CARBON EXPLAINED: What drives the variance in carbon costs?

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Why do carbon removal prices vary so much?

Well, for starters, there are a lot of different ways to capture greenhouse gas emissions.

Avoiding emissions is generally considered to cost less than removing the emissions altogether, like with natural carbon capture or blue carbon projects. Then you get into more engineered removals like biochar and very expensive direct air capture credits.

So, when you look at carbon costs from a zoomed-out perspective, you’ll see a wide range, but even when you get more granular and look within each method, you’ll still run into pricing that is all over the place.

Nonprofit carbon registry BCarbon said the vast differences in carbon pricing partially comes from both underlying carbon removal approach and the methodology used to develop the credits.

Unlike a fungible product like oil and gas, there is no single way to capture greenhouse gas emissions.

That’s why understanding the cost of carbon means understanding the type of project and the standards it follows to generate high-quality, verifiable carbon credits.