Open Letter requesting separate carbon removal targets to Net Zero Asset Owners Alliance (NZAOA)
Open Letter requesting separate carbon removal targets to Net Zero Asset Owners Alliance (NZAOA)

On January 31st, the UN-convened Net-Zero Asset Owner Alliance (NZAOA), representing over $11trl of capital from the world’s largest and most forward-thinking institutional investors, released an update to its Target Setting Protocol, aimed at its 84 signatories setting out pathways to reducing portfolio carbon emissions for major institutional investors. The update states that Alliance members shall not use carbon removals for their own sub-portfolio or sector target achievement at this time or at any time before 2030.

The well-deserved focus of the targets is on emission abatement. Nevertheless, members are highly encouraged to contribute to a liquid and well-regulated carbon removal certificate market before 2030 as such a market is important for accelerating decarbonisation.

In line with this and the well-documented scientific support from the Intergovernmental Panel on Climate Change (IPCC) for the need to remove atmospheric CO2 as unavoidable to limit global temperature rises to within 1.5c degrees, a group of carbon removal industry leaders is calling on NZAOA to affirm its support for the carbon removal technologies sector in the near-term as an essential tool in achieving net-zero by 2050 by publishing targets specifically for carbon removals, separate from existing carbon reduction targets, to be followed by Alliance members and investees.

The NZAOA’s Target Setting Protocol actually states ‘Alliance members are encouraged to invest in projects and technologies of durable CO2 avoidance and removal to scale future markets rapidly,’ This is consistent with NZAOA position, as set out in its Net In Net-Zero paper, that a combined approach of urgently reducing greenhouse gas (GHG) emissions and removing existing atmospheric carbon dioxide is our best chance of averting dangerous global temperature rises and reaching net-zero by 2050.

In response, carbon removal industry leaders are calling on NZAOA to:

  1. Establish separate science-based interim targets for carbon reduction and carbon removal with long-lived storage.
  2. Reaffirm that NZAOA encourages investment before 2030 in durable carbon dioxide removal (CDR) technologies as their development is essential to averting a dangerous increase in global temperatures.
  3. Make a distinction between i) emission reduction/avoidance carbon offsets and ii) measurable verified removal with long-lived storage of carbon using methods such as biochar production and storage, direct air carbon capture and storage, enhanced rock weathering, mineralization of carbon in products and biomass carbon removal and storage.

Commenting on the update, Antti Vihavainen, CEO of said “NZAOA is right to call on its members to prioritize the urgent abatement of its portfolio GHG emissions and target a 40-60% reduction in emissions by 2030. Investors play an important part in influencing companies towards defossilization. However, without scientifically verified carbon removal simultaneously being built at scale, we lack the ability to mitigate residual emissions or react to a temperature overshoot of the 1.5c target.”

Prof. Myles Allen, co-author of the Oxford Principles for Net Zero Aligned Carbon Offsetting, comments: “Every year we fail to reduce emissions makes it even more inevitable that we will need large-scale removal and permanent storage of carbon dioxide to meet our climate goals. It is morally imperative that those continuing to deplete the rapidly diminishing remaining carbon budget – which includes us all – invest in removals with permanent storage as well as taking action to reduce their own emissions.”

Zeke Hausfather, Climate Research Lead at Stripe comments, "Mitigating climate change requires putting emission reductions front and center. But there is no avoiding the need to remove billions of tons of carbon dioxide every year by the middle of the 21st century if we want to meet our most ambitious climate goals. We cannot simply sit back and assume that ways of removing CO2 will appear out of thin air in the decades to come. By encouraging companies to start supporting permanent carbon removal today, we can ensure that we are in a good position to make net-zero a reality, stop the world from continuing to heat up, and give ourselves the tools to ultimately reverse global warming in the future."

Christoph Beuttler, Chief Climate Policy Officer at Climeworks comments, “Separate targets for carbon reductions and carbon removals with long-lived storage should be established based on scientific consensus of the path towards the Paris temperature goals. The complementary mitigation approaches both need to be strengthened urgently.”

Philip Moss, Chairman of the NextGen CDR Facility and Global Director for Tech Removals at South Pole, adds “Net Zero targets cannot be met without decarbonizing in parallel with immediate scaling of CDR capacity through the purchase of long-term carbon removals. We call on investors, the voluntary carbon market, and policy makers to align on dual targets that can incentivize the removal of carbon today while continuing to support the reduction of emissions moving forward”. 

Robert Höglund, carbon removal consultant and manager of Milkywire Climate Transformation Fund says, “All companies that plan to use removals to reach net zero in the future should spend a portion of climate budgets on it today. Otherwise, it might not be available when needed.” 

Ben Rubin, Executive Director, Carbon Business Council says, "Carbon removal works in tandem with the crucial work of reducing emissions. But carbon investments can't wait: investments are required today to ensure that there is a robust menu of options for net zero and net negative portfolios as we look toward 2030 and beyond." 

Signatories to the letter:




The NZAOA is a member-led initiative of institutional investors committed to transitioning their investment portfolios to net-zero GHG emissions by 2050. The Alliance members were the first in the financial industry to set intermediate targets (aligned with the Paris Agreement schedule) and they report on their progress annually.

Carbon removals are covered in page 10 of the Target Setting Protocol report: Investee companies shall only incorporate carbon removal certificates with long-lived storage (as defined by the Oxford Principles). Alliance members shall require investee companies to obtain independent broadly accepted verification.

The UN Environment Program Finance Initiative news announcement of the NZAOA Target Setting Protocol update can be found h​ere.

Prof. Myles Allen, Chair of advisory board dubbed by the BBC as ‘the physicist behind net zero’, has been working on understanding and quantifying the drivers of climate change and extreme weather since the early 1990s. He is currently Professor of Geosystem Science in the Environmental Change Institute, School of Geography and the Environment and the Department of Physics, University of Oxford and Director of the Oxford Net Zero initiative.

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