Price of carbon removals jumps 50% in one year

Research finds boom in cost of carbon capture credits, with nature-based removals also on the rise

The cost of carbon removal credits has soared in the past 12 months, according to the latest figures from MSCI. 

The average spot price of credits generated by direct air capture and carbon capture and storage, known as ‘engineered credits’, has hit $331 per tCO2e – up 50% since this time last year.   

Removals generated by nature-based solutions such as reforestation have risen 34% in the three months ending June, to $19.9 per tCO2e.  

This bucked the trend for falling prices in the broader carbon markets, which MSCI said  had dropped 31% to $3.3 per tCO2e since last year.   

It comes as companies, particularly in the tech sector, ramp up investments in carbon removals in a bid to juggle their climate commitments with growth. 

A study released this week by CSR.fyi claimed that more tonnes of removals were contracted in the second quarter of this year (15.48m) than in all quarters combined since 2020 (13.6m).

The figure was driven by Microsoft, which made two mammoth deals during the quarter.

This month, Google agreed to purchase $1.75m of carbon removals from three companies; and removals platform Frontier, which is used by the likes of Alphabet, Salesforce and H&M, announced a $41m carbon capture deal. 

Firms are also on a recruitment drive as they build up their in-house expertise: Meta and Apple both advertised for carbon removal roles back in February.