At Carbonx, our mission is the development of cost-effective carbon removal solutions, that can collectively remove several billion tons of carbon annually by the year 2050.

As part of that ambition, we are committed to optimising the allocation of resources and capital. Our primary focus lies in ensuring that we effectively guide buyers and allocate resources towards projects that hold the greatest potential for making a meaningful impact and advancing the carbon removal ecosystem.

As such, our evaluation methodology is built on 3 core pillars: Integrity, Delivery Performance and Catalytic Impact. We assess a CDR supplier both at the Project level (Integrity + Delivery Performance) and the Catalytic level (Catalytic Impact).

Let us give first a brief overview of the overall methodology:  


The integrity criteria ensures that the project meets our Standards Criteria, and minimum thresholds on metrics such as durability, additionality, net negativity and also has a verifiability protocol in place, either adhering to existing certification standards, or independently verified.

Delivery Performance

The Delivery Risk criteria evaluates the capacity of the project to deliver on carbon removal in full and on time as per the contractual terms of an offtake commitment. Criteria such as technology readiness level (TRL), operational capability or level of financial sustainability are reviewed.

Catalytic Impact

The impact criteria enables buyers to assess the potential impact of their investments in carbon removal projects beyond the fulfilment of their individually purchased carbon removal. The impact quantification is the focus of this article and detailed in the next section.

The significance of Catalytic Impact

It is important to note that while Integrity criteria are sine qua non prerequisites of our vetting process, the evaluation of Delivery Performance/ risk and Catalytic Impact criteria depends on the individual preferences of the buyers. In particular, there might be a tradeoff between Delivery Performance and Catalytic Impact. 

For instance, directing resources towards a project that exhibits a higher level of delivery risk, yet holds the potential to unlock groundbreaking technological advancements or crucial data for the Measure & Verification, can yield a greater overall impact compared to allocating resources to a project with an already established operational plant and lower risk of achieving the near-term desired carbon removal outcomes, but less potential for the years to come.

These buyers aim not only to fulfill their short-term stakeholder obligations but to become influential market drivers in the advancement of CDR. They might aspire to foster significant progress, promote scalability, democratise currently frontier technologies, and lead the way in future large-scale financing mobilisation. Or they might simply wish to maximise their Impact within an existing Climate budget, without focusing on making compensation claims.

Our framework for quantifying Catalytic Impact

Our Catalytic Impact framework primarily reflects our dedication to achieving billion-scale carbon removal. It priorities the evaluation of a CDR supplier and its technology’s ability to remove large quantities of CO2 over its lifetime. We review both their current project and their future removal plans through the lens of our Discounted CDR model. In addition, we also assess the impact of the buyer’s commitment potential to catalyse broader market adoption. Finally, we attribute a portion of the rating to co-benefits generated by the CDR supplier and its projects. As such, 60% of the Impact Scoring is determined by a quantitative analysis and 40% by a qualitative evaluation.

1. Discounted Carbon Dioxide Removal (D-CDR)

For the quantitative part of our Impact Scoring, we are borrowing a well known model from traditional finance, the Discounted Cash Flow (DCF) model, adapting it to carbon removal and naming it the Discounted CDR (D-CDR) model. The output of the model will indicate a numerical value value representing today’s climate impact – measure by the number of tons of CO2 – of the project. 

Premise & background

The premise of the discounted cash flow (DCF) model is that a dollar today is worth more than a dollar in the future, and thus, cash flows generated in the future should be discounted at a higher rate than those generated in the near-term (which is especially true in today’s high inflation environment). By discounting the cash flows over the lifetime of the asset, we can calculate its net present value, i.e. an estimate of what the asset is worth today. 

A similar logic holds true for CDR: one ton removed today is worth more than one ton removed in the future. This is due to the compounding nature of carbon emission and the fact that the negative effects of warming are non-linear. In the short to medium term, harm from warming will increase (e.g. going from 2°C to 3°C of temperature increase is much more disruptive than going from 1°C to 2°C). Carbon velocity is hence an important component of the model: the sooner a project can deliver on carbon removal, the more it will be rewarded by the D-CDR. 

