UNDO Lands Groundbreaking Carbon Removals Financing Deal in 'Global First'

UK carbon removal start-up UNDO has secured an innovative debt financing deal, supported by significant corporates like British Airways and Standard Chartered, to accelerate the expansion of its enhanced rock weathering activities. This financing agreement marks a significant step toward scaling carbon removal technologies globally.

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In what's being hailed as a "global first," the agreement unlocks critical funding. It includes a multi-year offtake arrangement, ensuring the corporate partners purchase the carbon removal credits generated by UNDO's projects. This structure guarantees long-term support for carbon removal initiatives, crucial for scaling these solutions.

The financing deal is led by Standard Chartered, which provides debt backing alongside partners such as British Airways, carbon removal firm CUR8, insurer CFC, and consulting firm WTW. This collaboration demonstrates the power of multi-stakeholder partnerships in advancing climate solutions. UNDO launched a pilot project late last year in collaboration with British Airways, CUR8, and Standard Chartered, laying the foundation for this approach.

Standard Chartered called the transaction a "breakthrough" for the emerging carbon removals sector, noting it could pave the way for scaling similar financing models globally. While the value of the debt deal remains undisclosed, the structure is designed to address the significant financial hurdles typically faced by carbon removal developers like UNDO.

Marisa Drew, Chief Sustainability Officer at Standard Chartered, highlighted the potential to replicate this approach across a variety of carbon removal methods, emphasizing how the combination of smaller-scale financing and guaranteed offtake agreements can help mitigate investment risks and ramp up credit supply. "In the field of sustainability, innovation and financial solutions are key to unlocking opportunities for carbon removal."

"In the field of sustainability, we will need innovation and experimentation to be applied toward our hardest to abate sectors," she said. "In these spaces, novel financial solutions and partnerships are key to unlock opportunities that have scale potential. This transaction provides a bridge to bankability for high-quality carbon removal projects and creates a solution that can be replicated across the airline industry."

The Intergovernmental Panel on Climate Change (IPCC) has projected that to reach net zero by mid-century, the world will need the capacity to remove over 10 billion tonnes of CO2 from the atmosphere annually and decarbonize the global economy. At present, only two billion tonnes of CO2 are removed annually, highlighting the need for innovative solutions like enhanced rock weathering.

According to Standard Chartered, achieving this scale will likely require billions of dollars in private investment and bankable financing models to support the development of high-quality carbon removal projects. Long-term investments will be crucial to meet the global demand for carbon removal credits.

Last year, UNDO raised $12 million from various investors to accelerate its enhanced rock weathering activities. These activities accelerate natural carbon sequestration by facilitating the reaction between CO2-rich rainwater and mineral-rich rocks. Once the rocks are spread on agricultural land, they not only sequester carbon but also improve soil health and crop yields.

UNDO has also secured offtake agreements for its carbon removal credits with companies such as Microsoft and McLaren Racing, further strengthening its position in the growing carbon removal market. These partnerships reinforce UNDO's leadership in scalable carbon removal solutions.

UNDO founder and CEO Jim Mann described enhanced rock weathering as "one of the most robust carbon dioxide removal solutions available today because it is permanent, highly scalable, and provides a host of co-benefits." "UNDO is committed to scaling carbon removal solutions to meet the IPCC's ambitious targets."

"Sectors like the aviation industry will require large amounts of high-quality carbon removal to meet their net-zero commitments," he added. "Progressive partnerships are vital to scaling carbon removal efforts globally."

Carrie Harris, Director of Sustainability at British Airways, said the purchase of high-quality carbon removals credits to offset its emissions "form a key part of our roadmap to reach our climate goals." British Airways remains committed to investing in innovative solutions to reduce emissions.

"Carbon removals are vital for urgently reducing the concentrations of carbon dioxide in the atmosphere and meeting global net zero emissions," she said. "We're therefore delighted that this pilot has succeeded, and whilst our initial purchase was relatively small, the partnership hopes to demonstrate the art of the possible and unlock future investment in carbon removals to help accelerate the scale-up of carbon removals solutions."

In related news, tech giant Google has partnered with direct air capture (DAC) developer Holocene to purchase carbon removal credits at a record-low price of $100 per tonne of CO2. This partnership sets a new precedent for cost-effective carbon removal technologies.

The DAC projects from which Google will source these credits are expected to be operational in the early 2030s. However, the company acknowledged that Holocene's technology is still in its early development phase. Google's upfront financial support will help fast-track the development of this pioneering technology.

As part of the agreement, Google will provide upfront financial support to Holocene while committing to a long-term arrangement to acquire carbon removal credits from the developer's future facilities. This collaboration highlights the importance of early investment in emerging technologies to drive down costs and scale solutions.

"We're committed to doing our part to decarbonize the global economy and reach our goal of net zero emissions across our operations," Google said in a statement on Monday. "Carbon removal technologies are key to that goal. Partnering with Holocene to reach this milestone price will be a meaningful step toward advancing the viability of DAC as a tool to fight climate change."

About UNDO

UNDO is a carbon removal start-up focused on enhanced rock weathering technology, aiming to scale up nature-based carbon dioxide removal solutions. Their approach accelerates natural processes to sequester carbon permanently while delivering multiple co-benefits such as improved soil health. With key partnerships and innovative financing models, UNDO is at the forefront of developing scalable, high-quality carbon removal projects to meet global net-zero targets.