Carbon Removal Posts Record Q1 in 2026, Driven by Biochar and Big Buyers

The durable carbon removal market opened 2026 with its strongest first quarter ever. According to a new market report from CDR.fyi, Q1 2026 saw 2.3 million tonnes of durable carbon removal contracted, equal to roughly 560% of Q1 2025 volume, setting a new benchmark for the industry's opening quarter.

Microsoft led the quarter with a 1 million tonne agreement, while over 113 other purchasers contracted for an additional 1.3 million tonnes, the third-highest non-Microsoft quarterly volume on record.

>> In Other News: BioCirc Signs 7-Year Agreement With Microsoft to Deliver 650,000 Tons of Carbon Removal Units

Biochar Dominates the Market

Biochar was the clear frontrunner this quarter. The method accounted for 93% of volumes contracted in Q1 and was used in all of the top five CDR transactions, which together made up approximately 91% of the tonnes contracted in the quarter.

The biggest deal came from Liferaft, a U.S.-based biochar company. Microsoft signed a 10-year agreement with Liferaft to purchase one million carbon removal units, generated through large-scale biochar facilities in Iowa and Illinois that source agricultural and municipal biomass from the surrounding region. ESG News

The deal was facilitated by London-based carbon removal marketplace Supercritical, which helped Liferaft meet Microsoft's monitoring and verification standards. MLQ

William Cowell de Gruchy, CEO of Liferaft, said the project will create jobs and provide workforce training in West Liberty, Iowa, and surrounding Muscatine County.

Other notable biochar deals in the quarter included a 500,000-tonne agreement between Exomad Green and CDR intermediary Supercritical, as well as a 305,000-tonne deal between Swiss CDR facility Attitude and Empacar, Bolivia's leading sustainable packaging and recycling company. Google also signed a 200,000-tonne deal with AMP, a company developing AI-powered sortation technology to convert organic material from municipal solid waste into biochar.

Buyer Concentration Still a Challenge

The record numbers come with a caveat. While Q1 2026 is the strongest opening quarter on record, it also represents a significant step down from the exceptional CDR pace of mid-2025.

Microsoft alone accounted for 43% of total contracted volume this quarter, and the broader market continues to rely heavily on a small group of large buyers. CDR.fyi notes this may remain the case until more favorable policies and market incentives enter into force to power up the sector.

Intermediaries Fill the Gap

One area of notable growth: the role of market intermediaries. Intermediaries facilitated 74% of contracted tonnes in Q1, the highest quarterly share ever recorded by CDR.fyi. This suggests that outside the largest in-house procurement teams, purchasers continue to rely heavily on intermediaries for sourcing, diligence, contracting, and portfolio management.

Supercritical led intermediaries by volume, facilitating 1.5 million tonnes, or 88% of total CDR contracted in Q1. Senken and Climeworks Solutions followed, with 105,000 and 40,000 tonnes respectively. Watershed and Climeworks Solutions were also the most active facilitators this quarter, with 28 deals each.

Deliveries and Retirements Hold Strong

It wasn't just contracts that looked healthy. Q1 2026 was the second-highest quarter on record for both deliveries and retirements, with 145,000 tonnes delivered and just over 100,000 tonnes retired. Deliveries were up 67% year over year, despite a seasonal decline from Q4 2025.

Two suppliers, Exomad Green and Varaha, accounted for approximately 70% of total tonnes delivered. Planetary was the largest supplier in the marine CDR category by tonnes delivered.

On the retirement side, Swiss insurance company Swiss Re led retirements with approximately 14,000 tonnes retired to compensate its 2025 operational emissions, followed by Bain & Company with roughly 10,000 tonnes.

Investment Activity

Nine companies raised over $59 million in equity funding in Q1 2026, compared to $75 million raised by eight companies in the previous quarter. Varaha raised $20 million for its projects in the Global South, while Israeli marine CDR company Gigablue announced a $20 million Series A. Germany's Co-reactive, Finland's Carbonaide, and Canada's pHathom Technologies raised a combined total of over $12 million.

About CDR.fyi

CDR.fyi is a carbon removal market intelligence platform that tracks durable carbon removal purchases and deliveries with permanence spanning hundreds to thousands of years. The platform estimates it tracks 97% or more of publicly disclosed durable CDR contracts.