The fledgling carbon dioxide removal (CDR) landscape is dominated by several dozen large buyers of credits. And while the number of suppliers is expanding (AlliedOffsets tracks nearly 1,000 CDR suppliers in our database), there is still a fairly limited number of suppliers that have been able to actively pre-sell their removal tons. 

A recent Catalyst podcast episode featuring Stacy Kauk, the Head of Sustainability at Shopify – one of the pre-eminent buyers of CDR credits – discussed the various approaches companies have taken to sourcing removals to offset their business. 

The episode focuses on the different approaches to CDR sourcing: portfolio approach vs. picking individual sectors. This blog highlights some of the key players in the market to showcase how their strategy fits into either bucket.

In this blog, we focus on the number of purchases, and the total number of credits purchased, highlighting activity from seven key sectors within CDR:

• Biochar (BCH)
• Blue Carbon (BLU)
• Bioenergy with Carbon Capture and Storage (BECCS)
• Direct Air Capure (DAC)
• Enhanced Rock Weathering (ERW)
• Ocean Alkalinity Enhancement (OCN)
• Utilization (UTL)

Portfolio

As Kauk highlighted, Shopify takes a portfolio approach to its CDR sourcing, having made at least one purchase from each of the seven major sectors we analyze. This is mirrored in the number of credits that Shopify has purchased or pre-purchased:

Likewise, Klarna has taken a portfolio approach to its purchases, splitting them out among a wide range of suppliers:

These first-mover companies, among others, have decided to support a range of solutions in order to help encourage the market to grow. They also get more reputational benefit from the broader approach, as they are seen as taking a more philanthropic approach by supporting untested technologies. 

Other companies / organizations in this group include Microsoft and Frontier:

Strategic Sector

Companies like Airbus and Amazon, on the other hand, have adopted a more sector-specific approach. This allows them to double-down on a single technology, or multiple technologies within the same sector: for example, purchasing credits from several types of DAC companies. The chart below shows the top companies by number of credits pre-purchased, among those who have only sought to offset with DAC credits:

In some cases, like with Boeing and Airbus, the linkups are strategic: by investing in technologies that may enable sustainable aviation fuel in the future, the companies are likely as interested in DAC to gain insights into the technology, as they are for the environmental and offsetting reasons.

Market Overview

In between the two approaches discussed above, there are also companies that have invested in two or three types of CDR. 

Across all CDR buyers, though, the market is skewed towards BCH, DAC, and ERW in the number of deals signed by companies. Most credits, however, have been sold to BECCS companies, in a handful of large transactions, like Microsoft’s purchase from Orsted.

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