Permanence

Last Updated:
February 14, 2024
Permanence explained
The transition to a low carbon economy is on every CEO's agenda nowadays. The impacts of climate change and responses to it will transform every business sector in the coming decades. Although Climate change will affect a majority of companies, all will be expected to contribute to its solution.
Nevertheless, it is challenging for most companies to devise and implement a credible decarbonisation strategy. The transition requires new ways of doing business, including new ways of displaying capabilities and resources and new ways of thinking. But despite the challenges, companies around the world are scaling up their decarbonisation commitments.
We can see this trend with the number of companies committing to reducing emissions. More than 2000 companies have confirmed emissions reduction targets under the Science Based Target initiative (SBTi). Additionally, more than 370 have committed to The Climate Pledge, pledging to achieve net zero emissions by mid-century or sooner.
For most companies and investors, carbon credits play a crucial role in their Net-Zero strategy. They allow companies to make earlier and more ambitious commitments. Credits allow companies to reduce their current emissions through offsets, while taking cost-effective steps to reduce future emissions through asset rotation and business model development. In the long term, credits can play an essential role in offsetting difficult-to-avoid emissions from products for which no low- or zero-emission options exist.
The growing interest in recent years is also reflected in the Voluntary Carbon Market (VCM), which organises the pledging and trading of carbon credits. In 2022, the demand for carbon credits is at its peak. Prices have increased by more than 140% since 2021 and forecasts assume that demand for credits will increase 15-fold by 2030, to $50 billion per year.
But the voluntary carbon market has a problem. It cannot cope with demand. Access, which plays a crucial role in the global effort to combat climate change, is often limited to large organisations and is characterised by opaque pricing and market inefficiencies. Furthermore, due to a lack of transparency and credibility, it has faced a number of problems in recent years.
This report examines the key role for on-chain carbon credits as part of net zero strategies and the VCM. It was prepared by senken to help business decision makers identify and understand the best use of credits for their business.

What is Permanence?

Permanence refers to the longevity and durability of the emission reductions or removals achieved by a project. It assesses the risk that the sequestered carbon could be re-released into the atmosphere, thereby cancelling out the climate benefits.

A project overview venn diagram showing the intersection of permanence, additionality, and leakage
Additionality, Permanence, and Leakage all need to be evaluated together in order to determine the quality of a carbon credit project.

Significance of Permanence

Permanence is critical in ensuring the long-term effectiveness of carbon credit projects. A project with poor permanence is considered to be of low integrity, as it cannot guarantee  any long-term impact. For instance, if a reforestation project fails to look after its trees and they are later cut down or burnt, the sequestered carbon would be released back into the atmosphere. Therefore, permanence is essential in ensuring that the positive impacts of a carbon offset project are sustained over time.

Assessing Permanence in Projects

  • Projects are evaluated for risks such as natural disasters, policy changes, or economic shifts that could compromise the project's longevity.
  • The time period for which carbon is expected to be sequestered is considered. For example, forestry projects often have different risk profiles compared to technological carbon capture solutions, since Nature Based Solutions typically store carbon for much shorter periods than Technological Based Solutions.
  • Projects often include strategies to mitigate risks to permanence, such as insurance mechanisms, diversified project activities, or buffer pools of credits.

Permanence and Durability of Different Project Types:

High quality carbon storage methods such as mineralised CO2, CO2 in concrete, and ocean alkalinity have an expected storage time of over 100,000 years, presenting no practical risk of reversal.

Methods such as geological storage of liquid CO2, biomass burial, deep sea storage of CO2, and soil biochar have an expected storage time of over 1000 years, presenting a very low risk of reversal.

Forest carbon, coastal blue carbon, soil carbon, and untreated biomass in soil have an expected storage time exceeding 100 years, however these projects do present a risk of reversal due to the possibility of natural disasters.

Lastly, projects that involve things such as deferred forest harvesting have an expected storage time of about a year, offering temporary permanence since most or all of the CO2 will be released upon harvesting.

Challenges in Ensuring Permanence

  • The very long term storage solutions are subject to technological barriers that prevent the solutions from scaling to significant levels.
  • Natural disasters like wildfires, pests, or climate-induced changes pose significant risks to the permanence of nature-based projects.
  • Continuous monitoring is necessary to ensure that the projects remain effective over their intended lifespan, and this can be difficult with certain types of projects.