What is carbon dioxide removal (CDR) and why is it important?

Carbon dioxide removal refers to technologies that physically extract CO₂ from the atmosphere and store it permanently. Unlike emission reduction, which prevents new carbon from entering the air, CDR actually removes existing carbon. It's becoming essential because even with aggressive emission cuts, we'll need to remove billions of tons of CO₂ to meet climate goals. Companies in this portfolio specialize in making this removal scalable and economically viable.

What is direct air capture (DAC)?

Direct air capture is a technology that pulls carbon dioxide directly from the ambient air using chemical reactions. The captured CO₂ can then be permanently stored underground or used in products. Several companies in this portfolio are developing DAC systems, which are considered crucial for achieving negative emissions at scale. While currently expensive, costs are projected to fall significantly as the technology matures.

What are carbon credits and how do they affect these companies?

Carbon credits represent one metric ton of CO₂ that has been removed from the atmosphere or prevented from being emitted. Companies buy these credits to offset their emissions and meet climate targets. The firms in this portfolio generate high-quality removal credits that typically command premium prices (often $100+ per ton) compared to avoidance credits. As demand for verifiable carbon removal grows, these companies could benefit from rising credit values.

What is carbon mineralization?

Carbon mineralization is a process where CO₂ is converted into stable, solid minerals like calcium carbonate (limestone) through chemical reactions with certain types of rock. This approach offers permanent carbon storage that can last thousands of years. Some companies in this portfolio are pioneering ways to accelerate this naturally occurring process, turning carbon dioxide into stone that can be safely stored or even used in construction materials.

How do government incentives affect carbon removal companies?

Government incentives are dramatically changing the economics of carbon removal. For example, the U.S. Inflation Reduction Act now offers tax credits up to $180 per ton for direct air capture, making previously unprofitable projects viable. Similar incentives are emerging globally. These policies create revenue certainty that helps companies in this portfolio secure financing for large-scale projects and accelerate technology deployment.

15 handpicked stocks

Carbon-Negative Supply-Chain Enablers

This carefully selected group of stocks represents companies building our carbon-negative future. Professional analysts have identified these firms as leaders in technologies that permanently remove CO₂ from the atmosphere, positioning them to benefit from the growing demand for verifiable carbon removal solutions.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 17