NYK positions CDR as a means to reduce Scope 1 emissions

NYK Group has issued a paper positioning carbon dioxide removal (CDR) as a means to reduce Scope 1 emissions.

As stated, the Group prioritizes GHG reduction by maximizing energy efficiency and switching to next-generation fuels. For residual emissions that cannot be avoided through efforts to reduce emissions, CDR will be utilized as a means equivalent to Scope 1 emissions reduction to achieve net zero by 2050. The Group will begin CDR credit procurement in fiscal 2025, with the aim of retiring 100,000 tons by 2030.

Carbon Dioxide Removal (CDR) refers to technologies, practices, and approaches that remove and durably store carbon dioxide from the atmosphere. CDR is required to achieve global and national targets of net zero CO2 and GHG emissions. CDR cannot substitute for immediate and deep emissions reductions, but it is an important tool that should be deployed in tandem with other mitigation methods.

Moreover, NYK Group agrees with the Intergovernmental Panel on Climate Change (IPCC) approach to global net-zero emissions, and this approach has been adopted in the company’s decarbonization strategy.

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Taking into consideration the remaining carbon budget left for humanity for limiting global warming to 1.5 degrees, the NYK Group confirmed that it will make efforts to mitigate direct and indirect emissions from business activities and employ CDR to address the balance of emissions so that the net-zero emission target is achieved by 2050.

We do not anticipate overnight change capable of providing the necessary capacity for carbon removal equivalent to the scale of residual emissions from all relevant industries, especially hard-to-abate sectors such as aviation and maritime transportation, which operate worldwide and rely heavily on energy-dense fossil fuels.

…NYK Group highlighted.

As stated, some CDR concepts with low technology maturity are still in the early stages. MRV (measurement, reporting, and verification) has not been well established, and commercial markets are under development.

Nevertheless, CDRs are slowly but steadily moving from research laboratories to practical applications. A global framework to promote the use of CDR is important to break through the circumstances and accelerate CDR capacity.

A carbon credit is a mechanism for one party to compensate another for the action of reducing, avoiding, or removing carbon. There are three carbon credit types, each with a different net-emissions impact: carbon reduction, carbon removal, and carbon avoidance.

Additionality is also a key factor for consideration. From FY 2025, or earlier if practical, NYK Group will commence the procurement and retirement of qualified CDR credits at a reasonable pace and scale to build up the capacity of neutralization of residual emissions toward 2050.

Through integration of the essential environmental value to remove GHGs from the atmosphere and the corporate-emission mitigation portfolio, the industry can expect the following:

To neutralize residual emissions with scale.
To rationalize the GHG abatement cost for hard-to-abate sectors (price ceiling effect).
To comply with the coming mandatory requirements.