Advocates for carbon removal have long warned of a problem: Because a handful of buyers are responsible for the large majority of purchases, the supply side of the market is not growing fast enough to provide the gigatons of removals the Intergovernmental Panel on Climate Change says will be needed by mid-century.

But now comes tentative evidence that major Japanese companies may help fill that gap.

Mizuho, a Japanese bank with $2 trillion in assets, announced this week it will join NextGen CDR, a company that connects large buyers with carbon removal projects. And a partner working with another major Japanese business, the industrial conglomerate Sumitomo, recently told Trellis that the company intends to purchase 500,000 high-durability credits annually — a significant buy for the nascent removals market.

Prioritizing durability

NextGen is a joint project between climate consultancy South Pole and Mitsubishi, another Japanese conglomerate. The company connects buyers with removal technologies that guarantee to store carbon for at least 1,000 years. These include biochar, direct air capture and storage of carbon from sustainably sourced biomass. NextGen targets an average price of $200 per ton, a relatively low figure in a market where credits can run to $1,000 per ton, and counts Boston Consulting Group, Swiss Re and UBS as founding buyers. Mizuho is the first new buyer to join since NextGen’s launch in 2022.

“It’s very exciting for us — and also reassuring,” said Patrick Bürgi, NextGen’s chairperson and a co-founder of South Pole, referencing recent setbacks in corporate action on climate, including the decision by some large companies to water down emission targets. Bürgi did not disclose the amount Mizuho will spend or the quantity of credits the company will acquire. Data from CDR.fyi, a firm that tracks removal purchases, shows that NextGen has purchased 212,000 credits to date.

In Sumitomo’s case, the purchases are being handled by Carbon Direct, a carbon management firm. An annual purchase of half a million tons would mark the arrival of a significant new entrant into the removals market. The leaderboard of cumulative sales compiled by CDR.fyi is topped by Microsoft (8.2 million tons), a buyers’ coalition known as Frontier (1.1 million) and Google (0.5 million). If its plans are executed, a single year of purchases woul