State of the Market: CDR (2025)

AlliedOffsets has released its State of the Market: CDR (2025) report, offering the most comprehensive snapshot to date of the carbon dioxide removal (CDR) sector in the first half of 2025. The findings reveal strong early-year momentum, including the highest-ever volume of CDR credits sold in a six-month period, but caution that current delivery levels remain far from what’s needed to meet net-zero targets by 2050.

With technical CDR needing to scale to 6–10 Gt CO₂ per year by mid-century, the report highlights the critical need for accurate and reliable data, diversified investment, and broader buyer participation as the market continues to grow. 

To learn more about the current state of the CDR market, download the full report below, or scroll down for an overview of what we cover in the report ⤵️

This report offers a snapshot of progress in the first half of 2025, including: 

Market Highlights

• 16 million credits were sold in the first six months of 2025 - marking it the strongest start to a year so far.
• Microsoft alone accounted for 92% of all purchases, continuing to play a pivotal role in overall market activity.
  
  

Technology Trends in CDR 

• Biomass-based CDR (including BECCS, biochar, bio-oil, and burial) contributed to a staggering 94% of total volumes in the first half of 2025. 
• Yet, investment remains heavily skewed towards DAC and Utilization projects, even though other CDR types may offer scalable and cost-effective solutions.
• Greater public awareness and capital redirection are needed to support diversification of the investment into CDR technologies. 

CDR Buyer Trends in 2025 

• Financial services firms led in unique buyer counts for CDR transactions, but the technology sector led in purchase volume, with over 50 million credits bought to date.
• Notably, 50% of buyers in the first half of 2025 were first-time participants, contributing around 6 million credits which represents a positive sign for market growth.

CDR Supplier overview and supply trends from 2025 

• Atmosclear, Stockholm Exergi, and CO280 together accounted for 75% of the credits supplied this year.
• Gigablue made headlines by delivering the first major marine CDR (mCDR) offtake agreement.
• The U.S. leads forecasted supply, followed by European nations based on committed offtakes.

Pricing Insights

• Nature-based CDR prices doubled, rising from $17 in Dec 2024 to $35 in mid-2025.
• The average retirement price for technical removals is around ~$180, while avoidance projects continue to average ~$3. This growing price differentiation highlights the premium associated with durable removals.
  
  

The Current State of the CDR Market Without Microsoft

• Removing Microsoft from the equation would shrink the market from 38 Mt to just 8 Mt. However, the market has continued to grow without Microsoft, albeit at modest volumes.
• 25 projects named Microsoft as their first buyer, and 16 of those had no other buyer. Their dominance shows both the opportunity and the fragility of current market dynamics.

Challenges & Outlook

• Biomass feedstock constraints may soon affect scalability and cost in biomass-based CDR.
• Alternative approaches like Enhanced Rock Weathering (ERW), mineralization, and marine CDR are gaining momentum and deserve more attention.
• While public investment is slowing, private capital continues to push the market forward.
  
  

Conclusion

The CDR market remains nascent, with rapid evolution underway.Reaching the goal of 6–10 Gt of annual CO2 removals by 2050 will require more buyers, robust delivery infrastructure, trust in newer technologies, and a diverse investment portfolio across CDR pathways.

To learn more about the current state of the CDR market, download the full report now.