Swiss Re has agreed to purchase at least 70,000 metric tons of biochar carbon removal credits from Carbonfuture over a seven-year period, the companies announced Thursday.

The credits will derive from Exomad Green's biochar project in Riberalta, Bolivia. Swiss Re has the option to purchase additional removal credits from other projects, Carbonfuture said in a statement.

Financial details of the deal weren't disclosed.

Carbonfuture Chief Growth Officer Dominic Lüdin told OPIS it was the second-largest deal he was aware of, and it was also notable for its length.

"This is good for all sides," Lüdin continued. "It reduces transaction costs and the project can really work with the revenue and scale operations further."

The agreement with Carbonfuture helps serve Swiss Re's strategy, according to Environmental Management Specialist Tom Spencer.

"Partnering with Carbonfuture allows Swiss Re to secure a reliable, long-term supply of high-quality carbon removal credits that will aid us in increasing the proportion of carbon removal in our compensation mix to 100% by 2030," Spencer said in a statement. "Carbonfuture's robust MRV+ system supports the transparency and quality we need to trust the impact of our carbon removal investments."

Zurich-based insurance provider Swiss Re set an internal carbon price at $100/mt in 2021 and plans to increase it to $200/mt by 2030, following guidance from the UN Global Compact. The levy was set at $123/mt last year, according to the company's latest sustainability report.

In 2023, Swiss Re "continued to use the proceeds from the levy to compensate our remaining operational emissions in scope either through high-quality carbon avoidance or carbon removal certificates," according to the report.

"In scope" refers to emissions from Scope 1 and 2 sources and Scope 3 emissions from business travel, waste paper and water, and "fuel and energy activities," according to the report.

The company offset all its roughly 28,000 tons of carbon dioxide equivalent in scope emissions in 2023 with a mix of 34% removal credits and 66% avoidance credits, according to the report. It planned to increase its share of removal credits to 50% by 2025 and 100% by 2030.

Swiss Re targeted credits from projects that displace coal consumption for its avoidance purchases and biochar projects for its removal credits.

The company's internal carbon levy sits slightly below prices for biochar credits OPIS has seen recently. Biochar credits were heard bid on the Neutral exchange on Wednesday in a range of $125.13/mt to $141.21/mt. These bids were matched by offers in the range of $147.97/mt to $171.17/mt.

"I've been in the market for two years," Lüdin said. "But the market is also not very old. One thing that is clear to me is that the average size of projects is growing a lot."

Exomad is a good example, Lüdin continued.

"It started with one facility for 40,000 to 50,000 mt," Lüdin said. "They're growing now. They already are finalizing a second facility and planning a third. Then, there are more developers coming into the market. Supply is coming up."


This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.


-- Reporting by Henry Kronk, hkronk@opisnet.com; Editing by Jeremy Rakes, jrakes@opisnet.com


(END) Dow Jones Newswires

06-13-24 1536ET