World's Largest Carbon Removal Agreement Announced at New York Climate Week
Drax, a renewable energy pioneer and biomass pioneer, has signed a Memorandum of Understanding (MoU) with Respira, which could lead to the largest volume of carbon dioxide removals (CDRs) traded globally to date.
Under the terms of the MoU, Respira, an impact-driven carbon finance company, will be able to purchase up to 2 million metric tonnes of CDRs from Drax over five years. The creation of the CDRs would be tied to Drax's planned deployment of BECCS in North America.
Drax already plans to invest more than £2 billion in its UK BECCS project and global supply chain by 2030, to remove 8 million metric tonnes of CO2 from the atmosphere each year. Furthermore, it is exploring investment plans for BECCS projects outside the UK, particularly in North America, which could remove an additional 4 million metric tonnes of CO2 from the atmosphere each year.
BECCS is a key technology that is necessary around the world since it is the only one that can offer stable, renewable power, thereby boosting energy security while permanently removing carbon dioxide from the atmosphere.
Will Gardiner, Drax Group CEO, said:
“This agreement with Respira will play a pivotal role in the development of voluntary carbon markets globally and the deployment of BECCS.
“The clear demand that we are seeing for engineered carbon removals, alongside the policies being developed by progressive governments in the US and UK to support BECCS, will enable the investment needed to kickstart a vital new sector of the economy, creating tens of thousands of jobs, often in communities which need them the most.
“BECCS in the US has the potential to offer a game-changing contribution to the fight against climate change, provide energy grid stability to those areas which need it most and also revolutionise the way companies approach decarbonising their operations. Drax aims to be a global leader in the deployment of BECCS and our deal with Respira is a landmark moment for our business as well as the fight against climate change.”
Respira invests in high-quality carbon credits to free up funds for the development and acceleration of carbon reduction and removal projects around the world.
Ana Haurie, Respira International CEO and co-founder said:
“Rising global temperatures underline that it is absolutely vital for corporates to augment existing carbon emissions strategies with further solutions to address the climate emergency. This partnership with Drax marks a new and exciting development for Respira as it is our first engineered carbon removals project.
“We are proud at Respira to be leading the way in the voluntary carbon market, supporting companies in their mitigation strategies by providing high-quality carbon credits. The deployment of critical technologies like BECCS by Drax, and the resulting engineered CDRs, very much have their place as an important instrument in the value chain management which supports corporate action”
In the United States, the $739 billion Inflation Reduction Act, the country's largest investment in climate action in history, includes increased support for carbon removal technologies. In addition, a recent report from the National Renewable Energy Laboratory (NREL) emphasised the relevance of BECCS in meeting the United States' aim of 100% clean electricity by 2035 and the need for BECCS to do so.
Supportive regulatory frameworks for CDRs, including BECCS, are being developed at the state level, including in California, Louisiana and Texas.
Respira would be entitled to purchase CDRs produced by Drax in North America under the provisions of the MoU, receiving up to 400,000 metric tonnes of CDRs per year over five years to sell on a voluntary carbon market.
This would enable buyers, such as corporations and financial institutions, to achieve their own carbon emissions reduction targets.
The MoU between Drax and Respira supports a roadmap to secure binding commitments before a future final investment decision is made.
Since announcing its ambition to deliver 4 million metric tonnes of CDRs from BECCS in locations outside the UK, Drax has been working on models for developing BECCS projects, primarily in North America.