Carbon Removal Delivery Assurance Portfolio Planner

Introduction

Buying carbon removal is not the same as receiving verified tons by the date your organization plans to claim them. Projects can slip, MRV (measurement, reporting, and verification) can take longer than expected, and supplier performance can vary across pathways such as direct air capture, biochar, mineralization, or enhanced weathering. This Delivery Assurance Portfolio Planner helps you translate those uncertainties into a simple, comparable set of portfolio metrics: how much to contract, what you can reasonably expect to receive on time, and what the financial exposure looks like if you miss your target.

The model is intentionally lightweight. It is designed for early-stage planning, internal discussions, and scenario testing (for example, “What buffer do we need if reliability is only 65%?”). It is not a substitute for contract-by-contract scheduling, legal review, or a full probabilistic risk model.

How to use the calculator

1. Set your target tons. Enter the on-time delivered volume you need for a milestone period (for example, a reporting year or a public commitment date).
2. Enter your average price. Use a weighted average across the contracts you expect to sign (or are evaluating).
3. Estimate on-time delivery probability. This is a portfolio-weighted probability that contracted tons arrive by your target date. If you have multiple suppliers, you can approximate this as a weighted average by contracted volume.
4. Choose a buffer. Buffer is over-contracting above the target to reduce the chance of missing the target due to under-delivery.
5. Set a penalty per shortfall ton. Use a proxy that reflects make-good purchases, contractual damages, or an internal reputational/compliance cost.
6. Add a diversification bonus (optional). If you believe diversification reduces correlated risk, enter a percentage bonus. The calculator applies it as a multiplier to reliability and caps the result at 100%.
7. Set discount rate and delivery delay. These inputs apply a simple time-value-of-money adjustment to penalties over the delay period.
8. Click “Plan Portfolio”. Review contracted tons, expected delivered tons, shortfall exposure, costs, and NPV. Then iterate by changing one input at a time to understand sensitivity.

Core concepts and formulas

The calculator summarizes a portfolio using a small set of inputs. The key relationships are:

• Target delivered carbon removal: the tons you need to receive on time.
• Buffer purchase: extra contracted tons above the target (as a percentage).
• On-time delivery probability (p): the portfolio-level probability of on-time delivery.
• Diversification bonus: a simplified adjustment that increases reliability to reflect risk reduction from spreading purchases across suppliers/pathways.
• Penalty per shortfall ton: the cost applied to any expected shortfall (modeled linearly).

Expected contracted tons

Contracted tons are calculated from the target and buffer:

ContractedTons = TargetTons × (1 + BufferPercent/100)

Adjusted reliability (diversification)

The calculator applies diversification as a multiplier on the on-time probability and caps the result at 100%:

AdjustedReliability = min(1, (p/100) × (1 + DiversificationBonus/100))

Expected delivered tons and shortfall

Expected delivered tons are contracted tons multiplied by adjusted reliability:

Expected shortfall exposure is the remaining gap to the target, floored at zero:

Shortfall = max(0, TargetTons − ExpectedDelivered)

Costs, penalties, and discounting

Procurement cost and expected penalty value are:

ProcurementCost = ContractedTons × AvgPrice

PenaltyValue = Shortfall × PenaltyPerTon

To account for delivery delay and discount rate, the calculator uses:

The NPV shown by the calculator follows the page’s JavaScript logic:

NPV = ExpectedDelivered × AvgPrice − ProcurementCost − PenaltyValue / DF

Important: This NPV is a simplified planning metric. It treats procurement cost as an immediate outlay and discounts penalties over the delay period. Your real contracts may have staged payments, milestone-based pricing, or different accounting treatment.

Worked example (with numbers you can reproduce)

Assume a team needs 50,000 tons delivered on time. They estimate 72% on-time probability, plan a 35% buffer, and assume a 12% diversification bonus. Average price is $425/ton.

• Contracted tons: 50,000 × (1 + 0.35) = 67,500
• Adjusted reliability: 0.72 × (1 + 0.12) = 0.8064 (80.64%)
• Expected delivered: 67,500 × 0.8064 ≈ 54,432
• Shortfall: max(0, 50,000 − 54,432) = 0
• Procurement cost: 67,500 × $425 = $28,687,500

If you enter these values into the calculator, your results should closely match (minor differences can occur due to rounding).

Scenario comparison (illustrative)

This table provides a quick intuition for how buffer and diversification can change expected delivery. It is illustrative only; use your own supplier data for decisions.

Limitations and assumptions

• Portfolio-level aggregation. The tool uses a single weighted on-time probability rather than modeling each supplier, contract, or delivery schedule separately.
• Diversification is simplified. The “bonus” is a single percentage applied as a multiplier to reliability and capped at 100%. It does not model correlations explicitly.
• Shortfall penalties are linear and based on expected values. Real-world impacts can be non-linear (for example, missing a public milestone may have outsized consequences).
• Discounting is basic. The model discounts penalty value over the delay period and treats procurement cost as immediate. Payment schedules, escrow, milestone payments, and financing structures are not represented.
• Units and definitions vary. “On-time delivery” may mean issuance of credits, verification completion, or physical delivery depending on your program. Align your inputs with your internal definition.

Next steps

Use the calculator to stress-test your plan: try lower reliability, higher penalties, or longer delays to see how much buffer you need to maintain confidence. For procurement committees, consider documenting (1) where your probability estimate came from, (2) why your penalty proxy is reasonable, and (3) what diversification actions (additional suppliers, geographies, or pathways) justify the bonus you enter.