Carbon storage portfolios for the transition to net zero

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Oct 18, 2025, 6:23:04 AM (2 days ago) Oct 18
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https://www.cell.com/joule/fulltext/S2542-4351(25)00345-9

Authors: Conor Hickey, Stuart Jenkins,Myles Allen

15 October 2025

Context & scale
To achieve global temperature stabilization goals, such as those set out in the Paris Agreement, current projections suggest that between 7 and 16 gigatons of CO₂ removal annually could be required by the second half of the century. Relative to what is required, there are currently significant shortages, particularly for geological storage options. Carbon removal projects have different risk characteristics in terms of releasing CO₂ back into the atmosphere. Natural climate solutions like forestry face reversal risks from wildfires, droughts, and land-use changes, while technologically focused projects such as direct air capture with geological storage offer greater permanence but face delivery risks around scalability, cost, and technological maturity. Additionally, costs vary by orders of magnitude between forestry offsets and engineered removal technologies.

The development of carbon dioxide removal (CDR) today is constrained by these dual challenges of risk and cost differentials, compounded by limited societal willingness to pay premium prices for higher-permanence solutions. Most current carbon markets treat different removal approaches as near fungible substitutes despite their fundamentally different risk characteristics. In this paper, we develop a portfolio approach to manage carbon storage project risks, with the potential to select CDR options available today, while maintaining the ability to stabilize temperatures over multi-century periods through “collective” buffer pools. These risk models work on similar principles to insurance, where a small number of payouts maintain a relatively stable overall market.

Highlights
• Collective buffer pooling reduces project risk and stabilizes temperatures

• Moderate-risk portfolios (retains >50%) stabilize temperatures via2 tCO2 per offset

• High-risk portfolios (retains <10%) are ineffective for temperature goals

• Carbon markets can support a broader range of carbon storage options

Summary
Net-zero targets are widely adopted by companies and countries worldwide. To achieve these goals, more companies are investing in diverse carbon removal portfolios. This study develops a new risk management framework that combines forestry, biochar, and geological storage offsets into portfolios that could stabilize global temperatures over multi-century time periods. We find that if a carbon storage portfolio reaches an equilibrium state of CO2 stored, it can be leveraged to stabilize global temperatures by increasing the size of the portfolio relative to the amount of removal claimed. For moderate-risk primarily forestry portfolios retaining 0.75–0.55 tCO2 of the 1 tCO2 stored, an additional 0.30–0.80 tCO2 removal is needed to offset re-releases over 1,000 years. High-risk portfolios retaining only 0.10 tCO2 require over 9 tCO2 additional removal. Portfolios that are predicted to re-release almost all CO2 cannot be leveraged and are ineffective at meeting temperature stabilization goals. These findings have implications for policy and corporate climate action.

Source: Cell Press
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