CDR Market Shows Record Growth in First Half of 2025

The carbon dioxide removal (CDR) market hit new highs in the first half of 2025, with companies contracting over 61.5 million tonnes of CO2 removal according to the latest data from multiple market trackers.

This marks a massive jump from previous years and signals that CDR is finally moving from experimental to mainstream. Tech giants continue to drive demand, but the buyer pool is expanding beyond Silicon Valley.

Microsoft's Outsized Role

Microsoft remains the 800-pound gorilla in this space. Recently in March and April 2025 the Tech Giant made new commitments:

• 3.7 Million Tons of CO2 from carbon capture of US paper mills emissions with CO280
• 12,000 tons of CO2 from Terradot, developing Enhanced-Rock-Weathering projects in Brazil
• 44,000 tons CO2 from Minneapolis-based biochar

The company's massive purchases have essentially subsidized the entire industry's early development. Without Microsoft's aggressive procurement strategy, most CDR projects wouldn't have the capital to get off the ground. It's a classic case of one big buyer creating an entire market.

After a record-breaking April, which saw nearly 11 million tonnes of CDR contracted, May continued the momentum with over 3.48 million tonnes purchased, which included a 1.75M tonnes extension deal between Microsoft and Stockholm Exergi.

>> In Other News: Gold Standard Launches Framework for High-Integrity Engineered Carbon Removals

Biomass Dominates, But Marine CDR Surges

Biomass-based solutions still rule the roost. Biomass CDR emerged as the most popular pathway in Q1, with companies securing 260 kt of credits, capturing 42.6% of total market volume. Biochar leads the pack here, which makes sense since it's relatively cheap and straightforward to implement.

But here's where it gets interesting: Marine CDR closely followed, experiencing unprecedented growth with 230 kt of credits, accounting for 36% of the market—its strongest performance yet. Marine CDR was barely a blip on the radar two years ago.

Biochar accounted for 86% of all CDR deliveries in 2024, proving its reliability in the market. The technology works, it's scalable, and companies trust it to actually remove carbon.

Pricing Reality Check

The pricing picture tells two stories. Engineered solutions like Direct Air Capture (DAC) are still expensive, hovering around $180 per ton. Nature-based solutions jumped from $17 to $25 per ton by mid-2025. Traditional avoidance credits remain dirt cheap at around $3.

For DACCS, the average Breakeven cost in 2030 is $341/mt. But one supplier answered above $600/mt and several below $300/mt. Another example is Biochar, with an average Breakeven in 2025 of $143/mt. There's still huge variation in what suppliers think their costs will be.

Market Diversification

Good news: the buyer base is finally expanding. Half of all purchases in the first half of 2025 came from first-time buyers. That's crucial because relying on Microsoft forever isn't sustainable.

Just over 1.6 million tCO2e of biochar offtakes were agreed in the first half of the year, from buyers including Microsoft, Google, Shopify, KIRKBI, Supercritical and SAP. You're seeing companies across different sectors jumping in.

What's Next

The market faces some real challenges ahead. Biomass-based approaches could hit feedstock constraints as they scale. You can only source so much agricultural waste before you start competing with other uses.

Meanwhile, newer technologies like enhanced rock weathering, mineralization, and marine CDR are gaining traction. The 2025 criteria mark are among the first comprehensive standards established for abiotic marine CDR, specifically Ocean Alkalinity Enhancement (OAE) and Direct Ocean Removal (DOR).

The real test is whether private capital can keep driving growth as public funding shrinks. So far, the answer seems to be yes, but the market is still heavily dependent on a handful of major buyers.

Bottom Line

CDR is no longer a science experiment. It's becoming a real market with real volumes and real money changing hands. But it's still early days, and the industry needs to prove it can scale beyond the current tech-heavy buyer base while bringing costs down.