The necessity of carbon removals

Olle Billinger, SEB’s carbon lead and senior advisor in the Climate and Sustainable Finance unit shares reflections on carbon removals.

The global climate crisis, driven by human activities such as fossil fuel combustion, deforestation, and industrial processes, has resulted in a significant rise in atmospheric carbon dioxide (CO₂) levels. As the most prevalent greenhouse gas, CO₂, traps heat in the Earth's atmosphere, it contributes to global warming. Despite efforts to reduce emissions, the magnitude of existing atmospheric CO₂ makes it evident that emission reductions alone may not suffice to meet the Paris Agreement's goal of limiting global temperature increases to 1.5°C above pre-industrial levels. This underscores the importance of carbon removal strategies.

The challenge

Estimates of the required volume of carbon removals vary but it is an indisputable fact that billions of tons of carbon dioxide need to be removed and the longer we delay emission reductions, the greater the need for removals to offset remaining emissions. Once net-zero emissions are achieved, reducing atmospheric carbon concentrations will remain a critical and long-term challenge that extends beyond this century.

Technological and natural solutions

Carbon removals fall into two main categories: natural and technological. Natural solutions, such as reforestation, afforestation, and soil carbon sequestration, leverage the Earth's inherent capacity to absorb CO₂, with ecosystems like forests, wetlands, and soils acting as carbon sinks. Technological solutions, including direct air capture (DAC) and bioenergy with carbon capture and storage (BECCS), provide more reliable, long-term storage with reduced risk of re-releasing captured CO₂.

A public-private partnership

Achieving scalable carbon removals requires collaboration between public and private sectors, both of which stand to benefit from neutralizing emissions in hard-to-abate sectors. From a public perspective, carbon removals provide additional time to decarbonize the economy, a task unlikely to be completed within 25 years. Even drastic measures, such as widespread deindustrialization or radical shifts in consumer behavior, are insufficient for total decarbonization within this timeframe. Thus, carbon removals serve as a bridge to achieving net-zero emissions and, eventually, going carbon-negative. From the private sector's standpoint, permanent carbon storage will be integral to most companies' net-zero strategies, as full decarbonization across entire value chains will take time.

Carbon removals is a crucial step toward achieving net-zero emissions and ensuring a sustainable future for current and future generations. This long-term perspective and big societal impact that carbon removals will have on our planet, our society and our clients are a few of the main reasons why SEB is building a market for carbon removals.