Zopeful Climate - CDR Association Interview

What is Zopeful ?

What is Zopeful and what inspired its creation?

Adam Oskwarek - We’re working on the demand-side of carbon removal by creating science-backed, ready-made, portfolios of CDR that are available to all, whether you’re a business - of any size, but particularly small and medium organisations - looking to add it to your climate program or an individual wanting to take the embodied carbon out of the atmosphere from something you’ve purchased or done. 

Our original carbon removal portfolio - like a transparent ETF of carbon - offers a blend of CDR projects for an accessible price per tonne off-the-shelf, with a target percentage of highly permanent removals. Our other portfolios have higher levels of permanence for different use cases, e.g. when you need more like-for-like removals for an immediate carbon releasing activity. We’d love everyone to buy the most highly durable CDR they can, and offering a variety gives people a choice of high quality removal solutions at a range of price points. 

We’re pathway agnostic and have partnered with an array of amazing, industry-leading, carbon removal projects and companies around the world and are always looking to onboard more. 

We’re also advocating for steeper decarbonisation in line with climate science through easy-to-consume educational resources and tools. These are free and we aim to keep them open as a public good. We recently just launched a new course, perhaps overly ambitiously called How to Decarbonize the World to add to our other four. 

Zopeful was originally an effort to reframe the narrative about tackling climate change being hard or not worth the investment or too late. After we researched it, it became clear that nothing could be further from the truth. But we weren’t happy with how this was being presented at large. Instead of taking agency away from folks with fear-laden narratives, we wanted to empower them to act with confidence and knowledge that what any and all of us do matters. Big or small, every tonne counts. And the outcomes of achieving this grand transition are highly desirable for all. 

I then got hooked on CDR around 4 years ago and have been researching it ever since. We started buying it about 18 months ago through our portfolios. 

On my travels I’ve been fortunate enough to find an awesome group of humans, partners and collaborators who want to help me continue to expand the ambition for outsized positive impact that Zopeful has at its core. So that’s what we’re doing, unphased by the size of the challenge. In fact, using the enormity as motivation. 

Stepping back a bit: while a lot of great progress has been made in the CDR industry it’s clear that breaking out of the climate bubble and bringing more folks along is key to growing this market and the adoption of carbon removal as a key part of achieving science-backed net zero. Out in the world at large, it’s still not on the menu from a demand perspective, and we need it to be. 

Common Misconceptions

What are some common misconceptions or challenges you've encountered regarding carbon credits and how does Zopeful address them?

Adam Oskwarek - There’s a lot to unpack here. We spend a bunch of time talking about the critical role of CDR in net zero - and that we never achieve it without an at-scale carbon removal industry. More broadly it’s still a topic of discussion to say what role carbon removal should play. We follow the SBTi and IPCC science and it's pretty clear what the size of the gap is in net zero, and that we don’t get there overnight without spending the next years and decades building up. 

Something that gets brought up a lot - and we don’t think is an issue - is the moral hazard of using CDR in replacement of decarbonising. There isn’t a moral hazard, as the investment required in CDR to reach scale is nominal next to global decarbonization. They’re for different use cases and situations. We can afford to do both and we can’t afford not to.

Also, the “when to buy CDR” question comes up quite often. There’s a misconception that it’s something that comes after decarbonization. As we all know in the industry, if we wait that long to grow CDR then it won’t be at the scale we need when we need it. 

The short answer is both are needed from now, in different ratios. CDR is an essential part of any decarbonisation program for companies for residual emissions in-year that they can’t fully reduce in the short-term, historical emissions and while they’re decarbonizing. There’s no moral hazard as decarbonization (particularly scopes 1-2) is often cheaper than using CDR credits to compensate for those they can’t reduce. 

Trust is also at an all-time low in carbon credits broadly - with just cause - with many companies that were previously participating in the voluntary market thinking hard about what their approach should be. This hasn’t been caused by CDR (& to use CDR is the antidote to it), but it does impact it. 

