Global and Planetary Change › Climate Change and Geoengineering
Keywords
carbon dioxide removal, international carbon markets, compliance carbon markets, voluntary carbon markets, carbon credits, emissions trading, Kyoto mechanisms, additionality, carbon credit prices, CO2 geological storage, CO2 mineralization, biochar, advance market commitments, net-zero emissions, Paris Agreement, carbon market regulation

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