Switzerland, Norway ink world's first Article 6.2 durable carbon removal deal

Switzerland and Norway have finalized a bilateral deal to transfer Article 6.2 durable carbon removal credits between the two countries, the countries said in a joint press release June 17.

Although only small volumes are expected to be transferred, this marks the first agreement involving carbon dioxide removal credits under Article 6 of the Paris Agreement, the press release said.

Article 6 sets the rules for global trade in greenhouse gas emissions reductions, and, under Article 6.2, countries can allow cross-border exchanges of credits. Countries can use these credits, known as Internationally Transferable Mitigation Outcomes, under Article 6.2.

Nearly 100 bilateral agreements have been signed under the recently formalized Article 6 guidelines. Sweden and Kenya announced an emissions trading agreement June 17.

"This agreement is a pioneering step. It enables us to test how international cooperation on [carbon capture and storage] and CDR can work in practice -- with high environmental integrity and mutual benefit," said Norwegian Minister of Energy Terje Aasland in a statement. "Norway has more than 27 years of experience with safe and permanent CO2 storage, and we are proud to offer this as a service to European partners."

"The goal is to demonstrate the world's first international transfer of negative emissions in accordance with Article 6 of the Paris Agreement and to gain early experience in this emerging market," the agreement between the two countries said.

The agreement includes CCS via subsea geological formations and technology that permanently chemically binds CO2.

"These pilots will involve symbolic transfers of ... Norwegian BECCS to Swiss buyers, and Swiss mineralization to Norwegian buyers," Sebastian Manhurt, senior policy adviser at Carbonfuture said on a LinkedIn post. "The agreement foresees small-volume pilot transfers (1,000-10,000 mtCO2 from Norway; 100-1,000 mtCO2 from Switzerland) starting in 2028-29, with the goal of paving the way for large-scale transfers in the 2030s."

Both demand and credit issuances for tech-based carbon removal are growing annually due to rising demand in the voluntary carbon market, supported by evidence of its decarbonization impact and risks.

Pricing for carbon removal credits from bioenergy with CCS was most recently heard in the range of $150-$300/mtCO2e, while credits for direct air capture were heard closer to $500-$1,000/mt, depending on contract type, tenure and volume.