Stockholm emerges as key buyer of removal credits with bioenergy carbon capture deal

The city of Stockholm has emerged as the world's fifth-largest buyer of permanent carbon removal credits after signing a 15-year agreement with Stockholm Exergi for 50,000 mt/year, marking a significant expansion of the Swedish capital's climate strategy as it races to meet ambitious 2030 targets.

The deal, signed through the city's group company, Stockholm Stadshus AB, will help offset hard-to-abate emissions from construction materials and wastewater treatment as Stockholm pursues its goal of becoming climate-positive by 2030 and fossil-fuel-free by 2040, the companies said May 26.

The agreement builds momentum for Stockholm Exergi's 800,000 mt/year bioenergy with carbon capture and storage, or BECCS, facility in Stockholm, which took a final investment decision in March last year and is scheduled to begin operations in 2028.

BECCS involves capturing and permanently storing CO2 from processes where biomass is converted into fuels or directly burned to generate energy.

The plant will capture CO2 from biomass combustion, with the emissions transported by ship to Bergen, Norway, for permanent storage in subsea bedrock.

The project is being funded through government support and the sale of carbon removal credits.

Stockholm Exergi has already secured multiple long-term offtake agreements for removal credits from the facility in recent years, including an expanded deal with Microsoft covering 5.08 million mt over 10 years.

BECCS is increasingly recognized as an effective technological solution for reducing CO2 emissions, particularly within the pulp and paper, power generation, waste management, ethanol and cement sectors. Several BECCS projects are underway in countries including the US, the UK, Sweden, Denmark, France, Switzerland and Canada.

Carbon removal refers to climate mitigation strategies that extract CO2 from the atmosphere, in contrast to approaches that aim to avoid such emissions. Carbon removal credits from carbon capture projects are traded on voluntary carbon markets. Platts, part of S&P Global Energy, assessed biochar carbon credits in the US at $144/mtCO2e on May 22.