Egger: The first strategy always needs to be to reduce emissions as much as you can, but there are some emissions which are unavoidable. Long term, we talk about 10% to 20% of today’s emissions which you cannot reduce and those you need to remove from the atmosphere. If we want to get to net zero, we need to remove these remaining CO2 emissions; otherwise, it is not going to work.
Repmann: We are basically following science when it comes to tackling the climate crisis. Science is very clear: we need separate targets for reductions and removals. Neither works without the other at this point in time. We have been emitting too much cumulatively by the year 2021. We cannot live without taking some of that back out of the atmosphere again.
Repmann: What we are doing here is committing, over 10 years, to purchase carbon-removal certificates from Climeworks. With that, we want to set a market signal that allows a provider or developer of projects to basically take the contract that stretches over 10 years and go to the bank or other lenders and ask for finance. Obviously, developers don’t do new plants with their own equity. We add to the bankability of the next scale-up step of Climeworks.
Egger: From Climeworks’ perspective, there are two things which are really important. One thing is we need to create a market. Direct air capture technical solutions today are still quite expensive, and we need to create a demand to be able to build more facilities to drive down costs. Demand is definitely one important driver for bringing down costs. When we can show that companies have interest in purchasing these services, it’s really important in attracting investors.
The second thing is the brand. When a strong brand like Swiss Re commits to the technology, it says something, not just in the industry itself. But also, it sends strong signals to regulators, to policymakers so they also understand that they need to build up frameworks, which is important to scale such technologies. This is really the value behind such a deal.
Egger: First, we need to understand the job that needs to be done. CO2 stays active in the atmosphere for a very long time—we are talking about thousands, tens of thousands, even hundreds of thousands of years. We need to have solutions which are removing CO2 permanently. If you have solutions like a nature-based solution where the CO2 eventually comes back to the atmosphere, you do not have a permanent solution. You would basically need to redo the storage to have a climate impact. You need to have solutions which are removing the CO2 permanently.
Secondly, as Mischa said, we need to reduce emissions a lot. The remaining unavoidable emissions are still on the significant side. We are talking about something between five or 10 or even more billions of tons of carbon dioxide which need to be removed every year by 2050. This is quite a volume, so we also need to have technologies which are scalable enough to address such a big volume.
On a third point, we need to have solutions which are not creating negative side effects. It doesn’t make sense to solve one problem while creating another one which might be even bigger. The advantages of these technical solutions are that the side effects are really minimal, land use is really minimal, water use is very minimal, and by doing that, you are not creating other problems. This is definitely the big advantage of technologies like direct air capture.
Egger: It’s all about scaling. Four thousand tons a year is nice, but it cannot be the end of the journey. We are working on larger plants already. By the end of this decade, we’re reaching megaton levels in terms of volume, meaning storage potential of millions of tons with direct air capture. So building bigger plants, building more plants, is definitely needed, and those are driving down costs. We’re still on a too-high-cost level. By scaling, we can bring the cost to a level where it makes sense to deploy it at a large scale.
Repmann: We are a part of the buyer side. We are motivated by getting our company to net zero in line with the Paris Agreement. For that we need that market. We need the Climeworks of the world, knowing we will have still positive emissions. While our operational net-zero target is set for 2030, our insurance and investment business has 2050 as its target, in line with the world’s net-zero target. Since we are in fact insuring the whole world and investing in the whole world, we have a very intrinsic motivation to be market creators here. Only if we have the market will we have the necessary supply and the necessary capacity for the world and our full business value chain to get to net zero over the next three decades.