Carbon Markets & Offsetting
Carbon removal credit
A carbon credit issued for actively removing CO₂ from the atmosphere — priced far above avoidance credits and increasingly mandated as the end-state of credible offset portfolios.
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A tradable credit representing one tonne of CO₂ removed from the atmosphere and stored, generated by removal activities such as reforestation, soil carbon, biochar, direct air capture or enhanced weathering. It contrasts with avoidance (reduction) credits, which represent emissions that never occurred. Removal credits are further differentiated by storage durability — from decades (forests, with reversal risk) to centuries or millennia (biochar, geological storage).
References
Four principles; transition from avoidance to removal to durable storage; 2020 origin, 2024 revision.
Indicative price ranges; removal non-negotiable for net zero; durability tiers.
Overview
What it means
The avoidance–removal distinction has become the market's central quality axis. The Oxford Principles for Net Zero Aligned Offsetting (2020, revised 2024) prescribe a portfolio transition: cut emissions first, then shift tonne-for-tonne compensation from avoidance credits toward removals, and toward removals with durable storage, reaching 100% durable removals for residual emissions at the net-zero date.
Market prices reflect the hierarchy: avoidance credits commonly trade in the US$5–20/tonne range while removal credits span roughly US$50 to over US$1,000 per tonne, and removal categories have held price premiums even as overall credit prices softened.
How it is used
Corporate buyers structure Oxford-aligned portfolios with forward offtakes for durable removals; standards (ICVCM CCPs, Article 6. 4) build removal-specific methodologies; disclosure regimes ask companies to separate removal from avoidance in claims.
Why it matters
Net zero is physically definable only with removals balancing residuals; the removal-credit market's scale-up — currently tiny relative to need — is a pacing constraint on every net-zero commitment.
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