Boston Consulting Group (BCG) has entered into a three-year agreement with carbon capture firm 1PointFive to purchase 21,000 tonnes of carbon removal credits generated from direct air capture – one of the most expensive forms of removing CO2 from the atmosphere.
BCG has been certified as carbon neutral since 2018, but recently made the decision to transition away from carbon credits to 100% carbon dioxide removals (CDRs) by 2030. The deal, through which BCG will buy credits generated by the STRATOS direct air capture (DAC) plant 1PointFive is currently building in Texas, is part of that strategy.
Price of direct air capture credits undisclosed
The price of CDRs under the agreement was not disclosed. Carbon removals were trading at an average of almost US$15 a tonne in 2023, but this classification also includes nature-based removals, which are generally sold at much cheaper prices than engineered removals such as direct air capture (DAC).
In May 2023, the International Energy Agency (IEA) estimated the cost of drawing carbon directly from the atmosphere at US$600 to US$1,000 per tonne.
Speaking to CSO Futures this month, BCG Chief Sustainability Officer David Webb had this to say about the firm’s carbon removal strategy: “We really are trying to make sure that we move into arrangements that we know are going to be real and really have the impact we want. And that's also, you know, you're gonna have to pay for that.”
BCG spent an average of US$16 per tonne on a portfolio made of 48% carbon removals in 2022 (most of it nature-based projects), but expects this cost to rise US$35 a tonne by 2025 and US$80 a tonne by 2030.
Accelerating direct air capture technology development
The agreement will also see BCG provide consulting services to 1PointFive, “including to develop business processes that support Direct Air Capture (DAC) CDR credits”.
Webb explains that BCG has already been supporting 1PointFive in designing the IT architecture needed for the Measurement Reporting and Verification (MRV, a process to quantify and verify emissions removals) of STRATOS.
BCG is a strong proponent of direct air capture as a climate solution, but believes the cost of the technology needs to go down to US$100-200 a tonne by 2050 to fulfil its potential.
By entering this agreement with 1PointFive, the consultancy is hoping to accelerate the development of the technology and send a strong demand signal to the market. “We have to be able to lead by example,” Webb added in conversation with CSO Futures.