Swiss Re's approach to using carbon certificates
March 2024
Swiss Re purchases a mixture of high-quality carbon removal and avoidance certificates which it uses to compensate its remaining in-scope1 operational emissions. This is funded by the Carbon Steering Levy (CSL), Swiss Re's real internal carbon price on in-scope operational emissions. The CSL started at a level of USD 100 /tCO2e in 2021 and will increase linearly up to USD 200 /tCO2e in 2030. In 2024, the CSL is set at
USD 134 /tCO2e. The proportion of carbon removal in the certificate mix is also increasing gradually each year, from minimum 10% in 2021, up to 100% in 2030, thereby allowing Swiss Re to support the development of the carbon removal market towards the scale that is deemed necessary to reach the net-zero state on a global level. Meanwhile, Swiss Re continues to support high-quality carbon avoidance projects until 2029, after which they will be phased out of the portfolio.
Swiss Re follows internal quality standards when selecting carbon certificates which are informed by external guidelines, including, among others, the Core Carbon Principles of the Integrity Council for the Voluntary Carbon Market. Swiss Re assesses key quality aspects such as integrity, durability, scalability and additional social co-benefits to determine the overall quality of carbon certificates. In addition, Swiss Re conducts an assessment on carbon certificate projects in an effort to support only projects that do not infringe on global and local efforts to achieve the United Nations Sustainable Development Goals.
In 2021, Swiss Re and Climeworks, the company developing and operating the world’s first commercial Direct Air Capture (DAC) plant, signed the world's first long-term offtake agreement for technological carbon removal, worth USD 10 million over a period of ten years. In 2022, Swiss Re was one of the first five companies to join the NextGen CDR Facility as a founding buyer to help build a market for credible, scalable carbon removal by supporting projects that remove atmospheric CO2 emissions. The certificates Swiss Re receives under these agreements are not yet in the compensation portfolio, but are scheduled to be used in the second half of the decade.
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Certificates used for emissions compensation in 2023
In 2023, Swiss Re’s operational GHG emissions in scope for compensation with carbon certificates were 28 290 tonnes of CO2e. Additionally, 1 067 tonnes of certificates were secured for the NetZeroYou2 employee engagement programme, leading to a total of
29 357 tonnes of CO2e (these certificates are not used to compensate Swiss Re's emissions). The share of carbon removal certificates in the mix was 34%, thus achieving the Group’s minimum target of 30% for the year 2023. The minimum share of carbon removal increases by +10% each year between 2021 and 2030; in 2024 it is set to be 40%. Most carbon removal certificates that were retired in 2023 are of the “biochar” type: biochar is produced by heating biomass in the absence of oxygen (“pyrolysis”). It consists of carbon black, the majority of which, under natural conditions remains in the soil for hundreds of years, rendering biochar a more durable form of carbon storage than the original biomass. It is usually added to degraded topsoil to improve soil fertility.
Certificates used for emissions compensation in 2023
|
Project |
Type |
Country |
Standard |
Volume retired (tCO2e) |
Registry |
Description |
|---|---|---|---|---|---|---|
|
OCO Technology: carbonated building projects |
Removals - mineralisation |
United Kingdom |
CORC 1000+ |
1 000 |
The OCO Technology facility in Leeds used CO2 captured from biological sources to treat reactive wastes, thereby creating durable construction materials that stored carbon permanently in mineralised form. |
|
|
Removals – biochar |
Kenya and Malawi |
Global Artisan C-Sink |
5 000 |
Biochar Life equipped smallholder farmers in Kenya and Malawi to make biochar from crop residues to apply in their own fields and sell, thereby improving crop yields and providing an additional income stream. |
||
|
Removals – biochar |
United States |
EBC C-Sink |
2 000 |
Pacific Biochar turned forestry waste and sawmill residues from FSC-certified forests into biochar. The biochar was applied in farmlands in California and Oregon and was used to improve the soil environment and increase viticulture yields. |
||
|
Exomad Green: Concepcion |
Removals – biochar |
Bolivia |
CORC 100+ |
1 000 |
Exomad Green made biochar out of forestry wastes from forests governed under the certification Autoridad Bosques y Tierra (ABT). ABT is a governmental body that marks single trees as approved for harvesting by Exomad. Exomad Green had an agreement with the local municipality to supply the biochar, which was then distributed to the local community for use in agriculture. |
|
|
Dutch Carboneers: Odisha |
Removals - biochar |
India |
Global Artisan C-Sink |
1 000 |
Dutch Carboneers provided training and equipment to smallholder farmers in Odisha to enable them to make biochar from agricultural residues. This biochar can then be applied in their own fields to increase fertility, while also reducing hazardous smoke from burning agricultural residues |
|
|
Avoidance – displace coal consumption |
China |
Gold Standard |
18 030 |
The Programme supported low-income households in rural regions of Sichuan to install biodigesters which collect methane from stored manure. This can be burnt for energy, thereby displacing coal use, reducing CO2 emissions and improving indoor air quality. |
||
|
Avoidance – displace wood consumption |
Mozambique |
Gold Standard |
1 327 |
The Central Mozambique Safe Water Programme provided improved cooking stoves to households and funded the refurbishment of existing water boreholes to reduce wood burning for the purpose of cooking or purifying drinking water. |
Footnote
Footnote:
1Scope 1, Scope 2 and selected Scope 3 categories (category 3 - fuel- and energy-related activities, category 5 - waste generated in operations, category 6 - business travel, and paper and water in category 1 - purchased goods and services).
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Vincent Eckert
