The science is clear: the world needs large-scale carbon dioxide removal (CDR). While reducing emissions is crucial, it isn’t enough. We need to pull billions of tonnes of already-emitted carbon from the atmosphere—and every company has a role here.
Many of the world’s top technologists are working today on taking carbon removal projects from proof of concept to industrial-scale operation. But this mission is capital-intensive, and private sector investments—of all sizes—are critical. The good news: supporting carbon removal can be done at all budget levels, and doing so provides real benefits to investors.
Watershed helps companies like Walmart, Twitter, Kainos, and Aledade measure, report, and act on their emissions. We also help customers find verified, high-impact carbon removal projects that are ready to scale. In this guide we cover why private-sector CDR investments matter, how to fit them into your climate program, and what our early-acting customers have to say about their CDR experiences.
In the early days of corporate climate action, “carbon neutral” was the main standard—ie. reducing emissions wherever possible, then purchasing offset credits for whatever remained. While this was an important first step towards decarbonization, it isn’t enough to just slow emissions anymore—we need to start reversing them.
There are two main approaches to CDR:
- Natural solutions ($28-$280/tonne)
Organic carbon sinks like trees, plants, kelp, and biochar already capture CO2. How can we increase our supply of them—and increase their storage capacity? Orgs doing smart work on this include TIST, Living Carbon, Running Tide, and Rainbow Bee Eater.
- Engineered CDR solutions ($350+/tonne)
How do we replicate what nature does and vacuum CO2 from the atmosphere artificially? And how do we store it in a way that locks it away forever—or at least for many human lifetimes? This is the great mission of startups like Charm, Climeworks, Noya, and CarbonCure.
Both approaches have their place. Nature-based solutions buy us time, while frontier solutions ensure that we can solve the problem permanently.
"While reductions make up the majority of our actions towards Net Zero, we’re also focused on building relationships with best-in-class removal projects to neutralize the remainder of Block's emissions. We leverage Watershed to help diligence and curate the very best projects across a wide spectrum of leading CDR categories.” — Neil Jorgensen, Block (Watershed Customer)
Why urgent scaling matters
To avoid the worst of global warming, we need to keep the world’s temperature rise to no more than 2°C (though 1.5°C is much safer). This means we could need to remove as much as 11 billion tons of CO2 per year by 2050—more than 20% of our current emissions.
We aren’t currently on track, for two major reasons:
- The CDR industry is underdeveloped and underfunded
- There’s a widespread perception that only the largest companies are able to invest the amounts necessary to make meaningful change
But the reality is:
- We want to take as many different cracks at this as possible. This means funding a wide diversity of credible CDR projects—each at different growth points. And some of these only need quite modest amounts of money to take the next step towards scaling.
- Buying CDR credits today often means pre-paying for tomorrow’s actual removals—thus making those removals possible. And the faster and earlier we do this, the more we bend the CDR cost curve—making it more affordable for every buyer to follow.
We have evidence that this approach works: solar power is ~2,000x cheaper today than it was in the 60s, and is now the cheapest electricity source in history. But we have to go faster this time—using our investments to unblock progress wherever possible.
“Small purchases of frontier CDR credits help build traction and demonstrate demand for high-quality carbon credits.” — Martin Srna, Living Carbon (Watershed CDR Supplier)
Aledade: a case study
Aledade, a patient-care company, joined Watershed in 2021 to build on their year of prior climate planning. When they realized that they’d easily meet their original carbon-neutral commitment, they decided to increase their ambition by looking into CDR.
Watershed partnered with Aledade to determine the best investment—one that would offer credibility, integrity, and permanence. Their first purchase was small: 83 of tonnes of removed carbon from Charm. But Aledade’s board of directors was thrilled, and challenged the team to go further. And they did, upping their purchase to 2,060 tonnes this year. Here's a snapshot of their portfolio:
|Partner||Modality||# Tons for Aledade||% of Budget|
|Noya||Direct Air Capture||27||16.89%|
|Sustaera||Direct Air Capture||80||16.43%|
|Living Carbon||Bio-Enhanced Regeneration||1600||17.37%|
|CarbonCure||Mineralization in Concrete||125||16.50%|
|Heirloom||Direct Air Capture||30||18.08%|
And, they've learned a few valuable lessons along the way:
- Look for high-ROI opportunities. Supporting early-stage companies empowers them to secure the financing to build new facilities, streamline operations, and further bend their cost curve—making CDR more accessible to all.
- Removal ＞ offsets. The most popular offsets are cheap because they’re mostly neither verified nor impactful. A $10 offset credit is just marketing; a $200 removal credit is meaningful to the climate fight—and can be verified in a way that protects your company from greenwashing claims.
- Benchmarks are changing. Carbon-neutral goals are yesterday’s standard. As regulators and public sentiment shift towards net zero, CDR investment is increasingly becoming table stakes for credible corporate climate programs.
- Smaller companies shouldn’t feel intimidated. You don’t need to invest millions on day one to make a difference. You can sponsor the cutting edge of CDR at whatever scale is appropriate for your budget and climate goals.
- Choose a champion. You can start without a full in-house climate team—or even a full-timer. But it’s crucial to commit a single stakeholder to the cause, and to arm them with the resources and data they need to identify the right partners.
The Watershed CDR playbook
When it comes to incorporating CDR investments into your corporate climate plan, we recommend five steps:
- Don’t lose sight of reductions.
While CDR is a crucial long-term investment, it’s much cheaper to avoid a tonne of emissions than to remove a tonne of CO2 from the atmosphere. Priorities should still include working with vendors on emissions reductions, rethinking corporate travel, decarbonizing your electricity bill, and making your offices as energy-efficient as possible.
- Find an appropriate starting budget.
Once you’ve put appropriate amounts aside for reductions and reporting, decide how much to spend on nature-based CDR (quick wins) vs frontier solutions (the ultimate goal).
- Shop responsibly.
Ensure you’re funding credible CDR efforts—with verification programs that can withstand real scrutiny. (Watershed maintains a marketplace of scientifically vetted projects for customers.)
- Broadcast your actions.
Investors and employees are hungry for real action—not more greenwashing. Sharing news of your CDR investments can spur deep enthusiasm, and help attract top talent and capital.
- Review and recommit.
As you get feedback on your first purchases—including progress reports from your supported vendors—consider increasing your ambition.
If Watershed can help with any of this, please get in touch.