Mitsubishi wants to be the world’s biggest dealer of carbon removal credits. Keep in mind that the company has its hand in many of the most polluting industries out there — from producing cars to natural gas, coal, petrochemicals and plastics. And carbon credits have become a popular way for corporations to keep on polluting while claiming to fight climate change.
This week, the company announced a joint venture to set up what it says is the world’s biggest portfolio of carbon removal credits. The credits represent tons of carbon dioxide taken out of the atmosphere through a range of still contentious tactics for dealing with climate change.
The new venture, called NextGen, establishes a new marketplace for carbon offset credits. Mitsubishi and its partner on the venture, a project developer called South Pole, plan to connect other companies with carbon removal projects so that they can purchase credits to offset some of their greenhouse gas emissions. The plan is similar to an initiative launched by Stripe, Alphabet, Meta, Shopify, and McKinsey last year.
NextGen secured commitments from companies to purchase roughly 200,000 metric tons worth of carbon removal credits. That’s only equivalent to canceling out the pollution from a single coal power plant for half a year. But as a nascent market, those 200,000 metric tons already represent a quarter of these kinds of carbon removal purchases to date.
It’s also a huge investment — likely in the tens of millions of dollars — in emerging technologies that are still prohibitively expensive. Mitsubishi says it’s targeting an average price of $200 per ton, but the going rate for credits can be three times that or more. Buyers that have signed on so far include Boston Consulting Group, banking companies UBS and LGT, insurance giant Swiss RE, and shipping giant Mitsui O.S.K. Lines.
So far, they’re buying credits from three different kinds of projects, and each of them has been controversial. Occidental Petroleum leads one project, a plant it’s building in Texas that filters CO2 out of the ambient air. The company has already used that project to sell what it calls “net-zero oil.” To make net-zero oil, Occidental shoots the captured carbon into an oil field to push out hard-to-reach reserves.