I was thinking that these carbon capture credits can be sold by KMI. I have been seeing that many of the large data centers are using carbon capture credits as the carrot for them to get their projects approved. Higher demand for these credits would results in higher prices in the future.
I think Robert was mentioning this as a possible new revenue stream for KMI. I did not see the demand but now I do. Will be interesting if the market will too.
perplexity.ai
The demand for carbon removal credits is projected to increase significantly in the coming years, driven by corporate net-zero commitments and the need to counteract residual emissions. Here are the key points:Projected Demand- McKinsey estimates annual global demand for carbon credits could reach 1.5 to 2.0 gigatons of CO2 by 2030 and 7 to 13 gigatons by 2050.
- BCG projects demand for durable carbon removal credits to be 40-200 million tonnes of CO2 per year in 2030, worth $10-40 billion, increasing to 80-870 million tonnes ($20-135 billion) in 2040 in their low scenario. Their high scenario projects 200-870 million tonnes in 2030 itself.
Potential Buyers- Currently, major tech companies like Microsoft, Stripe, Alphabet, and Meta, as well as corporations like JPMorgan, Boeing, and Frontier (a purchasing collective), are the primary buyers of carbon removal credits.
- As prices drop, more diverse buyers, including other corporations with net-zero pledges, are expected to enter the market by 2030-2040.
- Data centers could become significant buyers as they aim to offset their emissions and meet sustainability goals, especially with the growth of new data centers globally.
Price and Demand Dynamics- Prices are currently high, ranging from hundreds to thousands of dollars per ton, limiting buyers to deep-pocketed corporations.
- As supply increases and technologies mature, prices are expected to decrease, enabling more buyers to participate in the market.
- Clear demand signals from buyers, such as long-term purchase commitments, are crucial for encouraging project development and scaling up supply.
- Government policies and incentives could further drive demand and support the carbon removal industry's growth.
In summary, the demand for carbon removal credits is projected to surge in the coming decades, driven by corporate net-zero targets and the need for credible emissions counteraction. While currently limited to major corporations, the market is expected to diversify as prices decrease, potentially attracting data centers and other buyers seeking to offset emissions and meet sustainability goals. |