Also a fall over from the legacy VCM is the idea that purchases always need to be tonne-for-tonne for companies buying CDR. They don’t. A better question is “what’s the most durable and scientifically defensible option for the budget we have available?” The answer is often a mix - a portfolio - of carbon removal to spread delivery, scientific and financial risk, as part of a science-aligned net zero roadmap. 

All this is about companies. There’s also individuals who we also serve who haven’t had access to high permanence carbon removal before. 

They’re tired of being sold low-quality carbon credits and excited by the prospect of something that does what it says on the can with CDR, even with the industry still being young. While we all accept businesses should be investing in CDR, people power is under-rated in moving the needle on wider adoption and acceptance. 

Carbon Project Viability

How do you evaluate the effectiveness and long-term viability of carbon removal projects before purchasing?

Adam Oskwarek - I can’t fit an answer to this into a sensible length for this post. Long story short is that we look at all pathways of removal - from nature-based to fully engineered and everything in between and ask a bunch of questions:

• What is the likelihood this delivers genuine removal and is it measurable?
• What’s the latest science says about the permanence of this solution?
• Is the short term plan credible and can they deliver the next few vintages on time and on budget? 
• Does this solution or project have the potential to scale to megatonnes in the short to medium term, and how likely is it to get to a gigatonne long term? The latter is a bit of a crystal ball moment so we don’t currently overly focus on that…
• Is it possible this pathway will reduce cost per tonne significantly as it scales?
• Then there’s the project delivery and financial risks associated with the stage of project and company, how they’re capitalised and if we can mitigate some of those to gain comfort or spread the risk across different projects

While our goal is to support and advocate for CDR and projects for the long term we’re only presently buying near-term vintages and those who are post-FOAK near/at commercial size plants or those on a clear(ish) path to higher TRLs. Hopefully that will expand as we all get better at this. 

Buying Barriers

What's stopping potential buyers entering the market?

Adam Oskwarek - The easy thing to say is “how much it costs”. And this is partially true, though not the complete story. 

Like many things in climate we see it as a complex combination of factors. 

Yes, CDR is comparatively expensive next to things that don’t move the needle. Yes, it’s cheaper to decarbonise (but you can’t decarbonise everything in line with SBTi in the short term). Yes, CDR has some delivery and other risks (many of which can be overcome or mitigated). Yes, it’s not that easy to evaluate and choose the projects, buy or manage them (we try to help with that). Yes, the acceptance of carbon removal isn’t where it needs to be. Yes, there’s a lack of policy support for it across regions. Yes, the science is still emerging and developing.

And yes, both companies and individuals - probably governments dipping their toes in too - should be buying it now both for their own need of contributing towards the removal of unavoidable emissions and also to enable this vital industry to reach a size where it can be the gigatonne-sized climate change fighting tool we need it to be. 

No, this can’t wait. 

Trends

What are some emerging trends or developments in the field of permanent carbon removal that Zopeful is particularly excited about?

Adam Oskwarek - When we started out evaluating CDR projects about 3 years ago it was incrementally harder to do than now. We’ve got a lot better at it, but also the industry has come on leaps and bounds. Back then there weren’t any sizable deliveries and that’s changed a lot. There’s now more data, more field trials, a bunch more evidence, more transparency in what’s happening. 

Something we’ve been particularly excited about is how the industry has generally been careful and thoughtful in building and filling in the gaps in the science - the fundamentals as well as the MRV. We see this continued focus as a requisite for CDR gaining wider acceptance, attracting more buyers, outgrowing and outpacing avoidance credits in the VCM, as well as gaining inclusion in compliance markets down the line. 

We’re excited about all the pathways proving their mettle and particularly those (who isn’t?) that have a pathway to fast scaling and bringing the average $ per tonne down the cost curve. Every $50 or $100 per tonne drop across the market will open up more growth in demand, which will drive the kind of growth in supply we need. We’re confident in this, and are already seeing that over time thoughts about CDR go from “do we need this?” to “aha, of course, this is part of the answer!”.

