The carbon dioxide removal (CDR) market continues to experience rapid growth, with demand for high-quality CDR credits soaring. According to a report from CDR.fyi, purchases of high-durability CDR credits reached nearly 8 million metric tons in 2024, marking a remarkable 233% increase from the previous year. This rapid expansion has brought the integrity and quality of CDR credits to the forefront of concerns for both buyers and sellers.

High-quality carbon removal credits are essential for several reasons:

1. They ensure the achievement of intended climate impacts through CDR solutions.
2. They maintain the credibility of organizations' climate claims.
3. They foster trust and encourage further market expansion.
4. They help mitigate potential reputational risks associated with unsupported claims.

Buyers indeed are recognizing and embracing the value of high-quality credits as recent findings highlight the need and demand for rigorous standards and verification processes in the CDR market. According to the Calyx Carbon Integrity Index™, the volume of credits retired aligning to high-integrity frameworks like the Integrity Council for the Voluntary Carbon Market (IC-VCM) Core Carbon Principle (CCP) or Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which both aim to establish global benchmarks for high-integrity carbon credits, increased from 29% in 2021 to close to 50% in 2024. This significant increase underscores the growing importance of such initiatives. Furthermore, Calyx Global and ClearBlue Markets' carbon credit pricing data indicates that CCP-labelled credits are commanding up to a $10 price premium in the market. 

Why CORSIA?

As the market is increasingly differentiating between high-quality and lower-quality credits, preferring the former over the latter, compliance with international frameworks like CORSIA becomes increasingly important. CORSIA, developed by the International Civil Aviation Organization (ICAO), is a global market-based measure designed to offset CO2 emissions from international aviation. It aims to stabilize net CO2 emissions from international aviation at 2019 levels, with airlines required to purchase carbon credits to offset any growth in emissions above this baseline.

Being compliant with CORSIA is beneficial for several reasons:

1. Market Access: CORSIA-compliant credits are eligible for use by airlines to meet their offsetting obligations; this opens a significant market for credit providers.
2. Quality Assurance: CORSIA's stringent eligibility criteria serve as a benchmark for high-quality carbon credits, enhancing the credibility of compliant projects.
3. Global Recognition: Compliance with CORSIA signifies adherence to internationally recognized standards, potentially increasing the value and marketability of credits.
4. Contribution to Climate Goals: By aligning with CORSIA, carbon credit providers contribute to the aviation industry's efforts to mitigate its climate impact, which is crucial given the sector's growing emissions.

CORSIA's Impact on the Carbon Market

CORSIA is having a significant impact on the overall carbon market. According to a report from BeZero Carbon, CORSIA is expected to create new demand for 60-160 million carbon credits during its first phase (2024-2026). This increased demand is likely to result in a significant price premium for CORSIA-eligible credits. Furthermore, MSCI Carbon Markets analysts have projected that CORSIA-eligible carbon credits could cost between $18-51 per ton of carbon dioxide equivalent (CO2e) during Phase I (2024-2026), rising to $27-91 in Phase II (2027-2035). This could translate to additional costs for airlines of $1.9-$7 billion in Phase I and $13-$109 billion in Phase II.

By aligning with global benchmarks like CORSIA and ICVCM, Puro.earth is not only ensuring the credibility of its credits but also contributing to the overall health and growth of the CDR market. This commitment to quality will attract more buyers and investors, further accelerating the scaling of carbon removal solutions that are crucial for addressing the climate crisis.

Puro.earth's Commitment to the Highest Standards

Given Puro.earth's commitment to maintaining the highest standards of credit integrity and aligning with global best practices, including CORSIA and ICVCM requirements, important updates were recently made to its General Rules for the Puro Standard. One of the most notable changes is the transition from ongoing issuance rights for suppliers to an Increased Audit Frequency model. Previously, ongoing issuance rights allowed certified Production Facilities that had demonstrated regular industrial operation and monitoring to receive CORCs (CO2 Removal Certificates) issued against monthly Output Reports, rather than waiting for annual verifications. This system provided more frequent issuance of credits for suppliers with consistent operations. 

While the transition from ongoing issuance to more frequent audits may require some adjustment for some suppliers, it ultimately strengthens their position in the market because the Increased Audit Frequency model provides several benefits that include:

1. Enhanced Verification: More frequent audits allow for regular and thorough verification of carbon removal projects, ensuring they consistently meet the stringent criteria for high-quality credits.
2. Adaptability to Market Dynamics: The CDR market is evolving rapidly, and more frequent audits enable Puro.earth suppliers to adapt their processes to meet the growing demand for transparency and quality assurance.
3. Risk Mitigation: By implementing more frequent audits, Puro.earth can better manage risks associated with project performance and credit issuance, protecting both suppliers and buyers.
4. Market Confidence: This move reinforces Puro.earth's position as a leader in providing high-integrity CDR credits, which is essential as the market is expected to grow significantly in the coming years.

Moreover, more frequent audits can offer suppliers opportunities for continuous improvement and optimization of their CDR processes. The increased scrutiny and verification can provide suppliers a competitive advantage, as buyers increasingly seek credits with the highest levels of integrity. By meeting global requirements for high-quality carbon credits, suppliers can position themselves favorably for improved viability and growth opportunities in the CDR market. Furthermore, as the market grows, regulations are likely to become more stringent and suppliers already accustomed to frequent audits will be better prepared to meet future regulatory requirements.

The CDR market is quickly maturing and maintaining high standards of carbon credit integrity is critical for its long-term success and impact on climate change mitigation. Puro.earth's proactive approach positions both our platform and our suppliers at the forefront of the evolving carbon removal landscape.

For more perspective on Puro.earth's recent changes, read the Letter from the Chief Operating Officer blog post.