Swiss Re turns to Climeworks' direct air CO2 capture to meet net-zero goal
Swiss Re has signed a ten-year agreement with carbon capture tech firm Climeworks, under which it is purchasing carbon removals from direct air capture (DAC) facilities and the associated carbon storage.
The insurance, reinsurance and risk knowledge giant committed in 2019 to achieving net-zero operational emissions by 2030. It has a target to produce 21% less annual operational emissions this year than in 2018, as it works to develop science-based targets for further reductions. But removing any residual emissions has always formed part of Swiss Re’s plans for “netting” operational emissions.
To that end, the partnership with Climeworks will see Swiss Re directly buying tonnage removal of carbon through DAC technologies. Climeworks has not yet revealed whether the removals will come from new or existing facilities, or a mix. It currently operates 14 DAC facilities, one of which is commercial scale. A second commercial-scale plant, called ‘Orca’, will launch in Iceland next month.
Climeworks’ technology works by drawing air into a collector with a fan. Inside the collector, CO2 is filtered out. When the filter is full, the collector is closed and heated to release the CO2, ready for concentration and storage. The carbon associated with developing and operating the DAC facilities, Climeworks claims, is typically equivalent to 10% of the carbon that will be captured. This calculation considers the fact that the facilities are powered by geothermal energy.
Swiss Re is investing $10m in the agreement, which covers the storage of carbon as well as its initial removal. Climeworks claims its storage solution is “permanent”; captured carbon is stored underground in basaltic rock.
"To mitigate the risks of climate change, the world needs to scale-up carbon removal on top of, not instead of, emission reductions,” Swiss Re’s group chief executive Christian Mumenthaler said.
“By partnering with Climeworks we can play to our strengths in this endeavour, as a risk-taker, investor, and forward-looking buyer of climate solutions”
While Climeworks is working with a string of other big-name businesses, including Audi, Microsoft and Stripe, it claims that the deal with Swiss Re is “so far unrivalled in the voluntary carbon market for this type of innovative high-quality carbon removal”, in terms of both the partnership’s length and value.
Climeworks said in a statement that the agreement is “providing a structure for interested buyers to enter into similar purchase agreements”, “sending a key demand signal to carbon removal solution providers and investors”.
The news comes shortly after Virgin Atlantic signed on as an early customer for a new DAC facility, planned for Northeast Scotland by carbon capture and storage (CCS) firm Storegga.
Globally, the collective capacity of all operational CCS and carbon capture and usage (CCU) plants is estimated to be 38.5 million metric tonnes. These arrays are addressing less than one-thousandth of global emissions annually, which now exceed 50 billion tonnes. Proponents of CCS and CCU claim the market and installed capacity is growing rapidly.
edie recently published a feature exploring the extent to which man-made carbon removal technologies will be used in the global transition to net-zero, given their numerous drawbacks. The feature also explores the pros and cons of nature-based carbon sequestration solutions such as tree planting. You can read that piece here.
Additionally, edie hosts a free-to-download guide on carbon capture, utilisation and storage (CCUS), in association with Carbon Clean. You can access your copy of that guide here.
Swiss Re’s broader climate plans
It is understood that the DAC agreement with Climeworks will cover Swiss Re’s operational emissions. But the firm, like others in its sector, is also facing pressure to address financed emissions, which are usually far fighter than operational emissions.
March 2021 saw Swiss Re announcing a new set of climate targets, including a pledge to reduce the carbon intensity off financed emissions by 35% by 2025 – a target it claims is aligned with the Paris Agreement’s 1.5C portfolio. The target covers corporate bonds and Swiss Re’s listed equity portfolio, as well as its direct real estate portfolio.
A key part of delivering this reduction in the energy sector will be a phased exit from coal investments. Swiss Re is working towards a complete exit from thermal coal in OECD nations by 2030 and a complete global exit from thermal coal by 2040.
Since the new targets were set, Swiss Re has joined the UN-convened Net-Zero Insurance Alliance. Members are compelled to reach net-zero operational emissions by 2030 at the latest and net-zero financed emissions by 2050. Other members include AXA, Allianz, Aviva, Generali, Munich Re, SCOR and Zurich.