How To Achieve A Gigaton-Scale Carbon Removal Market
An interview with Hannes Junginger, CEO of Carbonfuture, on how to achieve a gigaton-scale carbon removal market
Can you give a simple explanation of the Carbonfuture platform and who it is designed for?
We provide carbon removal you can trust. The value of the carbon market is bottlenecked by verification. How can you assure that carbon claims are true? Carbonfuture solves this by offering a platform for monitoring, reporting, verifying and trading advanced carbon capture and sequestration technologies, like biochar, that we can accurately track and measure from the atmosphere to the ground. We’re therefore able to have high confidence in the integrity, and the value, of our carbon credits – and this is supported by the leading third-party standards and independent auditors who oversee our marketplace.
Today, Carbonfuture is one of the world’s leading carbon marketplaces, with more than 80,000 tonnes of carbon removals under management.
Can you give us the background story of how you came to found Carbonfuture?
I’ve always wanted to make the world a better place, so when I learned in 2018 from my friend Hansjörg Lerchenmüller, a Cleantech entrepreneur, that reducing emissions would no longer be enough to achieve our climate goals, I knew that we would need to find ways to remove and sequester existing emissions for the long term. Another friend, a fellow mathematician who’s a software engineer, modeler, and architect, joined me in an academic exercise to see what was possible.
We started with the understanding that reducing emissions is no longer enough; it’s vitally important to find ways to remove and sequester existing emissions for the long term. And to make carbon removal appealing for businesses, we needed the proper instruments to subsidize and finance carbon removal activities in a trustworthy and transparent way. Biochar was the first technology we found that was scalable, trackable, and provided high-quality removal for the long term. We developed a solution that tracks the physical carbon activity from credit to where the carbon ends up and how long it’s stored. This solution resonated well with the removal industry. Eventually, people started asking if they could trade with us, but we didn’t have a company yet — just a project.
A year later, what began as an academic exercise turned into a solution that is helping to scale the carbon removal industry. Already, Carbonfuture accounts for 28% of all high-quality carbon removals.
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How was your experience getting funding?
One key question when you found a startup is: Do you have product-market fit? We had a great product, but back in 2019, there just wasn’t a market. So in order to get funding, we had to convince people that carbon removal needs more trust and financial solutions.
We were able to convince some angel investors and VCs to get us started, but it was a really niche effort, especially two-to-three years ago. Even just a few years ago, hardly anyone knew about the necessity of carbon removals, so we had to do a lot of education.
But from a business perspective, geophysics will make the kinds of instruments we specialize in more and more necessary. We need removals with a solid trust layer, and we need to finance them. Our vision for a software and tech platform that scales high-quality carbon removal to mitigate the climate crisis helped us win the funding we needed.
How have things changed for the company from when you started?
The basic vision of financing removal activities based on trust has not changed. And how we do it basically hasn’t changed either. But what has significantly changed is how we talk about it. The market itself has evolved around us, and we shaped a lot of the market ourselves. Back when we started, people would ask: Why do I need to sequester carbon for centuries? If I do it, say, for 10 years and I only pay 10%, that’s sufficient for my clients. Why should I pay more for permanent carbon removals than I would pay for planting trees? We had to do a lot of education around exactly that. Now, people know the difference between permanent carbon removal and managed shorter lived carbon removal, at least within the sector itself.
We’re very much focused on talking about this digital trust layer of carbon tracking using Monitoring, Reporting, and Verification (MRV). Today, the traceability of the carbon has value, whereas before, we were mainly seen as a marketplace, which is really only a tiny part of what we do. So that has changed, but our focus has always been the same.
How do you respond to the concern that carbon credits do not encourage active avoidance of carbon emissions?
It’s our clear standpoint that everything starts with understanding and reducing emissions, and that financing removals is only the last step. We do not encourage people to do less to avoid or reduce emissions. Given the prices we see in the market now, it’s still much cheaper for companies to avoid and reduce emissions, compared to buying removals, which start at $100 or $150 per tonne of CO2e.
