“We Need The Carbon Removal Market To Scale To Withstand Demand Expected By 2050” – Bojana Bajzelj, Head of Climate, Supercritical

"We Need The Carbon Removal Market To Scale To Withstand The Level Of Demand Expected By 2050" - Bojana Bajzelj, Head of Climate, Supercritical - Carbon Herald
Credit: Supercritical

Emission reductions and carbon dioxide removal are needed to develop and scale hand in hand in order to curb climate change. Supercritical is a company that helps clients achieve results in both directions. It offers carbon accounting services, making it easier for companies to measure their carbon footprint, and a carbon market, providing access to critical carbon removal solutions.

We interviewed Bojana Bajzelj, Head of Climate at Supercritical, that shed light on important topics like IT companies’ net zero journeys, the current state of development of CDR solutions, and how Supercritical is helping them reach scale.

What is Supercritical? Can you tell us more details about the story of the company, how it was founded and why?

Since Supercritical was founded in 2021, its mission has remained to scale the carbon removal market. 

We help businesses measure their emissions, define their strategy of achieving net zero, find the right emission reduction actions they can apply, and purchase high-quality carbon removal credits. 

Our two founders are experienced tech entrepreneurs, who both feel very passionate about climate change. They wanted to apply their experience to the climate sector and build a company that uses tech and software capabilities to remove the barriers that make it difficult for companies to take strong climate action. 

Supercritical replaces the more conventional consultancy style of work, where processes are ad hoc and lengthy with easy-to-use marketplace software. Companies no longer need their own sustainability teams to figure out the complex climate jargon that comes with tackling debcarbonization – we do it for them. 

Great, what is your business model? 

It has two components – one is the carbon accounting component that involves net zero strategy planning and emission reduction recommendations, and the other is the carbon removal marketplace.

My role in the marketplace business entails vetting the carbon removal projects we work with to ensure the solutions we’re offering are high quality. 

So Supercritical only vets the projects, but doesn’t take part in their development, right?

That’s right. Supercritical currently vets the projects and sells their credits, but we also try to understand what projects need in order to scale up faster, whether it’s financing, access to market or understanding of the standards and carbon market landscape. We are hoping to work closer with projects in the future so that we can help them more directly in their efforts to scale.

One question I have is on the carbon accounting side. I’ve heard from some of the people who are developing such software that it’s really challenging to find reliable data that will empower them to calculate the carbon footprint. Do you agree with that statement and if yes, how do you overcome this issue?

It’s definitely challenging, I’ve been in the sustainability and climate field for about 15 years and it’s always been a challenge. 

At Supercritical, we’ve had to be pragmatic and figure out which data points we really need and how we could ensure these were accurate. 

Relevant: New Carbon Removal Marketplace Supercritical Goes Live

We follow industry guidelines, the Greenhouse Gas Protocol. While it wasn’t written with tech or professional services companies in mind, we’ve developed our own benchmarks that take tech emissions into account. For example, tech companies are often heavy emitters, and for many, most emissions come from their supply chains. 

The world is still figuring out the best ways to measure emissions accurately. Data is challenging, but there are ways of surmounting that and that’s what one of our main goals at Supercritical is – the data already exists, it’s just knowing how to get to it.

We know how much we pay for electricity as we have the kilowatt hours on the bills, we know how much we spend on other goods and services, and we know who the suppliers are. It’s a matter of pulling all that data together in a smart way. 

Credit: CHUAN CHUAN | Shutterstock

That’s really the point, to improve measurement over time and know the areas where companies can actually make emission reductions. We try not to let perfect become the enemy of good or let finding the exact number delay us in helping a company take strong steps to reduce their emissions. 

What are the sources of data you use to calculate client emissions?

The way to calculate a carbon footprint is to simplify the company’s day-to-day activities and match that with the right emission conversion factor. The base of those emission conversion factors can come from the UK Government, which issues its own set of conversion factors every year. In addition, an increasing number of companies in the climate space are also publishing their own footprints on Carbon Disclosure Project, for example, which helps drive accuracy. 

What is your clients’ profile?

The first group of companies we focus on is tech companies, primarily because of our vision, which is to scale the carbon removal market. We know that leaders and employees within the tech sector value the importance of innovation, and we need natural early adopters to invest in early-stage carbon removal technologies to help bring them down the cost curve and make them accessible to more businesses.

We also work with larger corporations on direct-to-removal purchases. These customers have often already measured and reduced their carbon footprint, and are now looking to invest in carbon removal to remove their remaining emissions. 

Can you please give us an example of an IT company’s Scope 1,2, and 3 emissions? Where do the emissions normally come from and what do they usually do to eliminate them?

The first step is measuring your carbon footprint. For tech companies, the large majority of the emissions will be in Scope 3, so we recommend they speak to their suppliers and ask them if they’re measuring their footprint, and if so, what they’re already doing to reduce the emissions and what their net zero target is. 

We also encourage customers to set their own net zero targets, and are already seeing benefits of this combined approach.

