Stockholm Becomes World's Fifth Largest Buyer of Permanent Carbon Removals with 750,000 Tonne Deal

The City of Stockholm has entered into a long-term agreement to purchase 50,000 tonnes of permanent carbon removals annually from Swedish energy company Stockholm Exergi for fifteen years, totalling 750,000 tonnes and making the city the world's fifth largest buyer of permanent carbon removals globally. The deal supports Stockholm's ambition to become territorially climate positive by 2030 and completely fossil fuel-free by 2040, complementing deep emissions reductions with engineered carbon removal to address residual hard-to-abate emissions from construction materials and wastewater treatment. The agreement signals a growing role for municipal governments as anchor buyers of permanent carbon removal, with Stockholm joining a small group of large-scale institutional offtakers helping to build a commercial market for the technology.

 

The Carbon Removal Source and Technology

 

The removals will be supplied by Stockholm Exergi, which operates a bioenergy carbon capture and storage facility that captures carbon dioxide from biomass combustion and stores it permanently. The company has established itself as one of Europe's leading BECCS operators and holds existing long-term removal agreements with major corporate buyers that have contributed to its position as a significant player in the global carbon removal market. The combination of bioenergy generation and carbon capture allows Stockholm Exergi to produce negative emissions at scale within the city's existing energy infrastructure, making it a natural partner for a municipality seeking to address residual territorial emissions.

Anders Egelrud, Chief Executive Officer of Stockholm Exergi, said the City of Stockholm has long been at the forefront of the climate transition and is once again showing leadership in how municipalities, companies and other actors should act by combining deep emissions reductions with purchases of permanent carbon removals. He added that the agreement helps build a new industry and create a market for carbon removals, framing the transaction as contributing to the development of commercial infrastructure rather than simply purchasing a commodity. This perspective reflects the reality that the permanent carbon removal market is still in its early stages and requires large, credible anchor buyers to attract investment in new capacity.

 

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Stockholm's Climate Positive Ambition

 

The City of Stockholm has established in its Environmental Program and Climate Action Plan a goal of becoming climate positive by 2030 and fossil fuel-free by 2040. Climate positive means that territorial emissions within the city boundaries must decrease sharply while greenhouse gas removals must exceed remaining emissions, requiring both aggressive decarbonisation and deliberate investment in carbon removal. Karin Wanngård, Mayor of Finance for the City of Stockholm, said the purchase takes Stockholm to a global leadership position among climate-ambitious cities and sends an important signal at a time when the green transition must accelerate to address the climate crisis.

The carbon removal investment is explicitly designed to complement rather than substitute for direct emissions reduction, addressing a specific category of residual hard-to-abate emissions that remain within the municipal group despite extensive decarbonisation efforts. Hard-to-abate emissions from construction materials, primarily embodied carbon in concrete and steel used in municipal infrastructure projects, and emissions linked to wastewater treatment represent categories where technical solutions remain limited or economically prohibitive in the near term. By purchasing permanent removals to counterbalance these emissions, Stockholm is applying a rigorous interpretation of climate positivity that distinguishes between avoidable emissions that must be reduced and genuinely residual emissions that require removal.

 

Market Significance of Municipal Carbon Removal Procurement

 

Stockholm's emergence as the world's fifth largest buyer of permanent carbon removals represents a significant development in the composition of the voluntary carbon removal market, which has historically been dominated by large technology companies. Municipal governments entering as long-term anchor buyers at this scale provides a new demand signal that can support investment in additional carbon removal capacity and help establish the institutional credibility needed to attract more conservative public sector buyers. The fifteen-year agreement duration provides the revenue certainty that carbon removal developers need to underwrite capital-intensive infrastructure investments.

The transaction also demonstrates that municipalities can play a meaningful role in carbon removal market development beyond simply setting climate targets, by converting those targets into commercial commitments that support the scaling of removal technology. As more cities around the world adopt climate positivity or net-zero territorial goals, the demand for permanent carbon removal is likely to grow significantly beyond what corporate buyers alone can generate. Stockholm's leadership may encourage other climate-ambitious cities to explore similar procurement approaches, particularly in jurisdictions where bioenergy carbon capture and storage facilities are operating or under development.

 

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Outlook for Permanent Carbon Removal Markets

 

The Stockholm agreement reinforces a broader trend in which permanent, engineered carbon removal is gaining commercial traction as awareness grows of the limitations of nature-based offsets and the need for genuinely durable carbon sequestration to complement emissions reduction. The distinction between permanent removal and temporary offsets is becoming increasingly central to both voluntary market quality frameworks and to the design of compliance mechanisms under Article 6 of the Paris Agreement. Municipal anchor buyers who specify permanent removal as a procurement requirement contribute to the market signal that rewards higher-quality, higher-permanence carbon removal solutions.

Whether the permanent carbon removal market can scale to the levels required to support global net-zero pathways will depend on continued growth in both corporate and public sector demand, regulatory frameworks that distinguish permanent removal from temporary offsetting and continued cost reduction as technologies scale. Stockholm's fifteen-year commitment provides a stable foundation for Stockholm Exergi to invest in further capacity and demonstrate the commercial viability of BECCS at the scale needed to attract broader institutional participation. The next phase of the permanent carbon removal market is likely to be shaped substantially by how many other cities and public institutions follow Stockholm's leadership.

 

Source: Stockholm Exergi