Before you buy: A subsurface checklist for carbon removal credits
Carbon removal credits are gaining traction as a way to fund CO₂ capture and storage. But when they’re tied to geological storage, caution is needed. Here’s why – along with some questions to ask before committing.
In the emerging CCS market, carbon removal credits have become a tool to help finance capture, transport and storage projects. They’ve already played a key role in projects like Northern Lights Phase 1 and 2, where credits were sold to Equinor, Frontier, and Microsoft.
But the market is still immature – and when credits are tied to geological CO₂ storage, risk levels rise. One key reason: storage success is not guaranteed. Even in promising projects, there’s often only a 50% chance that the reservoir and seal perform as anticipated.
That means anyone buying credits early in a project lifecycle is exposed to significant risk. And the subsurface is only one piece of the puzzle. Because CCS projects are part of an interdependent business value chain, failure in one part can impact everything – including the credits. Without proper safeguards, buyers risk relying on financial instruments that are neither fully regulated nor properly substantiated.
Our advice: Ask the right questions
Before committing to carbon removal credits linked to CO₂ storage, we recommend thorough technical quality assurance. Here are a few questions to guide your due diligence:
Has the storage project been awarded a CCS license?
Has the site’s capacity been confirmed through drilling and injection testing? Is both reservoir and seal proven?
How mature is the project, and how would it score in the internationally accepted SRMS (Storage Resource Management System) classification?
Have the storage capacity estimates, and associated risks been independently assessed?
Is there full 3D seismic coverage of the site – or plans to acquire it?
Are there legacy wells nearby? If so, is there a mitigation plan and a framework for MMRV (Measurement, Monitoring, Reporting and Verification)? This framework, designed to improve the accuracy, completeness, and transparency of reported emissions, is crucial for obtaining reliable data used to make informed decisions about reduced emissions and environmental protection.
Does the credit issuer have adequate subsurface expertise?
A structured due diligence process early on can help buyers avoid critical pitfalls and make better-informed decisions.
Facts | Carbon removal credits
These credits represent verified removal of CO₂ from the atmosphere through reforestation, direct air capture or geological storage. The goal is to help mitigate climate change by permanently reducing atmospheric CO₂
