A market report from World Fund, a European VC focused on climate solutions, highlights the state of the carbon removal industry. The report finds that only 5-10% of carbon removal credits genuinely remove carbon from the atmosphere, while the rest are avoidance credits that mitigate emissions. It notes that the growing demand for carbon credits may lead to a decline in credit quality. Climate-focused venture capital funds have opportunities to support startups that enhance the accuracy and scalability of credit programs. The report suggests that marketplaces with traceability and a focus on high-quality credits can enable carbon removal growth. Innovative financing, independent verifiers, rating agencies, and traceability providers are also vital for the carbon removal market. The market is expanding rapidly, with ambitions to reach gigatons per year of CO2e removal, offering opportunities for improved removal technologies and MRV (Measurement, Reporting, and Verification) startups.

Source: Carbonherald