According to the latest Global Risks Report 2023 from the World Economic Forum, failure to mitigate climate change remains the top global risk faced over the next decade. Keeping temperature rise within 1.5◦C above pre-industrial levels, as outlined in the Paris agreement, and preventing the worst impacts of climate change, will require us to reach net-zero emissions globally by 2050.
Combating climate change
Global emissions reductions are critically important to achieving net zero, but they are not sufficient alone. Most climate models demonstrate that strategies to limit global warming must also rely on substantial carbon dioxide removal (CDR). Even after we reach net-zero emissions, continued carbon removal would be needed to reduce the historic excess concentration of CO2 in the atmosphere, known as legacy emissions, to safer levels. Climate-modelling scenarios from the Intergovernmental Panel on Climate Change (IPCC) indicate a range of dependence on CDR—contingent upon the speed and scale of emissions reductions, among other factors. Globally, up to 10-15 gigatonnes (Gt) per year of CO2 will need to be removed from the atmosphere by 2050, with increased removal capacity up to 20Gt/year needed by 2100.
CDR has been around for decades and has largely been terrestrial-based, including initiatives such as reforestation, soil capture and direct-air capture. Yet according to Counteract, a London-based investment firm focused on carbon removal, by 2021 the combined effort of all CDR solutions in existence had reduced net carbon emissions durably across the globe by just 0.018Gt. This leaves the world with less than three decades to scale efforts by more than 500 times to reach the 10Gt/year CO2 needed (roughly equivalent to a 24% compounded annual growth rate). The scale-up challenge of CDR required to make a meaningful impact on climate and people is staggering and cannot be accomplished through existing CDR methods alone.
The ocean CDR opportunity
Enter the ocean and deep blue carbon. The ocean is the largest carbon storage sink on Earth: it stores 45 times more carbon than the atmosphere, and 20 times more than land plants and soil combined. The ocean has already absorbed 40% of fossil-fuel emissions and 90% of excess heat, and it continues to absorb 30% of excess carbon dioxide emissions annually.
Deep blue carbon refers to ocean carbon found seaward of coastal ecosystems supported by mangroves, seagrasses, seaweeds and kelp beds—these are currently referred to as blue carbon or coastal blue carbon ecosystems. By contrast, deep blue carbon includes carbon contained in continental shelf waters, deep-sea waters and the sea floor beneath them, amounting to approximately 90% of global carbon stores.
Ocean-based CDR—commonly referred to as marine CDR (mCDR)—is a suite of methods that either amplify or accelerate the ocean’s natural processes, be they biological, physical or chemical, to reduce carbon in the atmosphere and safely store it in the ocean. Examples of mCDR approaches include ocean alkalinity enhancement, artificial downwelling, electrochemical techniques, ocean fertilisation and artificial upwelling. Mike Kelland, chief executive officer of Planetary Technologies, a carbon removal technology company, explains, “Planetary’s simple CDR approach uses a pure antacid to neutralise CO2 in the ocean—a process that leads to carbon being drawn out of the air and stored permanently in ocean chemistry.”
“While many mCDR methods are being tested close to shore, scale-up will likely require moving into larger, and deeper, ocean systems – a huge challenge”, according to Dr. Anya Waite, Associate Vice-President Research (Ocean) of Dalhousie University and Scientific Director and CEO of the Ocean Frontier Institute. “This will require significant reduction in measurement uncertainties to support environmentally sustainable deep blue carbon-based mCDR” Given the uncertainties associated with most mCDR approaches applicable to deep blue carbon, estimates of their cumulative potential for carbon sequestration vary significantly—ranging from conservative estimates of around 1Gt/year CO2 to a theoretical cap of multiple Gt/year CO2. Deep blue carbon-based mCDR offers the potential to substantially narrow the necessary carbon-sequestration gaps because of its high potential volume and durability. While accelerated and scaled research with field trials is required to better understand and quantify its impact, deep blue carbon offers other strategic advantages, such as limited land-use conflicts, being more equitable for developing nations, and potential for greater economies of scale.
It’s important to differentiate deep blue carbon from blue carbon. Blue carbon offers many compelling benefits, such as strengthening coastal resilience, improving biodiversity, safeguarding the socioeconomic well-being of coastal communities and safely protecting the substantial quantities of legacy carbon already removed from the atmosphere. However, from the perspective of net-new-carbon sequestration, deep blue carbon offers an estimated 10-20 times higher potential than blue carbon to achieve net-zero goals.
“The ocean holds massive potential for helping to reverse climate change,” says Stacy Kauk, head of sustainability at Shopify, an e-commerce firm. “It doesn’t compete with arable land and often has low energy requirements and relatively low capital expenditure, which makes ocean-based carbon removal highly scalable. This is a critical component of the solution set.”
mCDR approaches that leverage the deep blue carbon are an important tool to add to the arsenal of solutions required to combat climate change, along with essential global emissions reductions, existing CDR approaches and blue carbon.
