ImpactAlpha, May 26 — After soaring in 2021, voluntary markets for carbon credits slumped last year amid reports and investigations that took aim at the quality and integrity of the projects underlying the credits.
This week, JPMorgan signed purchase agreements worth over $200 million for carbon removal, which is based on more robust processes and fetches higher prices.
The bank agreed to a $20 million, nine-year deal with Switzerland’s direct-air capture pioneer, Climeworks, for 25,000 metric tons of carbon removal credits. Charm Industrial agreed to remove and store 28,500 metric tons in five years. Other agreements with CO280 Solutions and Frontier will bring total carbon removal to 800,000 metric tons.
“These agreements will meaningfully contribute to moving carbon removal forward as a solution to a wider range of buyers, including our clients,” said JPMorgan’s Heather Zichal.
JPMorgan Chase sees increasing demand in the voluntary carbon market as well and is building tools to facilitate such trades.
In a new whitepaper, the bank calls for “building alignment around robust principles and enhancing accountability and transparency to increase confidence and mitigate risk, which will strengthen the utility of the market for all participants.”