“Do our best, remove the rest” is the motto that guides insurance services
group Swiss Re when it comes to managing its operational and business travel
emissions. The group has made huge strides in doing its best regarding business
travel, and expects to achieve an average travel carbon footprint reduction of 60 per
cent for 2025-27 against a baseline of 2018.
To eliminate the footprint that remains after reduction, Swiss Re buys
credits from a portfolio of carbon dioxide removal (CDR) schemes. Among them is
Climeworks, which specialises in direct air capture (DAC) and storage. Climeworks’
plant in Iceland sucks in air, capturing CO2 molecules through a filter. Working with a partner
called Carbfix, those molecules are added to water, which is injected 800
metres deep into volcanic rock and mineralises, locking away the carbon for
thousands of years.
There are other human-engineered CDR techniques, complementing nature’s
own carbon removal and storage miracle: trees, which are highly effective but
always vulnerable to disease, fire and deliberate felling. One is BECCS,
bioenergy with carbon capture and storage, where biomass is burned to generate heat
or electricity, and then the CO2 from the combustion exhausts is stored in the
same way as DAC.
Alternatively, there is biochar removal. Again, carbon is extracted from
heated biomass, and water is added to create either fertiliser or building
material. Creturner, a company for which Serko strategic business development
vice-president Johnny Thorsen acts as a strategic adviser, creates bricks that it
deposits in a disused mine in Sweden.
Reed & Mackay global sustainability director Chris Truss sees great
potential in engineered CDR. “The great thing is that it is permanent,” he says. “That
ability to take carbon out of the atmosphere and lock it in the ground is a
hugely valuable tool in the arsenal of technologies available to us.”
CDR also looks increasingly attractive as the likelihood recedes of
alternative fuels making a decisive impact on the carbon impact of aviation. Alternative aviation
fuels accounted for only 0.3 per cent of global jet fuel production in 2024,
according to the International Air Transport Association (IATA). Furthermore, alternative
fuel biomass sources are sometimes of dubious provenance – such as virgin oil or
crops on land that could produce food – and even at best reduce emissions by 80
per cent across their life cycle.
But, of course, if sucking carbon out of the atmosphere were that easy,
there wouldn’t be a climate crisis. “The big problem we have at the moment is
scale, which requires investment,” Truss continues. “It’s incredibly expensive.
These technologies don’t provide the ‘get out of jail free’ card that everybody
wants. Any net zero strategy for a corporate or industry needs several steps.
We shouldn’t use this as an excuse to carry on travelling willy-nilly. You have
to do everything you can to get your emissions down to as small a level as
possible and then look at removal.”
CDR is, in principle, “much more scaleable than other methods”, says
Alexander Kunkel, clean aviation fuels data analyst for the consultancy
Transport & Environment, “but even if you have very significant investment,
it’s still unlikely that we will have enough capacity to offset aviation’s
carbon impact.”
Global CO2 emissions from aviation reached one billion tonnes pre-Covid,
the International Energy Agency has reported. According to Truss, oil exporters
forecast demand for kerosene to double by 2050. The Intergovernmental Panel on Climate
Change estimates carbon removal will have to reach 10 billion tons per year by
2050 to meet net zero targets, and even that assumes that other strategies will have
reduced global emissions from their current annual level of 40 billion tons.
Only 0.14 per cent of progress has been made toward that 10 gigaton
total, according to the CDR sector’s tracking website CDR.fyi. Carbon removal
schemes have sold 14.3 million tons cumulatively at a cost of $4 billion.
However, Climeworks director of strategic partnerships management Laurent
Müller remains hopeful that with more urgency the
scale-up can be achieved. “If a large DAC plant can capture one million tons
per year, then we need 1,000 of those plants built by 2050,” he says.
Any company looking to invest in DAC carbon credits will need deep
pockets. Climeworks currently sells DAC credits at $600-$800 per ton but has a
strategy to reduce that price to $100-$200 per ton. Other technologies are
priced lower. Creturner charges $50 per ton for its biochar, comparable to a
reputable, well-managed tree-planting programme. Climeworks itself sells a
portfolio of technologies starting at $100 per ton.
“You don’t need to remove all your travel emissions with the highest-quality,
most expensive credits today, which would be DAC,” says Müller. “Instead, plan how you progressively increase your removal capacity to arrive at net zero
in future.”
Reed & Mackay similarly sells a range of credits to its clients. “We
build a portfolio of what the client wants, from $6 for simple offsets to $600
for carbon removal, to end up with a net price per ton,” says Truss.
Having such
a wide range is “exactly the problem,” he says. “We’ve got clients that have internal
costs for carbon ranging from £10 per ton to probably the highest at £300. So even
at the very top level it’s nowhere near these tech-focused, fantastic
solutions. It’s a question of how do you get them to nibble a little bit of it
and socialise them to purchasing while
making the cost palatable in the round?”
Swiss Re offers some pointers to how this might be achieved. The group is
working towards 100 per cent removal of in-scope greenhouse gas emissions it is
unable to reduce by 2030. Key considerations for procuring a CDR project are integrity,
durability, scaleability and additional social benefits.
The group finances its carbon compensation by applying internally what it
calls a carbon steering levy. The levy started at $100 per metric ton of
emissions, including for buying travel, in 2021. Currently it stands at $145
and will reach $200 by 2030.
The carbon removal programme created by the levy buys a portfolio of
carbon removal certificates, the aim being to support different technologies
with potential. “Some are more expensive DAC projects, like Climeworks,” says Vincent
Eckert, head of internal environmental management for Swiss Re. “The hope is
that the market signals provided by the long-term purchase agreements will help
attract the capital needed for scaling up and bringing down the cost of durable
solutions.”
Swiss Re has co-founded a purchasing alliance called NextGen CDR, which
follows the same objective and aims for an average target price of $200 per
ton. “Such a programme needs a robust financing mechanism,” Eckert says. “With
our internal carbon steering levy, we have a defined budget. Even more
importantly, it makes the cost of CO2 visible within the organisation. A CO2
price of $200 also helps to rethink decarbonisation business cases that become
more attractive with the new benchmark.”
CDR may be expensive, but it remains cheaper than doing nothing. “The
social cost of carbon, in other words the damage society has to bear for the
negative effects of one ton of CO2, is around $1,000. That’s what needs to be
understood,” says Müller.
Truss agrees: “DAC or any other carbon removal technology forms a really
important part of how we are going to decarbonise not only the aviation sector
but the entire planet we live on.”