“The UN’s Intergovernmental Panel on Climate Change (IPCC) has made it very clear that it will not be possible to achieve the climate goals without removing CO2 from the atmosphere,” says Olle Billinger, adviser in Sustainable Banking at SEB.
A carbon removal credit is an arrangement where companies that are not able to reduce all of their emissions to zero purchases a credit from a producer that have the technology and capacity to remove carbon dioxide from the atmosphere. The use of these carbon removal credits is usually seen as a complement to steep emission reduction, not to be utilized instead of.
In early June, SEB is hosting a seminar for companies, institutions and other key actors focusing on accelerating the market for high-quality carbon removals – a market that has major potential to create climate benefit, customer value and new revenue streams for the bank.
This venture is the result of a collaboration between Sustainable Banking and Commodities, the bank’s business unit for trading in the commodities market.
Carbon dioxide an increasingly important commodity
The Commodities business unit has long had the insight that carbon dioxide will be an increasingly important commodity.
“Our entire business is based on helping our corporate customers manage their risks in the commodities market. One of these risks is posed by the EU Emissions Trading System (EU ETS). If you belong to certain industries and have a certain size of your operations, you are included in the system and are compelled to buy emission allowances to compensate for your emissions,” explains Maximilian Brodin, Head of Commodities at SEB.
Previously the allocation of emission allowances was free of charge for certain companies, but the industries included in the system must now buy emission allowances at an accelerating pace. The price, which was around EUR 4–5 per tonne just over five years ago, has skyrocketed and is now around EUR 100 per tonne.
Today the Emissions Trading System covers approximately 1.5bn tonnes of CO2 equivalents per year, which is nearly half of the EU zone’s total emissions. Total, annual global emissions are typically estimated to be around 40 billion tonnes.