Carbon rating agency BeZero Carbon has assigned its highest-ever rating for a Direct Air Capture with Carbon Storage (DACCS) project, marking the first public assessment of its kind. The Project Orca by Climeworks, based in Hellisheiði, Iceland, has received a ‘AAA’ rating, reflecting the highest likelihood of effectively removing one tonne of CO2e.
Direct Air Capture (DAC) involves extracting carbon dioxide directly from the atmosphere, and DACCS refers to the permanent geological storage of this captured carbon.
DACCS is becoming an increasingly significant segment within the engineered carbon removal market. It has contributed about 20% of pre-issuance engineered carbon removal credits to date, making it the second-largest contributor after Bioenergy with Carbon Capture & Storage (BECCS).
There is growing consensus on the importance of DACCS for achieving net-zero emissions. The International Energy Agency projects that DACCS could contribute up to one billion tonnes of CO2 removal towards net-zero targets.
Despite McKinsey’s estimate that annual demand for engineered carbon removal could reach 100 million tonnes by 2030, scaling the sector remains expensive. Thus, ensuring high-quality removals is crucial for building market confidence.
BeZero Carbon has currently rated 43% of all issued engineered carbon removal credits, and 100% of DACCS issuance with this rating.
Independent third-party ratings are vital for advancing this emerging sector by enhancing investor confidence in the quality of carbon credits. These ratings help investors gauge the effectiveness of credits in meeting climate goals, thereby directing capital into crucial climate solutions like engineered carbon removals.
Dr Spencer Meyer, Chief Ratings Officer at BeZero Carbon, said, “Achieving an ‘AAA’ rating is a tremendously high bar to clear, and we’ve been deliberately cautious in issuing any until now. That’s why it’s hugely significant to be announcing our first today in what is an indicator of genuine quality in the market.”
He added, “We’re particularly proud to publish the industry’s first public DACCS rating, as carbon removal is an essential mechanism to reach net zero emissions. The sector requires significant investment to reach the scale where it can deliver meaningful impact for the planet, and ratings are quickly becoming integral to building the confidence needed to spur demand for any type of high-quality credits.”