For the model to be effective, we however need to substitute the traditional value driver of the DCF model with value drivers specific to Carbon Removal and the Climate Impact we aim to measure. 

Value Drivers

A traditional DCF has three main value drivers: 1) growth (generally measured by revenues), 2) cash flows, and 3) risks (discount rate). When estimating a company’s value, one first estimates its future cash flows: growth in revenues is projected together with the operational efficiency of the business and the necessary re-investments to sustain the projected growth. To determine the present value of these cash flows, one would discount them using the Weighted Average Cost of Capital (WACC), an estimate for the opportunity costs of capital and the risks involved in allocating capital to the company.

For our D-CDR model, we are replacing those value drivers by:

1) growth in gross CDR capacity (in t of CO2),

2) net carbon efficiency (in t of CO2 after applying carbon efficiency rates) and

3) a dedicated CDR discount rate that reflects the climate impact related risks instead of the opportunity cost of capital. 

CDR Discount Rate

Determining the appropriate discount rate for the future removal of a ton of CO2 is a challenging question. To address this challenge we consider two key aspects: removal velocity and risked-based considerations of the removal project. 

First, we begin by factoring the climate benefits associated with the timing of CO2 removal. Specifically, we consider the estimated benefit of removing one ton of CO2 today compared to in the future, with the goal of keeping the global temperature increase below 1.5 degrees Celsius (referred to as “the safe zone”). Consequently, carbon removal efforts conducted in the later stages (the “danger zone”) will be subject to a higher discount rate. The discount rate associated with this factor is independent of the project reviewed.

Then, we adopt a risk-based approach to account for the probability of successfully removing a ton of CO2 in the future. We integrate here five main considerations: 

  • Removal Pathway scalability: building on the work of the BeZero Scalability Assessment, we review the removal pathway’s macro barrier to scalability. Pathways with higher barriers for scalability will receive a higher discount rate.
  • Technology Readiness Level (TRL): the lower the TRL of a carbon removal solution, the higher the discount rate. To note that we consider projects that have reached TRL 5 at a minimum for full scale review (i.e. technology validated in relevant environments). 
  • Financing & Operational risks: during the Delivery Performance assessment we previously performed on a project-based level, we assigned a score for Strategy & Team, for Operational Capability and for Financing sustainability – a compound score which we here translate into a discount rate. The lower the score, the higher the risk & the discount.
  • MRV Risks (Measurement, Reporting, Verification): we estimate this based on a) the verification confidence level on the technology pathway (built on the existing framework from Frontier and CarbonPlan) and b) the project-specific MRV risk that we previously analysed during the Integrity assessment under Verifiability. The higher the MRV uncertainty, the higher the discount rate.
  • Country risk premium: to date, CDR activities has been primarily in Europe or North America. However, there is a growing number projects in less developed countries. We impute a country risk premium equivalent to traditional capital allocator. Our country risk premium is derived from the following regularly updated Country Risk Premium list

To illustrate with a concrete exemple, we consider a CDR project with the following characteristics:


  • The project has removed 1,000 t of CO2 to date.
  • We consider the project has the potential to reach a capacity of 50 megatons of carbon removal annually in the next 15 years.
  • The system has a starting net carbon efficiency of 70%.
  • We consider the net carbon efficiency can increase over time to 95%, driven by 1) technological innovation (engineering and design) 2) economies of scale and 3) transition towards clean energy sources.
  • The project has a Technology Readiness Level of 8, and has high verification confidence level. However, there are still doubts about the CDR pathway‘s ability to expand to a large scale, especially in terms of necessary policies and required infrastructure/value chain. Additionally, meaningful financial risks subsist to run to operation to the expected scale. Based on those considerations, we derive a CDR discount rate of 19%, which we expect to slightly decrease over the lifetime of the project.   


