Frequently Asked Questions
The basics
What is carbon dioxide removal (CDR)?
Carbon dioxide removal (CDR) is the result of activities that take CO₂ from the atmosphere and durably store it in geological, terrestrial, or ocean sinks, or in long-lived products. CDR does not include the capture and removal of CO₂ from concentrated point sources of fossil-based emissions nor does it include natural CO₂ uptake not directly caused or improved by human intervention. Milkywire specifically invests in durable carbon dioxide removal, in line with our aim to grow the supply of carbon dioxide removal that is able to compensate for fossil emissions, following the like-for-like principle, and contribute towards net-zero goals.
What qualifies as durable carbon dioxide removal?
Durable CDR means CO₂ is taken from the atmosphere and stored with a very low risk of returning for at least several centuries. Examples include mineralization in rock, geological storage from direct air capture (DAC) or bioenergy with carbon capture and storage (BECCS), and some long-lived products that sequester carbon in stable forms. Short-lived pathways, such as temporary increases in forest carbon, are valuable for ecosystems but are not considered durable due to high risk of reversal from factors such as to fire or blight. Most importantly, a durable carbon dioxide removal results in the storage of CO₂ on time scales appropriate for an offset to follow the like-for-like principle.
What is a like-for-like offset?
According to the UNFCCC, a "like-for-like” offset occurs when the warming impact and timescale of carbon storage between an emissions source and an emissions sink are equivalent. Essentially, the method used to capture and store carbon must match the emissions it replaces in terms of its warming effect and how long it can securely store the carbon. In the carbon market, offsetting occurs when an emitter pays for carbon to be removed on their behalf, in the form of a carbon credit.
What is a carbon credit?
A carbon credit is an tradable environmental attribute or certificate that represents a reduction or removal of one tonne of carbon dioxide relative to a baseline scenario. Carbon dioxide removal credits (which represent a tonne of physical CO₂ that has been extracted from the atmosphere) can be credibly used to offset fossil emissions from a company's operations, but carbon reduction or avoidance credits cannot.
How is carbon dioxide removal different from emissions reduction or emissions avoidance?
Emissions reduction is the difference between your emissions prior to an intervention and after an intervention, e.g. improving energy efficiency. Emissions avoidance is the prevention of a new emission from occurring as a result of a new intervention, e.g. stopping a coal plant from being built. Total emissions reductions and avoidance would mean that no new emissions are entering the atmosphere, but historical emissions would not be impacted. This is different from carbon dioxide removal, because removal activities result in a direct decrease in atmospheric CO₂. Carbon removal can be used to remove ongoing and historical emissions. If the atmosphere’s carbon budget (concentration of CO₂) is analogized to a bathtub filling up water, then reductions and avoidance would be the slowing of the tap to limit the flow of water while removals would be pulling the plug to drain the water. Importantly, offsetting a tonne of fossil emissions with a carbon reduction or carbon avoidance credit results in one tonne of net emissions. Offsetting a tonne of fossil emissions with a carbon removal credit results in net-zero emissions. Offsetting emissions with carbon reduction or avoidance credits can not result in a net-zero system.
Would we (humanity) need carbon dioxide removal if we reduce emissions?
If we successfully reduced all of our emissions today, then CDR would still be necessary to limit the warming impact of historical anthropogenic emissions which will exist in the atmosphere for thousands of years. Additionally, to achieve any net-zero goals, carbon removal is necessary to compensate for any emissions that cannot be abated.
What is the scale of the challenge?
Based on projections by the IPCC, between 6-10 Gigatonnes (Gt) of CO₂ may need to be removed per year by 2050 to adhere to the targets of the Paris Agreement, reach net zero, and bring temperatures back down to 1.5°C. To date, less than 0.001 Gt has been durably removed. By 2030, the annual total of tonnes of carbon removal delivered needs to increase at least a hundred-fold from today's levels. Also, it is not just the rate of technology scale that is a challenge, but as with any technological advancement, financing is a crucial element. Analysts estimate that in order to reach the supply of CDR necessary for net-zero, between $6-16 trillion may be needed to be invested into the industry.
for buyers
What makes durable carbon dioxide removal credits different from the carbon offsets that I’ve heard about in the news?
The carbon offset market has matured and changed a lot in the past decade. Durable CDR credits represent the removal of CO₂ from the atmosphere and its storage for centuries or longer, while lower quality offsets pay someone to avoid new emissions or for shorter-term CO₂ storage. The biggest exposure is claim risk, when buyers make equivalence claims such as “carbon neutral” using avoidance or short-lived sequestration credits that do not accurately compensate for fossil emissions. Because durable CDR credits are more rigorous in their measurement and utilize engineered or geological storage, their permanence and MRV quality are stronger than projects that rely on counterfactual baselines such as avoided deforestation. Non-durable credits face higher risks of reversal, leakage, and baseline inflation, which erode the ability of the credits to be used as offsets. The market for high-quality CDR credits is complex and evolving. There is an expertise gap with limited specialized, scientific guidance and insufficient rigorous project vetting. The industry has many emerging removal technologies; diverse and rapidly evolving methods, varied climate impacts and risks and multiple measurement methods. This is why it is so important to have a trusted partner in carbon removal procurement, to ensure you are funding high-quality projects.
