Danish state-controlled utility Orsted and UK utility Drax are increasingly dependent on sustainability criteria for their revenue streams from carbon removal (CDR) credit sales from bioenergy with carbon capture and storage (Beccs) projects, delegates heard at the Argus Biomass conference in London last week.
"The key to be able to create such a project is to secure finance, which actually comes from the sale of carbon removal certificates," Orsted senior lead business developer for CCS David Fich said. Adding that the ability of companies to prove the sustainability of the biomass they source was now key to securing financing — including from CDR — for Beccs, and not only a matter of communicating that bioenergy and Beccs were environmentally friendly and carbon neutral businesses.
Drax commercial director Angela Hepworth agreed: "Sustainability here is not a nice-to-have, this is the very foundation of our licence to upgrade and our ability to sell the credits and enable us to progress in these projects."
Aligned standards within the industry and stronger incentives would encourage corporates to buy carbon credits against reputation backlashes, Hepworth added.
Drax and Swedish utility Stockholm Exergi commissioned a methodology for measuring the net CO2 removal through Beccs published in October 2023, which was overall well-received by market participants. The utilities also presented it to the European Commission in the same month.
A standardised approach to Beccs would encourage smaller buyers, which rely on certifications to identify the sustainable criteria of the carbon removal value chain when purchasing CDR credits, Fich said. While most larger corporates were doing their own due diligence.
"The smaller buyers are those that are able to pay more," Fich said, adding that these companies were necessary to improve the liquidity of the market.
Orsted signed a contract with Microsoft in May 2023 for the purchase of 2.76mn t of carbon removals over the next 10 years. Drax is also selling CDR certificates in the voluntary carbon market and is hoping to get the credits into the UK's trading scheme.
Such deals "will help to make Beccs credits be seen in the more mainstream markets," Hepworth said.
