UBS signs 10-year dear with Climeworks on carbon removals programme
Banking giant UBS has signed a 10-year agreement to support the scale-up of direct air capture carbon removal technologies from Climeworks, as it builds towards its net-zero target for 2050.
The 10-year agreement between UBS and Climeworks will see the banking firm utilise direct air capture technology to help offset emissions as part of its net-zero strategy.
UBS has made a net-zero commitment for 2050 through its involvement with both the Net-Zero Banking Alliance and the Glasgow Financial Alliance for Net-Zero (GFANZ). As part of its net-zero commitment, UBS has committed to reduce energy consumption by 15% from 2020 levels by 2025 and to offset its historical emissions from its operations back to 2000.
UBS will also reduce absolute financed emissions from loans provided to fossil fuel companies by 71% by 2030.
UBS’s group executive board lead for sustainability and impact and president asset management, Suni Harford said: “Innovative technologies play an increasingly important role in the transition to a low-carbon economy.
“By collaborating with neustark and Climeworks, UBS wants both to further reduce our own carbon footprint and, crucially, to support the development of scalable solutions that the world needs to achieve net-zero emissions by 2050.”
Offsets are a contentious part of corporate net-zero targets, with some firms being accused of overtly relying on offsets and removals over actual emissions reductions. However, the IPCC estimates that by mid-century, 3-12 billion tons of CO2 will need to be removed from the air every year in order to reach the 1.5C goal.
Carbon removal markets
Climeworks is accelerating its direct air capture removal scale-up. Climeworks recently broke ground for its Mammoth direct air capture and storage facility. The facility is expected to have a nominal capture capacity of 36,000 tonnes annually once fully operational. It builds towards the company’s plans to deliver a gigaton capacity by 2050.
Climeworks corporate partners include UBS, Stripe, Klarna, LGT and Square Inc.
The announcement comes following new research that warned that natural and engineered emissions removal systems will need to scale up to enable 3.5 billion tonnes of removals annually by 2030, to give the world the best chance of limiting the global temperature increase below 1.5C.
The report from the Energy Transitions Commission (ETC) think-tank argues that, even if “deep” decarbonisation is achieved, the world will need to rapidly expand its carbon dioxide removal capacity by investing in a mix of nature-based, engineered, and hybrid solutions.
It outlines how, even if the “fastest feasible path of emissions reductions” was delivered, at least 70 billion tonnes of carbon removals will likely be needed between 2022 and 2050 to help ‘net’ residual emissions and to begin pushing climate tipping points back. But the ETC estimates that, on the current path of emissions reductions accounted for by national commitments, at least 165 billion tonnes of carbon removals will likely be needed – cumulatively – by mid-century.
For context, the current voluntary carbon market is believed to be delivering just 10 million tonnes of removals annually. The agreements to regulate and scale the market forged at COP26 will doubtless contribute significantly to increasing that number.
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