metric Base Year Y1 Y5 Y7 Y10 Y12 Y15 Terminal year
Total CDR t CO2 1,000 5,000 25,000 500,000 1,000,000 10,000,000 50,000,000 50,000,000
Energy (e.g. thermal) t CO2 -200 -300 -3,000 -40,000 -50,000 -350,000 -1,600,000
Transport t CO2 -30 -150 -500 -6,000 -10,000 -50,000 -280,000
Inputs t CO2 -50 -250 -700 -10,000 -15,000 -70,000 -400,000
Sequestration t CO2 -20 -100 -300 -4,000 -5,000 -30,000 -220,000
Net CDR t CO2 700 3,500 20,500 440,000 920,000 9,500,000 47,500,000 47,500,000
Net efficiency % 70% 75% 82% 88% 92% 95% 95% 95%
 CDR Discount % 19% 19% 19% 19% 18% 18% 17% 17%
 Cumulated discount factor 0.84 0.42 0.30 0.18 0.13 0.09
PV (net CDR) t CO2 2,940 8,600 130,560 175,000 1,500,000 5,000,000


Note: illustratve figures. Figures rounded for simplicity.

The output of the model indicates 54 megatons of carbon removal. This represents today’s value of the net CO2 to be removed over the lifetime of the project. Around 25% of the value comes from the carbon to be removed until the project reach it’s full scale in Year 15. Another 75% of the value is derived from the CO2 removal once the project operates at full scale.

This numerical value provides a basis for comparison with other CDR projects. To optimise capital allocation, projects displaying higher output should be given precedence over those with a lower value. This value will contribute 60% of our Catalytic Impact Rating.


 Impact Metrics t CO2 
Net CDR in terminal year 47,500,500
Terminal CDR Discount 17%
Terminal CDR value 260,000,000
PV Y1-Y15 values 14,000,000
PV Terminal value 40,000,000
Today’s Climate Impact  54,000,000


2. Market Adoption Catalyzer

For the second part of our Catalytic Impact review, we look at the buyer’s ability to promote wider market adoption of CDR solutions over time, as well as its role in catalysing participation from other stakeholders in the CDR ecosystem. We review two main considerations:

Price democratisation potential

This criterion emphasises the importance of economies of scale in driving the widespread adoption of CDR solutions. It rewards buyers who enter the market early, when prices are steepest, and encourages the development of CDR solutions that can be implemented at a large scale to drive down costs. In particular, Buyers contributing to a decrease of the cost curve in the earlier stage are more impactful than Buyers entering the market when the cost curve is flattening. 

This metric rewards CDR solutions that demonstrate a significant potential for price reduction from the present until 2030/2040 and have the potential to achieve the <$100/ton CO2 benchmark. 

Capital flow catalysing effect

This criterion evaluates the ability of a purchase to increase certainty and encourage the flow of capital to CDR technologies. It rewards advanced market commitments (AMCs) that foster financing support, with greater value placed on AMCs that help suppliers raise equity and/or project debt and/or grants, compared to suppliers that are already well-financed. It also consider to ability of a commitment to drive further buyers towards the project or the CDR space, in particular buyers that have a recognisable brand or strong signalling effects can have a meaningful impact in driving more attention and unlock further commitments.

3. Co-benefits

In the last part of our Catalytic Impact framework, we review the potential of the project to ensure long-lasting environmental benefits such as sustainable land and ocean use, and social benefits. This part will contribute to 20% of the scoring. We review in particular the following potential benefits:

  • Biodiversity conservation: ability to conserve and enhance biodiversity in the project area.  
  • Soil health improvement: ability to improve soil health and fertility, which can enhance the capacity of the soil to sequester carbon.
  • Social and economic benefits: deliver social and economic benefits to local communities, such as job creation and income generation.
  • Co-capture potential: can capture and store not only carbon dioxide but also other pollutants such as nitrogen oxides (NOx) and sulfur dioxide (SO2). 
  • Long-term sustainability: should be designed and implemented in a way that ensures its long-term sustainability.

Final remarks

Quantifying impact is always a challenging endeavour and is highly dependent on what is being measured. For carbon removal, the science is clear: we need one billion tons of CO2 removed by 2030 and around ten billion tons of removals by 2050. Our Catalytic Impact Rating provides a framework for allocating capital and resources to projects that have the highest chance of contributing to these highly ambitious yet necessary & essential objectives.

Interested to learn more about our framework for quantifying Catalyst Impact Catalytic Impact and our overall methodology? Please do not hesitate to contact us at



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