As an example, WEtell, one of our first clients, is a sustainable mobile phone company. As a first step, they went through their entire emissions code to try to reduce it as much as possible. They set up the whole product around climate-neutral telephone contracts. Our offering is basically the last building block of their product. They really make an effort to have the most minimal footprint possible, and only then avoid and remove the rest. In terms of customers, these days we’re proud to also have the trust of the most established CDR buyers in the world, like Microsoft and Swiss Re.
Of course, in our discussions with stakeholders, we have to make clear that the earth just doesn’t have the resources to rely on carbon removal alone. At the end of the day, carbon removal comes with a certain cost of energy and resources. Biochar is probably the exception to this rule, because it provides a benefit to the soil while sequestering carbon, so it’s carbon capture, utilization and storage at the same time. But overall, we don’t have the resources to continue emitting and removing carbon at such a high rate.
If you could suggest one policy for climate change, what would it be?
Coupling carbon removal together with the energy transition. I’m really convinced you can’t disentangle the two, and policy needs to acknowledge this. It’s about changing the way we look at resources — they’re more than just something we can grab and take. We need to be more engaging with what we have around us and not waste what’s there. Look at biomass, for example. You should never make biochar and just dispose of the heat. By reframing the way we think about resources and connecting the dots between removal and renewable, policy can help scale positive environmental impacts.
Can you tell us more about the Catalyst program?
While methodologies and verification processes already exist for some CDR technologies like biochar, for others like enhanced rock weathering and ocean-based solutions, there’s basically nothing out there. We wanted to help these more nascent technologies to qualify for the carbon markets and start scaling. Catalyst helps projects develop methodologies, and build consensus on how things should be done in terms of monitoring and reporting.
It’s an institution to help these innovative companies and their credits to qualify for existing carbon markets, which already have this proper governance in place. The first participants are focused mostly on enhanced weathering, but Catalyst is open for other technologies.
What are the company’s main goals right now? Where are you focusing your energy in the upcoming months?
Our goal is to have climate impact and we’re building towards a gigatonne CDR market, so the main thing right now is setting ourselves up for scale. We’re focusing in three main areas: international expansion, expansion in terms of technologies and standards, and API integration. We now have a fully functional global team in place, with all the departments we need, and we’re expanding our team in the US. We’re onboarding more third-party standards on our platform. For example, biochar is tracked not only under CSI (Carbon Standards International), but also now VCS (Verified Carbon Standard), with other standards to follow. And we’re broadening our scope in terms of technologies, too. Enhanced weathering, mineralization, and Bioenergy Carbon Capture and Storage (BECCS) are all on the horizon. We’ve also started to make our platform more seamlessly integrable upstream. Our platform can easily integrate into supplier IT systems or ERP systems for managing their inventories, shipping notes, and invoices.
How do you feel about Freiburg as a hub for climate tech, do you see yourself moving to new HQs as you expand internationally?
From a HQ perspective, Freiburg is an excellent hub. It’s close to Zurich, which is one of the most important locations for carbon removal, globally. We are a remote-first company, with employees in six countries, including a strong presence in the Bay Area (USA) and a subsidiary in Zurich (Switzerland).
What would you do differently if you were starting the company again?
Looking back with the experience and knowledge I have today, I honestly think we did many mistakes and many things also worked out quite well. As a founder, you face challenges which force you to adapt quickly, and I’m still learning the skills it takes to lead in a still-emerging industry. Many people have joined the company and are pursuing their careers with us, and it’s still such a nascent market, with so many uncertainties. So these are personal skills that I need to continually develop and foster, along with my co-founder and the rest of the leadership team. Next time I would try to take care of myself a bit more, in order to protect my resources to be able to lead into the unknown. But that’s much easier said than done.
Where do you hope to see Carbonfuture in 2025 ?
It would be great to be able to say we had and are having a very meaningful contribution to the growth and existence of high quality CDR. In 2025 we aim to process multiple Megatonnes of CDR through our platform.
The interview has been conducted by Jonny Tiernan and lightly edited for clarity.
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