This week, high-quality carbon dioxide removal (CDR) facility NextGen welcomed a major new buyer for its curated portfolio of durable CO2 removal projects.
Japanese megabank Mizuho Financial Group, the world’s 15th largest bank with assets totaling $2 trillion, has become the latest buyer of carbon removal through NextGen.
Happening at a time when securing carbon removal funding still poses a challenge for many in the industry, this landmark partnership signals trust in this rising decarbonization sector, setting an example for other businesses and organizations to include CDR into their sustainability strategies.
NextGen, a joint venture between South Pole and Mitsubishi Corporation, offers its clients access to high-integrity CDRs delivered by solutions that successfully store carbon for more than 1,000 years at an average price of $200/tonne.
Patrick Bürgi, Chairperson of NextGen and Managing Director Japan / Co-Founder at South Pole, shared that NextGen, South Pole, and Mitsubishi Corporation are delighted to welcome a globally leading financial institution like Mizuho among the list of CDR buyers.
He stated, “Carbon dioxide removals are critical to climate action, now more than ever. We need more institutions entering the market from every angle. Meanwhile, NextGen remains committed to upholding high integrity and low risk through our diversified portfolio approach.”
Shinichi Tsunoda, operating officer & general manager of Mizuho Financial Group, Inc., commented, “For Mizuho, participating in the early NextGen initiative as a buyer constitutes our first step into the technology-based CDR field at the core of decarbonization.”
“Going forward, Mizuho will positively contribute to the broader implementation of technologies that will further technology-based CDR in Japan, as well as to the commercialization of the CDR field.”
Following the announcement of this deal, our team had the chance to ask Megan Kemp, Global Head of Strategy at South Pole and NextGen CDR, a few questions around this milestone development and future vision of CDR.
Carbon Herald: What are your expectations for 2025 in terms of CDR purchases? Do you expect more companies to make the same move as Mizuho?
Megan Kemp:
2025 is set to be a pivotal year for carbon dioxide removal (CDR), with corporate purchases continuing to accelerate. According to CDR.fyi, purchases of durable CDR grew 78% in 2024, and deliveries rose by 120%. This trajectory suggests that demand will continue to grow as companies recognize the importance of securing high-durability removals early, however the decline in the number of unique buyers (down 18%), mean there is still significant work to do to support bolder corporate engagement.
NextGen CDR expects to see more companies following in the footsteps of Mizuho and other early movers. Organizations are increasingly driven by a combination of factors: mitigating regulatory risk, building sustainable branding, and strategically investing in a market expected to expand significantly in the coming decades. We are already witnessing increased participation from financial institutions, consulting firms, and industrial players who are locking in high-quality supply ahead of anticipated regulatory shifts.
Commenting on the recent inclusion of carbon dioxide removal in the draft version of the Corporate Net-Zero Standard V2 released by the Science Based Targets Initiative (SBTi), Megan states,
While we welcome SBTi’s inclusion of near- and long-term removal targets for Scope 1 emissions and believe it will improve market signalling on demand, there is room for much greater ambition in this area. This is a step in the right direction, but not yet a breakthrough moment for durable carbon dioxide removals (CDRs).
To drive real progress, these targets must be made more specific and actionable, ensuring companies address their ongoing and residual emissions while investing in the critical, future removal infrastructure we need – today. Let’s also not forget that both nature-based and technological removals are critical for achieving long-term climate goals and resilience.
Relevant: SBTi Opens Door To Carbon Removal, Releases Net-Zero Standard For Public Consultation
However, voluntary demand alone will not be sufficient to scale to the levels required by 2050. Government action remains crucial in setting clear compliance signals and de-risking investments in CDR.
NextGen CDR continues to work with policymakers in the US, EU, Japan, and the UK to ensure that robust and scalable policies support the long-term growth of this market.
Governments such as the US, Canada and Denmark have committed to purchase CDR, which we will see come to fruition in 2025, and potentially drive a wave of follow-on investment in government diligenced projects.
In 2025, we anticipate further momentum as more companies recognize that CDR is not just a cost but a strategic investment in a net-zero future.
What changes need to be made within the carbon removal sector to stimulate bolder corporate CDR investments?
To unlock bolder corporate investments in carbon dioxide removal (CDR), several critical barriers must be addressed:
- Cost Sensitivity: Corporates remain highly price-sensitive to technological CDR solutions, with the 2024 average price at $350/t. Large-scale adoption will require cost reductions, making investment in scaling efforts over the next 1–3 years essential. Governments play a crucial role in accelerating cost declines through subsidies, innovation funding, large-scale procurement, and contracts for difference.
- Unclear Corporate Claiming Guidance: The inclusion of interim targets for permanent CDR credits in SBTi’s draft Corporate Net-Zero Standard Version 2.0 is a step in the right direction. However, it is essential to extend this to Scope 2 and 3 emissions to ensure meaningful corporate action today and drive market scale.
- Slow Compliance Market Integration: Technological CDR will remain expensive and below the necessary scale unless fully integrated into compliance markets. While the UK, EU, and Japan have committed to including tech-based CDR, progress has been slow. Speeding up this transition is key to creating long-term demand signals.
- Market Complexity and Trust: With over 30 standards, 100+ methodologies, and multiple overseeing bodies, navigating the CDR market remains challenging. The introduction of the ICVCM’s Core Carbon Principles will help establish clarity on high-quality standards, while the EU’s development of BECCS and DACS methodologies under the CRCF will provide a critical baseline for voluntary and compliance markets.
Looking ahead to 2025, we see a clear path to overcoming these barriers. The speed of change will be the decisive factor in driving stronger corporate commitments and accelerating the scale-up of high-quality CDR solutions.
Do you notice a specific company profile among your clients? Are NextGen services procured by specific industries?
NextGen CDR Facility’s clientele spans a diverse array of industries, reflecting a broad commitment to carbon removal across the corporate spectrum.
Our founding buyers include Boston Consulting Group (management consulting), LGT (private banking and asset management), Mitsui O.S.K. Lines (shipping and logistics), Swiss Re (insurance), and UBS (financial services).
The addition of Mizuho Bank, a prominent financial institution, further underscores the financial sector’s proactive engagement in carbon removal initiatives.
This diversity among our clients indicates that NextGen’s services are not confined to specific industries; rather, they appeal to organizations across various sectors that are committed to achieving net-zero emissions, collectively scaling the market and addressing climate change through durable carbon removal solutions.
Are there other CDR collaborations in the pipeline that would further enrich the NextGen portfolio?
NextGen will complete its diversified portfolio of high-quality, permanent carbon dioxide removals in 2025. We will be contracting several new long term offtakes from a range of technology types and geographies, which will announce throughout the year.
By increasing the number of long term offtake agreements we enter in to, we are able to stimulate the CDR market by:
- enabling projects to become bankable and attract the necessary project financing for their CapEx intensive projects.
- creating the bridge demand for projects where the service currently is not valued.
Read more: In A New Deal, NextGen Purchases Biochar Removals From Exomad Green With dMRV By Carbonfuture
