The carbon removal market recorded a subdued start to the year in terms of absolute volumes, though the breadth of activity remained relatively strong. While overall volumes were lower, the number of deals signed indicates continued engagement across the market.
January has historically been a slower month for CDR activity, and this pattern is consistent with prior years. Based on historical trends, activity is expected to accelerate through the second quarter, particularly between April and June.
Offtake, issuance, retirement, and investment volumes all declined month-on-month. However, this slowdown does not indicate a deterioration in underlying market fundamentals. Rather, it reflects typical early-year seasonality, with momentum expected to build as the year progresses.
Offtake activity totalled 216,037 credits across 26 disclosed transactions during the month, with demand spread across a wide range of carbon removal pathways.
Salesforce was the most active buyer by deal count, completing numerous smaller pre-purchase agreements via Milkywire across DAC, biochar, biomass storage, mineralization, enhanced rock weathering (ERW), and ocean alkalinity enhancement (OAE). These deals were generally sub 1,500 credits, with larger volumes allocated to projects including Interholco, PyroCCS, Carbonsate, Takachar, WasteX, and Planboo, highlighting a continued focus on biomass-based removals.
In contrast, Microsoft dominated total offtake volume, signing the largest deal of the month: a 107,000-credit biochar agreement with Varaha. Other notable transactions included DNV’s 40,000-credit BECCS offtake with Carbon Centric AS, TD Bank’s 44,000-credit agreement with Charm Industrial, and Bain & Company’s 9,000 credit DAC deal with 1PointFive.
Overall, the deal mix skewed toward biomass-based removals, with Microsoft acting as the dominant purchaser by volume.
Total disclosed investment reached approximately $56 million during the month, down 35% month-on-month.
Capital was spread across nine transactions, reflecting a relatively broad mix of carbon removal pathways despite the lower overall total. Investment activity remained subdued compared with recent months, consistent with the typical early-year slowdown in market activity.
Total issuance reached 73,277 credits during the month, down 61% month-on-month.
Issuance activity was led by CO2 utilization (UTL) pathways, which accounted for 41% of total issuance, driven primarily by credit generation from Invert (CarbonCure). Bio-based pathways also contributed meaningfully, with Bio-other accounting for 35% of issuance and biochar representing a further 23%.
Overall, issuance volumes declined in line with broader seasonal trends, though the distribution across multiple pathways highlights continued diversification of supply.
Total retirements reached 15,128 credits during the month, down 86% month-on-month.
Despite the decline, this slowdown aligns with the broader early-year reduction in market activity. The retirements-to-issuance ratio stood at 21%, indicating that credit utilization continued to lag new supply.
Overall, retirement volumes remained modest relative to issuance, reinforcing the ongoing gap between credit generation and end use demand.
To learn more about CDR and general carbon market trends, view our report here.