We then look at the emission sources the companies can control themselves, such as business travel, which we always advise to limit to essential trips and via train whenever possible, and the food they provide to their employees. 

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Usually, the biggest sources of emissions for a mid-sized IT company are data centers, digital marketing, and energy used by employees when working from home. At Supercritical, we strongly encourage the inclusion of these Scope 3 emissions, like employees’ energy consumption while working from home, even though it’s only optional according to the Greenhouse Gas Protocol.

Just because a company closes its office doesn’t mean the emissions have disappeared, as employees still have to heat their homes for example while working from home, which they wouldn’t need to do if they were at the office. 

Once we’ve helped companies with carbon measurement and reduction, we then look at the next thing they can do in parallel with these efforts: Supporting carbon removal projects through the purchase of high-quality carbon credits.

Relevant: Top 10 Carbon Removal Marketplaces In 2023

We don’t think a company should only think about removal once it has reduced emissions. We need the CDR market to scale to withstand the level of demand expected by 2050, which means it needs investment now, and we simply cannot wait. 

We spent about 150 years getting really good at pumping fossil fuels out of the ground, burning them and putting them in the atmosphere. The burning part is easy, but getting them out of the ground was not that easy. Today, we need to go in the opposite direction – there is a lot of research and innovation driving the development of technologies that take carbon out of the air and put it back in the ground.

How easy is it for companies to reduce their emissions? Are they empowered now to completely do that or just a portion of it? What is happening in reality?

Right now, I think it would be very challenging for a company to try and fully reduce its emissions, which is why we look at the bigger picture and encourage each part of the supply chain to do what it can to take steps in the right direction. 

If you think about a data center provider or operator, it’s important that when they construct the data centers they use the best sustainability practices and switch to renewable energy, which many already have. Tech companies should look at how much computing power they require from the data centers to make sure the process is optimized and energy use is minimized. In doing so, we can reduce emissions significantly over time.

Which scope of emissions do companies usually see as most challenging to eliminate and what is included in it?

Scope 3 as that’s where companies have to rely on their suppliers to a large extent, and as I mentioned, we’re only really at the beginning of measuring that correctly and tackling that seriously.

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For Scope 3, the Greenhouse Gas Protocol has 15 categories, including everything a company needs to purchase to support its activities and production. Software companies for example need to purchase different hosting space and their products tend to be associated with significant emissions as computers use electricity.

What percentage of the client’s footprint is on average eliminated with the carbon removals?

Many of our customers are real pioneers when it comes to carbon removal purchases. We are very proud to say that several of our customers like Tide and Softwire have removed 100% of their emissions, and a few smaller customers have gone even further and purchased removal for their historic footprint.

This is in stark contrast to the majority of other companies that are only beginning to measure their emissions comprehensively, let alone purchase high-quality, durable carbon removal. Some companies purchase avoidance offsets, which don’t actually deliver on their net zero promise – they mean companies pay someone else not to emit while their emissions are still out there warming the planet. This is where we need to see radical change. 

Credit: Supercritical website

Normally, how it starts is, companies measure their emissions and create a long-term plan for how they are going to reduce them by 90%. They work on reductions and when they achieve them, then they purchase removals for the rest they can’t reduce. 

One thing missing from current guidelines is, before getting to net zero, how much carbon removals a company should purchase? We think it should be something otherwise we won’t have these removals out there. 

Typically a company’s annual emissions reductions will be between 5%-10% or 20%, although 20% is already really high. Very few companies are able to purchase now all that remains after this year’s reductions. However, as I said, there are some amazing climate leaders in the space that do remove the rest of it. 

But currently, for the majority of companies, the carbon removal purchases are zero. They purchase admission avoidance offsets or nothing, and very few of them are purchasing removals.

Credit: Vladimka production | Shutterstock

We think that will change as the guidance is very clear – the only offsets that will count at the end of the day when we get to net zero are permanent carbon removals. However, currently, they represent a drop in the ocean when you look at the whole voluntary carbon market.

What are some of the carbon removal solutions you offer?

Carbon removal technologies are broadly split into nature-based and tech-based solutions. We offer both types, although our specialty is on technological, durable carbon removal.

With nature-based solutions, nature does the hard work of getting CO2 molecules out of the atmosphere and storing them in the biosphere. It’s an amazing process that’s been helping slow down climate change thus far, and a process we should not take for granted. 

However, problems arise when the storage of CO2 molecules in the biosphere, for example in the trunks, roots and soil, is reversed, which can happen very easily. Take tree planting, the poster child of nature-based solutions. As trees grow they remove carbon through photosynthesis and store it in their biomass. When that tree dies, however, the carbon goes straight back into the atmosphere.  

Credit: Supercritical website

This is where technical and hybrid solutions step in. Biochar and bio-oil are removal methods where plants are still the ones doing the removing through photosynthesis, but the storage is technologically extended through a process called pyrolysis, which turns the easily degradable biomass into much more stable carbon, which can then be applied to soils, mixed into concrete, and in the case of bio-oil, even pumped into to geological reservoirs that used to hold fossil oil and gas. 