Deep blue carbon-based mCDR also offers a tremendous economic opportunity. Using a high-level value chain (see figure 1) as a framework for analysis, there is a strong monetisation opportunity for each component of the value chain. Each offers a distinct market opportunity, risk/reward profile, investment horizon and funding need. For instance, companies generating credits from deep blue carbon s—such as Planetary Technologies, Captura, Ebb Carbon and Running Tide—leading development of distinct mCDR approaches can generate a significant amount of high-quality carbon credits which can likely be sold at a much higher premium than lower-durability carbon credits.
Private companies working in ocean data, measurement, reporting and verification (MRV) and ongoing monitoring can sell their products and services for a fee. Companies enhancing the market structure and providing liquidity to voluntary carbon markets can gain financially as the volume and prices of carbon credits transacted increases, either via primary issuance or secondary trading. Voluntary carbon markets are currently valued at around US$2bn, with their value quadrupling between 2020 and 2021 and estimated to reach U$50bn-60bn by 2030. At the future forecast price of $100/tonne of CO2, deep blue carbon credits have the potential to dwarf the existing market by adding anywhere from hundreds of billions to a trillion dollars in value each year.
Deep blue carbon-based mCDR is still in its infancy and requires significant advancement in, and funding for, each of the value-chain components. There are strong interdependencies between each of the components, and they must all be functioning efficiently to realise the climate impact and economic opportunity. Companies generating Deep blue carbon credits can’t effectively monetise the credits generated until there are baseline measurements, standards, MRV and ongoing monitoring capabilities that can credibly measure the amount of carbon sequestered and its durability. Standards and baseline measurements, in turn, have strong interdependencies, since both require more research into ocean science and enhancements to current observations and numerical biogeochemical models to better understand the current and predictive state of the ocean and carbon cycles.
Current voluntary carbon markets cannot effectively handle the amount of carbon credits that can be generated through deep blue carbon-based mCDR until they have the sophistication and maturity that participants expect in markets of traditional asset classes such as equities, fixed income or foreign exchange. Current international governance frameworks are poorly suited to regulate deep blue carbon, and domestic laws are constraining for private entities engaging in activities in coastal and Exclusive Economic Zones.
According to Mike Kelland of Planetary Technologies, “In order to hit climate targets, CDR needs to scale to be among the largest industries that the world has ever seen, within the next 27 years. As a result, solutions that use the ocean, the Earth’s largest carbon reservoir, require large, rapid and sustained investment".
Despite the structural impediments, several positive developments are helping to accelerate the development of deep blue carbon-based mCDR:
- an advance market commitment to buy an initial US$925m from Frontier, a public benefit corporation owned by tech firm Stripe, besides investments in several deep blue carbon companies;
- the release of a CDR verification framework by non-profit CarbonPlan to better understand the confidence level in verification of different mCDR approaches;
- the recent issuance of a potential CDR science strategy from the US National Oceanic and Atmospheric Administration (NOAA) and the proposed development of the North Atlantic Carbon Observatory (NACO) from Canada’s Ocean Frontier Institute to improve the science and baseline measurements required for both improved climate forecasts and scaled MRV;
- active efforts to enhance MRV by organisations such as the US Advanced Research Projects Agency–Energy (ARPA-Energy);
- the European Union’s proposed draft Carbon Removal Certification Framework regulation to provide the critically important building blocks for scaling CDR; and
- the emergence of bodies such as the Integrity Council to build strong credibility across CDR standards.
Organisations such as the National Academies, World Resources Institute, NOAA and Ocean Visions have performed detailed analysis and laid out recommended pathways for each distinct mCDR approach and the overall deep blue carbon market. “Carbon removal at an enormous scale is an imperative, and we are racing against the clock to develop mCDR technologies that can meet the immense physical requirements while protecting other societal values,” says Brad Ack, chief executive officer at Ocean Visions. “The ocean has great potential to help in this challenge, through bio- and geo-mimicry, and we need to urgently accelerate and scale the in-water testing of all ocean pathways to quickly determine which offer the highest efficacy in slowing and ultimately reversing the climate crisis, and to heal the ocean as well.”
Much remains unknown about deep blue carbon-based mCDR. We need a science-based, research-led, iterative and adaptive approach that better understands the potential and the risks relating to deep blue carbon-based mCDR and strikes the optimal balance between the urgency of combating climate change, the importance of protecting our natural resources, and realising the economic opportunity. And most of all, we need to increase awareness, dialogue and engagement about deep blue carbon among all key stakeholder groups.
As business strategists, we are excited about the largely untapped economic opportunity that deep blue carbon-based mCDR offers. As parents, we are excited about the potential for deep blue carbon-based mCDR to help mitigate climate change and leave a healthier planet for our children.