In addition, over the last couple years we’ve seen that CDR projects have been working hard to develop co-benefits and climate justice into their plans. Both of which are essential to many of the pathway’s credibility as good actors in this race to reduce and remove as much of the CO2 we’ve pumped out over the last couple hundred years. There is no full transition without a just transition. 

Biggest Nature Based Challenges

What's the biggest challenge facing CDR’s nature-based/science-based solutions, and what is required to scale and solve them in 2024?

TLDR: This is a critical long game we’re playing. We all need to strap in for the ride. There’s really two different sets of challenges as we see it at the minute: 

1. The internal challenges with rapidly building a transparent and trustworthy CDR industry with a robust science at its core, and it outgrowing the traditional non-removal credits in the voluntary & compliance markets
2. The external demand for CDR, and acceptance of its role in net zero, from outside the industry from buyers, governments and the general public

Both sets of challenges do create a drag on how fast we can collectively scale durable CDR this year and beyond, as well as the availability of capital to deploy to grow the industry. 

For the first, internal challenge, we’ve seen huge strides forward with visibility and transparency with a focus on MRV over the last few years. It’s still developing and we feel it’s going in a strong direction to position CDR as the de facto only credible way to contribute and compensate for carbon emissions that aren’t immediately reducible, or those that are going to prove hard-to-abate over the longer term. For trust, avoiding some of the unfortunate (some may say necessary) compromises of the legacy VCM on transparency and efficacy of carbon sequestered is a key challenge for the CDR industry. Not doing so will only mean we repeat that cycle with less time on the clock to course correct. 

This is both true for creating a new generation of high-quality nature-based removals (& where/how biodiversity is valued appropriately in there) as well as the range of nature-inspired/tech-enabled to fully engineered solutions. 

For the second, external challenge, the emerging CDR industry has been talking a lot about growing supply over the last few years and while demand has grown by an impressive multiple in that time - admittedly from a low baseline - the number and range/type of buyers has remained fairly low. We’ve had some amazing catalytic purchases and we should absolutely celebrate the progress. This said, it’s hard to see us reaching into the hundreds of megatonnes by the end of the decade to be on track for ~5Gt or more by 2050 at present without shifting up several gears across the board.

Whether what moves the needle on this is a much broader range of buyers, additional acceptance of CDR (regulatory and social), movement on entering compliance markets, governmental policy support/incentives/purchases or something else feels like an open question. 

At Zopeful, we’ve always been of the mind that demand drives supply as well giving CDR companies the financial flexibility to access appropriate scaling capital to get into the hundreds of thousands of tonnes to low megatonnes over the next few years on the run up to the early 2030s. Demand makes the supply-side bankable so we can unlock the kind of finance needed to bring CDR growth in line with what the science shows us we need by 2030 and beyond. 

This, combined with proving the science and scalability are what move CDR from its current nascent role to one of acceptance as a necessary public good in the fight to tackle human-caused climate change. The ambition is definitely there from all we speak to and, from everyone in the industry’s concerted efforts over the last few years we’re definitely moving in that direction, let’s all pick up the pace. 

There’s no single magical playbook to grow a market for a good like CDR that doesn’t have a tangible intrinsic product value. My team is always asking “how do we make taking out this invisible gas feel like a physical thing?”. I honestly don’t have a super compelling answer currently - beyond what the science says I’m not sure anyone else does either. We need a plurality of approaches and ideas on how to grow it into the important tool it can be. 

The ambition, determination, and iterative progress we’ve seen since the start of this wave of CDR has been completely inspiring over the last few years. That’s why we’re continuing to do more. This is still the start, and we’re earlier than we’d all like to believe. Being patiently impatient is part of keeping our hope as things evolve and move forward. I’m very excited about all the progress we can make together, collaborative, over the next few years and beyond.