Permanent carbon removal credits and advance market commitment

Permanent carbon removal credits form a distinct category from avoidance credits, such as those from protecting existing forests: rather than avoiding an emission that would otherwise have occurred, they capture and durably store carbon already present in the atmosphere, through technologies such as direct air capture or converting biomass into biochar. These technologies remain costly today and produced at too small a scale to attract sufficient market demand, which led several major companies to form an advance market commitment, collectively guaranteeing the future purchase of a volume of credits at an agreed price, to give developers the financial visibility needed to invest in industrial capacity. For insurance players beginning to fold carbon offsetting into their own net-zero pathways, this distinction between avoidance and removal becomes decisive, since only permanent removal meets the strict definition of net-zero, whereas avoidance merely slows the growth of the existing atmospheric stock. The advance market commitment mechanism is directly inspired by devices used to accelerate vaccine development, applied here to funding a nascent climate industrial sector.