The state of the industry and where it’s headed

Founder & Co-CEO of Heimdal.

As the founder and co-CEO of Heimdal, which developed a carbon removal solution, I have had the opportunity to navigate the unique market of voluntary carbon removal. The carbon removal market is self-regulating. And right now, I’ve noticed that the carbon offsets market is dominated by cheap, questionable avoidance and low-quality removals. I believe this needs to shift to transparent and regulated for countries and governments to hit net-zero targets.

Right now, there are three compelling reasons I often see for buying carbon credits:

1. PR advantage.

2. Hedging against future carbon commitments.

3. Sense of responsibility.


The market has developed a form of self-regulation where third parties verify that disposal projects and methodologies are genuine, complementary and verifiable. These third-party verifiers come in and evaluate projects and methodologies and are paid by project developers/carbon credit providers to do so. Some of the major service providers are Verra and Gold Standard. Major providers can be slow to move and have a reputation for strangleholding the market. There are also other smaller players – sometimes non-profits – that are getting involved, especially in the verification of newer technology approaches.

Not all third-party verifiers are interested in a project, or they may have a long time span. They can often earn more and easier money by verifying traditional reforestation, forest conservation, and stovetop projects. This system of third-party self-regulation is ultimately based on reputation, which can be inaccurate or slow to adapt to a changing reality.


It is important to understand the necessary concept of the quality of an offset or removal. The quality of an offset can be seen as the multiple of durability times the risk of reversal. Where durability refers to the expected length of removal, the risk of reversal covers the risks that the expected durability will be reduced by an unexpected event or poor management/handling. Currently, two of the three reasons to buy outlined earlier – the reasons with the strongest incentives – prefer cheap, low-quality offsets. Due to the self-regulatory nature of the market, these purchasing reasons can lead to demand for low-quality dubious credit. This has created a large existing market, already worth billions and on its way to becoming worth as much as $50 billion by 2030.

To enable net zero, I think we need to create a differentiated market that recognizes the sustainability and reversal risks of credit. This should ultimately be regulated by the government; however, another trusted central entity could play a similar role until government intervenes. Oxford Compensating Principles, a standard that classifies the quality of removals. Because this market ultimately relies more on trust than most other markets, transparency and impartial regulatory authority is necessary.

This authority could unlock greater demand for quality solutions and ease the pressure on operators in the market right now. For example, in our experience with existing verifiers and buyers, we have to navigate similar or parallel processes for each customer because they understandably need to verify the quality of what they are purchasing. However, this leads to an inefficient and not yet scalable sales model.

The path forward

There is a path for how we market to where it needs to be. The third buy (responsibility) offers hope and a credible path to change the dynamics of the market, in preparation for a regulated future. The situation in the burgeoning market for high-quality permanent removals is very different from the much larger low-quality part. Credits are generated and sold every year, but many of them are of questionable quality. In fact, estimates suggest that there are only about 10,000 tons of carbon dioxide per year of high quality, permanent carbon dioxide removal facility in today’s world. Nearly half of this is a pilot plant producing 4,000 tons of carbon dioxide per year operated by Climeworks in Iceland. The supply side of the market is still in its infancy.

The hope lies in increasing efforts by companies and coalitions offering advanced market commitments to procure high-quality carbon removal products. These are purchases made because leaders believe it is the right thing to do, and they allow a market to grow. But more than the purchases themselves, the reason they are important to drive the market forward is that they start generating unbiased verification. Business leaders make purchases because they want to make a difference; that makes checking the quality and delivery of removals just as important. I think it’s the market and the academic infrastructure around it that offers the most value. They are not the ideal, sole authority; however, they are perhaps the first incarnation of what could eventually become government policy.

To build for the future, business leaders can work to accelerate the transition of high-value carbon markets. The best way to do this is to participate. We can set suppliers’ requirements and take responsibility for emissions by looking at high-quality, verifiable carbon removals. And to other entrepreneurs, I would say that verification is the most underexposed aspect of carbon markets. There is an opportunity to build technologies for defensible verification that can give business and government confidence that the promised high-quality removal is actually taking place. We have the low-cost, high-quality carbon removal techniques and we have the policy tools at our disposal; all the world has to do is run. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?