What role should durable CDR play in a company’s net-zero strategy?
While emission reductions should always be the primary strategy, the reality is that completely eliminating all emissions across Scopes 1-3 is currently unfeasible for most (if not all) companies. To achieve net-zero emissions, companies must ‘balance’ their residual greenhouse gas emissions with the amount of carbon they durably remove from the atmosphere. Given the difficulty of fully reducing emissions, achieving net-zero without CDR technologies is often impossible in the near to medium term. Therefore, CDR is not merely an option but a necessity for bridging the gap between reduced emissions and true net-zero targets. It enables companies to neutralize those emissions that are currently too challenging or costly to eliminate, providing a crucial tool in the global strategy against climate change. For some industries, such as aviation, carbon removal is also likely to be the cheapest and most sustainable mitigation option even in the long term.
How many tonnes of carbon dioxide removal should our company purchase, and when?
This question is difficult to answer in the abstract and requires a more nuanced understanding of your current and future emissions portfolios and your organization’s sustainability strategy. To answer this question for our partners, Milkywire works to determine removal needs, design purchasing strategies, and align procurement with corporate climate targets. In general, a good starting point is to identify emissions that are the most likely to be unabated in your organization’s target net-zero year. Those emissions will need to be balanced with durable removals. However, waiting until that year can create challenges: supply is limited, prices may rise, and the credibility of your net-zero commitments may suffer. In general, we advise our partners to begin purchasing CDR as soon as possible, even if it is a smaller, pilot purchase. The benefit of starting early is that you can develop the expertise and systems needed to scale carbon removal purchasing as it becomes a larger part of your climate strategy.
What are the risks of delaying carbon removal purchases?
CDR projects take time to build (permits, construction, MRV) and high-quality supply is being locked up in multi-year deals. Late movers will face higher prices, longer waits, and fewer options. Additionally, postponing the purchase of CDR credits results in decreased access to high-quality projects and near-term delivery timelines. A net-zero sustainability strategy is not realistic without the inclusion of carbon removal. Acting now secures access to high-quality removals before supply tightens and costs rise with increasing demand. It wouldn’t be credible to wait with emission reductions until just a few years before the target date, and similarly, waiting to scale up CDR until the last minute poses the risk that it may not be available when needed.
What types of carbon removal investments can Milkywire facilitate?
Spot purchases. We can, on a limited basis, facilitate one-time purchases of existing, already delivered CDR credits. Immediate availability and reduced risk typically drives up the price. For immediate short-term needs of high-quality credits, this can be suitable. Prepurchases. Early commitments to buy future CDR credits at an agreed price. Payments are made upfront or in installments before delivery. This de-risks project development and catalyzes supply and market growth. Offtake agreements. Contracts to purchase a specific amount of CDR credits over a set period, used to secure long-term CDR supply at agreed prices and provide financial certainty for project developers and buyers. This is great for particularly new technologies. The agreements can include terms on price adjustments and delivery schedules. Donations. For those looking to drive impact without holding credits, we offer the option to donate to carbon removal, on its own or alongside other high-impact climate and nature projects
for suppliers
What is Milkywire’s approach to catalyze the CDR ecosystem?
Milkywire wants to scale and broaden the carbon removal ecosystem. We are not just looking for high-quality projects, but also to catalyze as much change as possible, identifying where our funds are most impactful. No one yet knows which CDR technologies will prove to be the most effective, cost-efficient, sustainable, and scalable. This is arguably the most crucial goal for CDR in the 2020s, along with laying the groundwork for an industry that can scale to gigatonnes in the coming decades. We want to help prevent high-potential CDR technologies from failing to be properly tested, avoiding the risk of locking in suboptimal solutions. That’s why our focus is on broadening the ecosystem, leaving no carbon removal stone unturned and supporting not only scalable solutions, but also those that have yet to be tried. Achieving the gigatonne scale required for global net zero by 2050 requires a portfolio of removal solutions. No single technology or method alone can meet the needs, due to inherent limitations with essentially all methods.
How does Milkywire source projects?
Every year, Milkywire conducts an open call for proposals, where we invite companies to pitch their solutions and request financing. Out of hundreds of solutions, we select those with the greatest potential for impact. This funnel approach to sourcing projects gives Milkywire unique access to 'seed stage' projects, which are most in need of funding and often have the highest potential for scaling with our investment. Last year, over 600 CDR companies applied. While most applications came from more prominent methods, such as DAC and Biochar (which together made up almost half of the applications), it also allowed space for more novel concepts, such as “pit lake alkalinity enhancement” and a novel supercritical water oxidation process for the treatment of wet organics and the co-benefit of PFAS destruction. Milkywire does not consider external, unsolicited proposals outside of our open call.
for the extra curious
How are carbon credits measured and verified?
