How are CDR credits generated?

Engineered CDR refers to technologies that capture carbon dioxide from a source – such as a power plant, or directly from the air – and then store it in a stable form such as underground reservoirs, or durable products.

Unlike natural approaches for removing CO2 such as afforestation or reforestation, or semi-natural methods such as biochar, engineered CDR relies on man-made processes that go beyond what occurs in nature. Examples of engineered CDR include Direct Air Capture with Carbon Storage (DACCS), or Bioenergy with Carbon Capture and Storage (BECCS).

DACCS removes carbon dioxide directly from the atmosphere and stores it deep underground in geological formations. Despite being an emerging technology, 27 DAC plants have been commissioned to date around the globe, capturing almost 0.01 Mt CO2/year. One benefit of DAC facilities is that they do not need to compete with agriculture for arable land. However, they require significant energy to extract non-concentrated carbon dioxide from the atmosphere, making proximity to renewable energy sources essential and contributing to high operational costs.

Revenue from carbon credit sales provides a financial incentive for scaling DAC projects, helping cover capital expenditures and ongoing operational costs. As demand for engineered CDR solutions grows – particularly from sectors with hard-to-abate emissions – carbon credits can become a key mechanism to accelerate DAC deployment globally.

BECCS differs in capturing and storing the carbon dioxide released when biomass is burnt for energy or converted into fuel. Biomass can refer to dedicated energy crops or by-products like wood waste, agricultural residues or compost.

Burning biomass is potentially carbon neutral, since the plants absorb carbon dioxide during their lifetime. However, when the carbon emissions released during combustion are stored underground in mountains or other geological formations, the process becomes carbon negative – which means the system actively removes more CO₂ from the atmosphere than it emits, delivering a net reduction in global greenhouse gases.

Other CDR techniques include accelerated carbonation of concrete aggregate. This method locks carbon dioxide into crushed concrete by exposing it to concentrated carbon dioxide. This process is called carbonation, and permanently stores the carbon while producing reusable materials for the construction industry.