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Mitsubishi-backed NextGen inks carbon removal deal

Apr 26, 2023
Illustration of an upside-down wallet pouring out carbon dioxide molecules

Illustration: Annelise Capossela/Axios

NextGen, a joint effort from Mitsubishi and carbon finance group South Pole, has signed a carbon dioxide removal (CDR) deal that, once complete, could become the largest diversified CDR portfolio.

Why it matters: NextGen wants to become a reliable customer for early-stage CDR startups, and can sign big advanced-purchase agreements that are critical for projects that otherwise would not have access to financing.

State of play: NextGen's entry into the market, along with the $1 billion Frontier Fund, will give carbon removal project developers another pool of funds to pull from.

  • The influx of funding into the space could help drive down the price per metric ton for carbon removal, a key hurdle the industry faces as it attempts to grow and bring in new corporate customers.

What's happening: NextGen has agreed to purchase 193,125 metric tons of carbon removal across three CDR projects under development.

  • NextGen backers include Boston Consulting Group, LGT, Mitsui O.S.K. Lines, Swiss Re and UBS.
  • To date, NextGen has signed on to be a purchaser from 1PointFive's CDR facility in Texas, Summit Carbon Solutions’ facility in the Midwest U.S., and Carbo Culture's first facility in Finland.

The bottom line: Carbon removal development is a key part of lowering emissions and meeting climate goals globally, but someone is going to have to finance those projects.

  • Companies with deep pockets are increasingly stepping up to fill the gaps they can.
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