As we observed recently, the whole “carbon credit” market has always been an extremely dubious enterprise. Far from being a response to real demand or indeed supply, it was a house of cards capable of being shaken by the bankruptcy of one minor firm apparently guilty of gaming the system rather than making huge amounts of element 6 on the periodic table disappear through a rift in the void or whatever the plan was. And now comes trouble in the related “market” for “carbon capture”. Bloomberg reports that Microsoft “is pausing what is currently the world’s biggest program for financing the extraction of CO2 from the atmosphere.” Which again is a peculiar “business” not least because “Microsoft is by far the largest investor in removal credits, having set an ambitious goal to be carbon negative by 2030.” We get that Microsoft is big, so it’s also likely to be a major investor in lots of actual stuff. But when it accounts for nearly 80 percent of purchases in this would-be “market”, the would-be sellers are facing the blue screen of death. In the New York Times “Climate Forward” David Gelles wrote: “the tech giant is stepping back from an industry it almost single-handedly was propping up.” Which surely raises the question of why it was propping it up single-handedly. It’s not as though a lot of companies weren’t at least rhetorically committed to Net Zero and it’s hard to see how else they were going to get there. But when Heatmap reports that “The tech giant had been by far the nascent industry’s biggest customer” we feel justified in saying that it wasn’t an industry and wasn’t nascent. Gelles adds “the outlook for the hundreds of companies looking to sell those credits is grim.” You’d need to have a heart of stone not to laugh.
As Gelles also wrote, with untouching naivete:
“Microsoft has been the biggest supporter of the much-hyped market for carbon removal technologies, which are designed to remove a key planet-warming gas from the atmosphere.”
We won’t get sidetracked by “a key planet-warming gas” here. But we will note “designed to remove” because it’s not the same thing as “effective at removing”. Nor is “hyped” the same as “proven.” Which might explain why there weren’t a lot of buyers and now “the outlook for the hundreds of companies looking to sell those credits is grim.”
And surely when a whole lot of people are lining up to sell something nobody is lining up to buy, it ought to raise suspicions. Alas, climate alarmists seem not to have good filters for nonsense. Notwithstanding the credit Armageddon Gelles insists, referring to whatever tomfoolery the sellers were hawking, as “an industry that, its proponents say, is destined to play an important role in beating back global warming.” Its proponents say. Its customers not so much because there aren’t any. And, Gelles concedes, “In the short term, there’s little to celebrate.”
For our part we always celebrate when reality triumphs over nonsense, but then we’re not in the business of conjuring carbon credits out of the air. Gelles continues:
“Ever since President Trump returned to office, the federal government has slashed support for the field and companies have backed off their sustainability commitments. But, seen another way, the market for carbon removal is just getting started. The industry’s backers are, in other words, trying to create a brand-new market for technologies that are still in their infancy.”
So you admit that they’re selling something they don’t have. And apparently their one big customer noticed it.
According to Bloomberg, not the green bit, the whole bloom, it spells disaster:
“Pulling vast quantities of carbon from the atmosphere will be essential if the planet is to have a chance of avoiding catastrophic levels of overheating. At the same time, global capacity for removing carbon from the atmosphere is currently just a fraction of what scientists say is needed.”
The scientists who say never having heard of trees, apparently. Another Heatmap article contemplates “Carbon Removal After Microsoft” and starts:
“What does an industry do when it’s lost 80% of its annual demand? The carbon removal business is trying to figure that out.”
Hint: collapses and stiffs its investors. Meanwhile its boosters should be trying to figure out why 80% of its annual demand came from one firm with very deep pockets that thought climate woke was good PR even if no carbon was removed from wherever it wasn’t. As Heatmap adds:
“The next biggest buyer of carbon removal credits – Frontier, a coalition of large companies led by the payments processing firm Stripe – has bought 1.8 million tons total since launching in 2022.”
Which is only 1/40th of what Microsoft bought. And Heatmap almost gets it, saying that:
“Frontier – and, certainly, Microsoft – understands that the real point of voluntary purchasing programs is to prime the pump for government policy.”
So it was never about markets in the normal sense. It was about subsidy-farming on a massive scale. Microsoft, and its suppliers of lack of carbon, were counting on the state to force everyone to throw in money. As the “head of deployment” at Frontier, whatever the heck that job title means, told Heatmap, “The end game here is government support in the long-term period”.
So no market, no customer, no cashflow and no carbon removal. Just rent-seekers rattling the cup.
