Q1 2025 Carbon Dioxide Removal (CDR) Market Update

Market Overview: Carbon Dioxide Removal 

The first quarter of 2025 saw approximately 780,000 CDR credits contracted, marking a 122% increase compared to Q1 2024. This makes it the second-best start to a year in terms of volume contracted to date*, highlighting growing momentum in the CDR market.

• January recorded the highest deal volume of the quarter with over 467,000 tonnes contracted, led by Google and skies fifty..
• February was relatively quieter, with 56,000 tonnes transacted, led by a major purchase from Frontier.
• March saw a strong resurgence, with deals totaling over 267,000 tonnes, led by frontier and Mitsui OSK Lines.

* This is reflecting data till 31/03/25

Dominant Carbon Removal Methods

This quarter was dominated by biomass carbon removal & storage (BiCRS) and marine CDR (mCDR), which together accounted for approximately 80% of total purchases in Q1 2025.

BiCRS: it encompasses a range of biomass-based techniques, including bio-oil sequestration, biochar carbon removal, and BECCS (Bioenergy with Carbon Capture and Storage). These methods utilise biomass to capture CO2 from the atmosphere and store it in stable forms for long-term removal.

Suppliers Q125

• Charm Industrial – Bio-Oil Sequestration and biochar
• Exomad Green – Biochar Carbon Removal
• Varaha – Biochar Carbon Removal
• Inherit Carbon Solutions – BECCS
• The Carbon Removers – BECCS
  
  

mCDR:

Technologies that leverage ocean processes to remove CO2 from the atmosphere - either by enhancing the ocean’s natural capacity to absorb carbon or by storing carbon-rich biomass in marine environments.

Suppliers Q125

• Gigablue – ocean fertilisation
• Captura – direct ocean capture

Top Buyers

Leading buyers this quarter were:

• Google
• SkiesFifty
• Nordea
• Frontier

These four accounted for nearly 70% of total purchases. Overall, there were 13 unique buyers, 6 of whom were first-time buyers - a promising sign for the CDR market.

First-time buyers of CDR include:

• TikTok
• Two Distillery
• Mitsui OSK Lines
• Faratvn
• Nordea
• SkiesFifty

Policy and Methodology Developments

Government Initiatives:

• The Canadian government announced investments in carbon capture technologies and launched the Direct Air Carbon Dioxide Capture and Geological Storage (DACCS) offset protocol.
• A bill proposing an $80 million CDR procurement budget was introduced in California.
• The UK government published an independent review of CDR methods.

EU Policy:

• The European Commission released the Clean Industrial Deal, recognising the need for a CDR business case, though concrete deployment incentives remain limited.

Net Zero Standards:

• The Science Based Targets initiative (SBTi) formed expert working groups to update its Corporate Net Zero Standard, now allowing CDR to be included in corporate climate strategies - though only for Scope 1 emissions.
• A draft version of the updated standard was released for public consultation.

Methodology Advancements:

• Puro.earth launched new methodologies for public consultation for ocean biomass deposition and Direct Air Capture and Ocean Storage (DACOS), and updated its Enhanced Rock Weathering (ERW) methodology.
• Isometric introduced a new protocol for River Alkalinity Enhancement (RAE) and explored Energy-from-Waste (EfW) with CCS potential. 

Financing and Investment

Total private investment in carbon removal this quarter reached $357 million which is up by 40% as compared to Q1 2024.

The majority of this capital was directed towards Direct Air Capture (DAC) and Utilization (UTL) projects. This continues the trend from previous quarters, reflecting ongoing support from private investors for scalable and high-permanence CDR solutions.

Market share of each CDR Type

The following chart shows volume and estimated value of purchases or retirements for each technology.

Conclusion & key take aways from Q1 2025

Public opinion initially suggested that the Trump administration's rollback of climate-related commitments could hinder activity in the CDR market. However, it may still be too early to assess the full impact. Despite these concerns, investment and purchase activity in the market have continued to grow steadily. 

This quarter (Q1 of 2025) has seen marine CDR picking up significantly, with an 80% cumulative growth indicating that more companies believe in its potential. Companies appear to recognize the ocean’s vast carbon storage potential, even if some challenges persist, such as its lower Technology Readiness Level (TRL), complex monitoring requirements, and the need for standardized methodologies.

Overall, most CDR issuances have come from BICRS methodologies, primarily Red Trail Energy and Exomad Green.

Meanwhile, Microsoft continues to dominate the technical removals space, accounting for about 57% of purchase in the market, with its portfolio mainly focused on BECCS (Bioenergy with Carbon Capture and Storage). 

Demand for CDR is expected to grow, however, it may not scale as quickly as some anticipate. Still, with initiatives like CORSIA and SBTi gaining traction, the future looks promising.

The adoption of removals within compliance markets has been under discussion, with consultations and expert working groups involved. Both the UK ETS and EU ETS are seriously considering integrating removals, which could further drive demand. The earliest possible implementation date appears to be around 2028–2030. It may not be immediate, but it’s certainly encouraging that the largest compliance systems are considering such integrations.

Currently, the total number of CDR credits purchased to date stands at approximately 175 million, of which technical CDR accounts for about 37 million.