CDR.fyi has published a 2024 overview report that outlines the developments that happened on the durable carbon dioxide removal (CDR) market.
In a general sense, the report shows a significant market growth, with purchased volumes experiencing an increase of 78% and reaching nearly 8 million tonnes in 2024, while deliveries grew by 120% compared to 2023, totaling 318.6K tonnes.
One of the main concerns that surfaced from this analysis is the lack of new CDR buyers.
80% of all CDR purchases in 2024 were made by only four companies, including Microsoft, Google, Stripe, and Frontier buyers, where Microsoft alone accounted for 63% of the total purchased volume.
These leading industry names are previous buyers that are fulfilling their long-term commitments, and the lack of new buyers raises the question of the sustainability of the CDR market.
The overview showed that in 2024, unique purchasers grew by only 7%, while first-time CDR buyers declined by 18%, marking an alarming stagnancy in this domain.
In 2024, equity capital invested in durable CDR declined by 30%, totaling $836 million. Still, the number of investments and their average size both increased (excluding outlier transactions in 2022 and 2023), which indicates that while massive funding rounds have cooled down, there is still active investor interest.
As for venture investors, they seem to be waiting for solutions to gain traction in sales before deciding to invest.
Relevant: CDR.fyi & OPIS Survey Offers Valuable Insights Into Durable CDR Pricing
Price-wise, the average cost per tonne decreased from $490 in 2023 to $320 in 2024, with most CDR methods experiencing a price decrease except for biochar and mineralization. A recent CDR.fyi report also unraveled a concerning mismatch in price expectations between CDR buyers and suppliers.
Concerns also arose around the price-oriented competition on the CDR market, which is beneficial to suppliers offering attractive prices but could marginalize innovative and impactful solutions that struggle to reduce the price due to lack of demand.
When it comes to unlocking demand, the report mentions the upcoming Science Based Targets Initiative (SBTI) Net Zero Standard 2.0 which will present a vital opportunity in 2025, particularly if it includes mandatory milestone targets for CDR.
Going forward, suppliers should work towards price reductions to attract buyers while commercializing CDR byproducts and saving funds to endure in a time when demand is limited.
The report also stresses the need for stronger policy support for CDR, pointing out that governments can promote CDR growth through catalytic direct investments or subsidies that would stimulate the development of this industry.
Read more: CDR.fyi Announces Big Updates, Streamlining Carbon Removal Acceleration Plan
