In Short : Japan’s Sumitomo Corporation is placing a strategic bet on carbon removal by making an investment in Norway. This move reflects Sumitomo’s commitment to initiatives focused on removing carbon from the atmosphere, showcasing their dedication to sustainability and environmental responsibility.
In Detail : Trading house seeks to capture CO2 from the atmosphere to sell as offsets
TOKYO : Japanese trading house Sumitomo Corp. seeks to lock away carbon dioxide from the atmosphere and sell the resulting credits to CO2 emitters starting in 2025 in a new business that has seen it invest in a Norwegian company, Nikkei has learned.
Sumitomo recently took a small stake in Oslo-based Inherit Carbon Solutions, whose operations include removing CO2 emitted by biogas plants that produce biomethane from manure and other waste. The captured CO2 is stored underground.
The size of the stake has not been disclosed.
Sumitomo will seek to expand the carbon removal business and may invest in other players in this field. U.S. and European companies are among those active in developing ways to take CO2 directly out of the atmosphere, some of which use special materials designed to absorb the gas.
National targets for net-zero CO2 emissions will be difficult to achieve with reductions by companies and households alone. The International Energy Agency estimates that to reach net zero in 2050, billions of tons of CO2 would need to be removed from the atmosphere.
Sumitomo will sell credits from carbon removal to companies that want to offset their emissions. Microsoft is among the companies that have carbon removal deals with Inherit.
Sumitomo aims to handle 2 million tons of CO2 a year in 2030, which would make it one of the biggest Japanese companies in market for carbon removal credits. Two million tons of CO2 is equivalent to a year’s worth of household emissions from northern Japan’s Iwate prefecture, which has a population of nearly 1.2 million.
Credits derived from carbon removal now trade at $300 to $1,800 a ton.
U.S. and European multinationals are among the biggest buyers of such credits as they seek to offset their emissions. Microsoft has deals to buy 3.1 million tonnes worth, while Airbus has an agreement to buy 400,000 tonnes.
Among Japanese companies, All Nippon Airways has announced plans to buy a total of more than 30,000 tons of credits over three years starting in 2025.
The voluntary carbon market — where credits are bought and sold to offset emissions — is expected to reach between $10 billion and $40 billion by 2030, according to Boston Consulting Group.