Another exciting method is enhanced rock weathering, which, as another hybrid method, uses the natural carbon removal process of geological weathering and speeds it up dramatically.

Finally, there are pure technological removal methods such as direct air capture where every step of the way, from pulling CO2 out of the atmosphere, preparing it for long-term storage and storing it permanently, is done through technology. As CO2 is relatively diluted in the atmosphere, you need large fans to move a lot of air over special sorbents that bind CO2. 

You then need energy to get the sorbents to release the CO2 and reactivate. This gives you CO2 of high purity which you can then pressurize and store in geological storage. Of course, each of these steps requires energy, which is why it’s important it’s renewable for it to make sense as a net removal option.

We offer all of these removal methods on our platform and are very excited to be adding some new approaches in the coming months!

Do your clients need to pre-purchase those carbon removal solutions, or are they available right away?

The credits are available right away. Some are ex-post, meaning the removal and storage has already happened, and some are ex-ante, where the removal will be delivered in a couple of years time. In any case, all removal credits go towards supporting the projects straight away.

Is there a carbon removal solution that is most suited right now to help IT companies in removing emissions? I mean in terms of availability, durability, price, etc.?

If you look at CDR.FYI, a community-driven platform to bring transparency and accountability to the carbon removal market, you will see that in addition to a large purchase of direct air capture offsets bought by an airspace company, biochar is the most popular, especially when you look at the removals that have already been delivered. 

Credit: Newjai | Shutterstock

This is because biochar is the cheapest, most mature method that is considered to be durable. 

It’s possible other removal methods will compete with biochar in terms of popularity and scale soon. I’m really hoping that other technologies will also come down in price as many haven’t yet been grown to a large, commerical scale. 

Supercritical’s vision is to realize 1 gigaton of CO2 removed from the atmosphere. How are you going to achieve that?

1 gigaton is our long-term ambition, but in order to achieve it, we need to focus on the here and now, as we’re at a critical point in the climate emergency. Durable removals need to grow to be able to deliver several gigatons per year by 2050, and the UNFCCC gives 500 million tonnes as an intermediate target for 2030. 

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If we want carbon removal on voluntary carbon markets, which delivered 40,000 tonnes in 2022 according to CDR.FYI to close this gap, it will require exponential growth between 3-4x every year, which is already very challenging and almost unprecedented. The course of action over the next few years will determine the trajectory of that growth, and if we’re lazy, it will become near impossible to catch up. 

The science is clear that we need to start scaling up carbon removal now. We really hope that standards such as the Science-Based Targets initiative will recognize this without further delay, and give clear guidance to companies accordingly, just as they do for emission reductions. Removal scaling strategy should be a part of every science-based climate target.

Coming back to Supercritical’s vision: We already represent 30% of all buyers of carbon removal and 32% of all delivered durable removal on the voluntary carbon market. If we retain our market share and grow with the market, we will play an important part in making 1 gigaton of removal happen over the next decade. 

I’m also wondering, is there a solution available right now that is able to scale on its own to a gigaton carbon removal capacity? And can it do it quickly enough so the world could be able to remove 10 gigatons of CO2 per year by 2050? Just wondering if that’s possible right now or is it something that might become a reality in the future if we continue working on it? 

I don’t think we’ll be able to rely on just one solution. We currently offer 5 on our platform, and there are probably going to be another 5 to 10 removal methods developed in the future. 

It has been established that each of the existing methods, not just by us, but by academics and the IPCC, provide half a gigaton to 2 gigatons of carbon removal. That means if we invest in all of them, there’s potential for us to reach 10 gigatons of carbon removal per year by 2050. That’s why we recommend a portfolio approach to our customers to ensure they’re helping each technology scale. 

Okay, that sounds encouraging! 

Yes, it is! However, these emerging technologies take time to get to a commercial stage as we need to make sure everything works before going to market. The key is creating market demand to drive new innovations, which is what we’re doing at Supercritical. 

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We don’t want suppliers to be held back by the thinking that the projects won’t be able to sell those credits. We want to prove there is strong demand for carbon removal to ensure there aren’t any obsticles slowing down innovation.

Do you also use a third party service for verifying and monitoring the credits, or do you do that internally?

That’s a good question. Supercritical verifies the projects in terms of the principles, but when it comes to retiring the credits, that’s done by Registries, some of which have their own standards. That means to be on the Registry, you need to fulfill certain criteria, we don’t offer Registry service ourselves.

And what is next for Supercritical? What is the next development we should be looking out for?

We just want to work with more customers to really educate them about both carbon removal and carbon emission reductions, and continue to form strong partnerships to help customers reach the goals set out in their net zero strategy. 

We also want to work with new suppliers and also offer new carbon removal solutions on our mission to scale the CDR industry, as we won’t beat the climate crisis without it.

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