The carbon dioxide removal, or CDR, market grew significantly in 2024, reaching nearly 8 million metric tons, a 78% increase over 2023.
According to a cdr.fyi report, the growth was primarily driven by repeat buyers such as Microsoft, Google, and Stripe, who accounted for about 80% of CDR purchases.
Microsoft led the market with 5.1 million metric tons, making up 63% of the total volume. The top 20 CDR purchasers in 2024 were Microsoft, Google, Meta, and Salesforce, who created the Symbiosis Coalition, promising to purchase 20 million metric tons of nature-based CDR by 2030.
| The Microsoft Casestudy |
| Microsoft retired 5.5 million carbon credits in 2024, focusing on innovative carbon removal technologies, with 80% coming from bioenergy with carbon capture and storage (BECCS) projects. Despite high costs, Microsoft remains committed to becoming carbon-negative by 2030. The 2024 carbon market saw increased interest in high-quality projects, with renewable energy and forestry credits declining from 80% in 2020 to 70%. Challenges include an oversupply of credits and the limited impact of older Clean Development Mechanism offsets. |
However, demand remains insufficient to support the increasing number of suppliers, with only 36% of CDR suppliers listed on CDR.FYI registered a sale in 2024. This could lead to consolidations and bankruptcies in 2025 and 2026.
To ensure future growth, more industries are needed, including manufacturing, transportation, and retail. Venture investments in the CDR sector dropped 30% year-over-year in 2024 as investors exercised caution, the organization said.
Price Wars: Cheap vs. Costly CDR
As per CDR.fyi, the weighted average price per tonne decreased from $490 in 2023 to $320 in 2024.
Biochar-based removal credits were cheaper, while direct air capture (DAC) credits remained costly due to high tech and operation expenses. The high price of high-quality CDR solutions continues to be a barrier to wider corporate adoption.
To make CDR more accessible, costs must come down through technological advances and economies of scale.
Durable CDR deliveries hit 318.6K metric tons in 2024, a 120% rise from 2023. However, the delivery-to-booked volume ratio was just 4.4%.
Significance of government policies:
Government policies and incentives are critical to sustaining growth in the CDR market. Technological advancements are making carbon removal solutions more efficient and affordable, but scalability remains an issue.
Despite strong growth, the CDR market faces key challenges: dependence on a few buyers, high costs, regulatory uncertainty, and technological barriers. With continued investment, innovation, and policy support, CDR could become a key component of global climate action, helping meet net-zero goals more effectively.
