Beyond Value Chain Mitigation
Why SBTI's BVCM approach could be vital for scaling carbon removal
In the latest guest blog from our coalition, Pinwheel’s Rob Cheesewright finds reasons for optimism in the carbon removal market, and suggests that SBTi’s Beyond Value Chain Mitigation (BVCM) approach offers a promising path to scaling durable CDR and broadening corporate climate action.
The Carbon Removal Market’s Buyer Problem
The carbon removal market is grappling with a pressing challenge: attracting more buyers. Last year the voluntary carbon market stagnated. And whilst there was growth in the durable carbon removal (CDR) market, it came from an extremely small pool of buyers. A recent report by CDY.fyi found that there were just over 200 buyers in 2024, and as a share of market spend, 60% of all purchases were from a single buyer - Microsoft. Unless we get a new, large wave of buyers for CDR, there is a real risk that the exciting cohort of CDR start-and-scale-ups the market has supported to date are left stranded and we fail to deliver the scale of removals needed to achieve Net Zero.
Introducing Beyond Value Chain Mitigation (BVCM)
This isn’t a doom-laden blog. There are good reasons to be hopeful about the growth of the sector, not least owing to the work of the Science Based Targets Initiative (SBTi). Their February 2024 publication, Above and Beyond, developed the Beyond Value Chain Mitigation (BVCM) approach, which aligns with the ‘contribution’ model a number of market actors (including The Carbon Removal Show Coalition members, such as ourselves at Pinwheel, but also Milkywire) have been making the case for.
SBTi sets out two goals for BVCM. Firstly, “to deliver additional near-term mitigation outcomes to achieve the peaking of global emissions in the mid-2020s and the halving of global emissions by 2030”. And secondly, “to drive additional finance into the scale-up of nascent climate solutions and enabling activities to unlock the systemic transformation needed to achieve net-zero by mid-century globally”.
Unlike traditional offsetting—where companies claim carbon neutrality by purchasing offsets—BVCM primarily focuses on maximising impact, rather than making claims, and creates a broader set of options for buyers to fund climate action. Neither of the two goals refer to individual company emissions targets; rather, they are global in nature. This paradigm shift has been backed by leading thinkers and NGOs, including Gold Standard, WWF, and Carbon Market Watch, with the latter recently securing support from over 50 sector leaders, businesses, and academics for their statement in support of BVCM/contribution approaches.
Why BVCM is a Game-Changer for CDR
The limitations of the traditional tonne-for-tonne offset model are now widely acknowledged. In part, owing to integrity issues created by compensation claims where the underlying asset - a carbon credit - almost never delivers on the promise of metric tonne of carbon avoided or removed (and certainly not removed permanently), leading to significant reputational risk; and, also because offsetting narrows the range of available options to only those that can be accessed through purchasing carbon credits. Carbon credits are usually purchased at very low cost, thereby sidelining vital solutions that do not deliver carbon credits, are very nascent, or are costly on a per-tonne basis (like durable CDR).
BVCM and contribution-based approaches offer a promising alternative, unlocking new alternative routes for funders to engage with CDR. By decoupling corporate budgets from the need to claim carbon neutrality, the scope of legitimate climate investments is broadened. This makes higher-cost CDR solutions—such as those priced at $100+ per tonne—more accessible, as there is no need to buy precisely as many credits as you need to compensate for unabated emissions, usually at a low cost.
BVCM also enables funders to consider ‘indirect’ carbon abatement, for example, funding enabling activity, such as research into CDR methodologies and policy advocacy. This means that organisations with smaller budgets can contribute meaningfully to advancing the sector, instead of or in addition to buying from CDR start-ups. The model also permits funders to use different mechanisms to support projects, with grant-style funding an option in addition to purchasing or making forward agreements for carbon credits.
This new framework also legitimises two budgeting strategies that create room for CDR purchases, in addition to the previous tonne-for-tonne approach: money-for-tonne and money-for-money. The money-for-tonne approach involves the corporate setting an internal carbon fee at levels that would enable investment in higher impact climate projects, including purchasing durable carbon removal. As importantly, by setting an appropriate internal carbon fee, organisations are pricing carbon and taking account for their responsibility for unabated emissions far more rigorously than peers who are using the low prices in the voluntary carbon market (often lower than $5 a tonne) to price their commitment.
Meanwhile, money-for-money similarly prices an organisation’s commitment more robustly, linking it to a core business metric like profit or revenue, but it also could allow for targeted funding of specific initiatives, such as sub-brand campaigns or employee engagement programs featuring CDR projects. For example, Pinwheel has successfully supported clients to deploy employee engagement that include an element of funding for CDR while fostering "climate literacy" by educating staff about those CDR options.
Early adopters are already embracing the BVCM approach, signalling a potential bridge to a future where governments step in and ensure an at-scale CDR sector can survive and thrive. Market participants are poised to play a pivotal role in shaping the policy frameworks that emerge. Whilst not a government, the closest thing we have to an actor that creates quasi-compulsory demand for carbon removal is SBTi.
What’s Next for Carbon Removal and SBTi?
Which leads to our second reason to have optimism. SBTi’s upcoming Net Zero Standard 2.0 process is a real opportunity for the carbon removal community to shape how corporates must take responsibility for their emissions in coming years. If SBTi mandates that corporates must begin to make firm commitments to neutralise any residual emissions through permanent removal earlier than currently required, perhaps as early as 2030, then the number of buyers for carbon removal will likely grow from 200 today, to thousands by the turn of the decade, which would be game-changing for the sector.
SBTi is establishing Expert Working Groups to consult on five key topics of the revised Standard. The policy leaders and practitioners found within The Carbon Removal Show community can play a valuable role – I urge anyone considering it to apply to become a member of an Expert Working Group. The deadline is 28 February.
In the meantime, SBTi’s already established BVCM approach is providing market participants with ways to fund CDR and support the growth of the sector. Hopefully by the time CDR.fyi is reporting on 2025, we’ll have experienced another year of growth, with a broader range of buyers, to report on.
Rob Cheesewright is Chief Impact Officer at Pinwheel, the BVCM platform for funding climate and biodiversity projects. Hourglass and UNDO (both pictured) are among the many impact partners Pinwheel clients have supported.