Baselines / Counterfactuals - A baseline is the estimated level of emissions that would have occurred without the project. The project’s impact is the difference between the counterfactual and the monitored outcome. A good baseline is realistic, documented, and periodically rechecked so it does not overestimate impact. Additionality - A credit should only exist if the project would not have happened without revenue from selling credits. Additionality tests look at financial need, regulatory requirements, and common practice. If the activity is already mandatory, already profitable, or already common, the credit is likely not additional. Leakage - Projects could result in equivalent emissions occurring somewhere else. For example, protecting one forest might push logging to a nearby area. Credible verifications estimate this risk and require actions that minimize the displacement. Uncertainty - All measurements have error bars. High quality programs quantify uncertainty in data and models, then apply conservative deductions so claimed tons are more likely to be an underestimate than an overestimate. Third-party verification - Independent auditors review the project design, data, calculations, and monitoring to confirm the credits are issued according to the chosen methodology. Verification happens before credits are issued and again during operation, and the results are documented in public reports.
What risks can cause a carbon credit to lose integrity, and how are they managed?
Reversal risk - Stored carbon can be released later by fire, flood, decay, product failure, or storage breach. Management tools include buffer pools that hold back a fraction of credits as insurance, geological and product warranties, active monitoring with triggers, and legal liability for replacement if carbon is lost. Double counting - The same ton can be claimed by more than one party or program if accounting is sloppy. Protections include unique serial numbers on a public registry, rules that prevent overlapping claims with national inventories or compliance programs, and contractual clauses that prohibit resale after retirement. Methodology weaknesses - If the rules used to calculate impact are flawed, every credit from that method can be overstated. Strong governance requires peer review, periodic updates, and conservative default factors. Buyers can reduce exposure by favoring methods with transparent documentation, recent revisions, and rigorous uncertainty handling. Project non-delivery - For forward or offtake contracts, the project may deliver fewer credits than promised or deliver late. Protections include staged payments tied to milestones, make-good clauses that require replacement credits of equal or better quality, performance bonds, and rights to cancel if delays exceed agreed limits. Fraud or data quality problems - Poor data management or intentional misreporting can inflate results. Mitigations include independent data audits, meter calibration records, automated data capture where possible, and access for buyers or auditors to review raw data trails. Tools to manage risk: – Pre-purchase due diligence – Buffer pools and insurance that cover specified reversal events – Replacement obligations and warranties with clear time limits and quality standards – Serial-number tracking on reputable registries and prompt retirement on transfer – Milestone-based payment schedules and termination rights – Ongoing monitoring with public updates and auditor access
What are the typical costs, and why do they vary?
Costs span a wide range because technologies, feedstocks, energy needs, and storage forms differ. Variation reflects energy intensity, capital costs, measurement uncertainty, project risk, co-benefits, and supply scarcity. Biochar often ranges from about 100 to 300 dollars per ton depending on biomass type, kiln scale, and certification. Enhanced rock weathering often ranges from about 100 to 250 dollars per ton, driven by rock sourcing, grinding energy, and field measurement. Geological removals such as BECCS and direct air capture are currently higher. BECCS credits commonly fall in the low hundreds per ton depending on feedstock and storage. Direct air capture with geological storage often ranges from about 500 to more than 1,000 dollars per ton today, with costs expected to decline as plants scale and low-carbon energy becomes cheaper.
What standards and regulations are in place today?
Accounting and claims - The Greenhouse Gas Protocol provides the main rules for corporate inventories. ISO standards such as ISO 14064 and ISO 14068 give additional guidance on quantification and net-zero claims. Credit quality and market integrity - Independent initiatives set quality and claims guidance, including the Integrity Council for the Voluntary Carbon Market (Core Carbon Principles) and the Voluntary Carbon Market Integrity initiative for how companies may use credits in claims. Policy - Regions are moving toward formal certification and monitoring. The European Union has adopted an EU Carbon Removal Certification Framework to harmonize how removals are defined and tracked. Various countries regulate geological storage and provide incentives such as tax credits for capture and storage. The picture is evolving, so companies should check the latest rules in their jurisdictions and within any voluntary program they use.
What is the SBTi recommendation for purchasing carbon removals?
Under the Science Based Targets initiative, carbon removals are required to neutralize any residual emissions at the long-term net-zero target date. Before that date, companies can finance mitigation beyond the value chain, including removals, but those purchases do not count toward progress on near-term reduction targets. In practical terms, buy removals now to help scale supply and learn, yet do not use them to replace cutting your own emissions. The draft Corporate Net-Zero Standard V2 proposes two options for ensuring durability: – Like-for-like approach: Match residual emissions with removals that offer a storage duration comparable to the atmospheric lifetime of the greenhouse gas being neutralized. – Gradual transition: Enable a phased shift from temporary to more durable removals over the 2030 to 2050 period, aligned with the pace of deployment of removal solutions reflected in climate scenarios. This flexibility allows for the prioritization of finance towards the protection and enhancement of natural carbon stocks, recognizing their critical role in delivering near-term mitigation and co-benefits, while still encouraging investment in the development and scale-up of durable removal technologies over the longer term.
Let's talk carbon removal
Get in touch with our CDR experts to explore how Milkywire can support your company’s climate goals.
