Big polluters, concrete offsets? Swiss Airlines, Neustark ink carbon credit deal

Swiss Airlines has signed a multi-year agreement to buy carbon removal credits from Neustark, a startup that locks carbon in concrete for “hundreds of thousands of years.”

Neustark said the agreement comes in the form of a “long-term investment” from the airline. This implies an offtake agreement, where a polluter pays a carbon capture provider for guaranteed removal of a set volume of CO2, often over multiple years.

We’ve reached out to Neustark for confirmation.

Big deals with big polluters

Neustark, based in Zurich, has signed a similar deal with Microsoft, which provides the startup with predictable revenue to scale operations.

It’s a common approach in the industry. Climeworks, Europe’s best-funded carbon capture startup, has signed several such offtake agreements, including with Morgan Stanley and LEGO Group.

For startups, it’s a way to secure early income. For big firms, it’s a way to reach their net-zero goals. But the approach remains controversial.

Critics argue that paying for removals can allow companies to continue emitting, rather than forcing them to cut their own carbon footprint.

Google and Microsoft’s carbon emissions have soared by 51% and 41%, respectively, since 2019, according to a recent University of Cambridge study.

There are also concerns about the verification of carbon removal credits – in other words, whether the project a firm invests in actually absorbs as much carbon as it says it does. Of particular issue are reforestation projects, which numerous studies and investigative stories have shown to often wildly overestimate the amount of carbon they absorb.

Nevertheless, according to the International Energy Agency (IEA), carbon capture is essential because cutting emissions alone may not be enough to keep global warming below dangerous levels.

This has pushed some firms to invest more in direct air capture (DAC) solutions that promise to be more measurable than approaches such as tree-planting or soil carbon sequestration.

Neustark’s technique falls into this growing category of carbon removal solutions.

Locking carbon in concrete

The Zurich-based company takes captured CO2 from the biogas industry and injects it into recycled concrete where it mineralises. The concrete then gets reused to make new roads and buildings.

Neustark says its carbon removal process is verifiable and the mineralisation process stores the captured CO2 for hundreds of thousands of years. The risk of reversal is proven to be “slim to none,” it added in a press statement.

Founded in 2017, Neustark is backed by German materials giant Holcim. Last year, it raised $69m in a funding round led by Decarbonization Partners, a BlackRock and Temasek joint venture. Blume Equity, a London-based impact VC, also participated.