Power company Engie announced that it has pre-ordered 5 million tons of nature-based carbon removals from climate finance company Catona Climate.

According to the landmark 2022 Intergovernmental Panel on Climate Change (IPCC) climate change mitigation study, scenarios that limit warming to 1.5°C include carbon dioxide removal methods scaling to billions of tons of removal annually over the coming decades. The report also noted, however, that while there are multiple existing solutions to capture and store CO2, most are early stage and currently limited in scale.

In the most recent IPCC climate change report, the organization highlighted the potential of nature-based solutions to contribute to emissions reductions, estimating that ecosystem restoration projects could add at least 3 gigatons of CO2 emissions removal annually by 2030. Barriers to scaling nature-based carbon removal projects, however, include challenges and complexity related to impacts and engagement with local communities, and balancing carbon sequestration benefits with other environmental co-benefits.

California-based Catona Climate uses carbon removal purchases to fund high impact, nature-based carbon removal projects aligned with science-based targets. The company sources, invests in and monitors carbon removal projects, providing businesses with a portfolio of high-quality climate solutions. Catona focuses on projects around regenerative land management, supporting reforestation, and combatting deforestation.

Tate Mill, CEO of Catona Climate said:

“Key to the success of our carbon financing model is our ability to work with forward-thinking corporations like ENGIE to send unambiguous demand signals to the market. Those signals help us de-risk carbon investments and drive more capital through our trusted network of project developers to accelerate the development of nature-based carbon removal solutions so critical to turning the tide on climate change.”

Under the terms of the agreement, the carbon removal credits will be issued between 2030-2039, with Engie able to source from multiple projects with locked-in pricing.

Jérôme Malka, Executive Committee member at Engie’s business entity Global Energy Management & Sales said:

“Promoting the development of high-quality nature-based carbon removal projects will contribute to decarbonizing our client’s businesses and help the Engie group reach its Net Zero objective across all 3 scopes by 2045. Collaborating with Catona to address residual emissions was a natural fit given our alignment on quality and impact, and our shared commitment to supporting projects that not only remove carbon, but also provide meaningful benefits to local ecosystems and communities.”