A 2026 Q1 market report published by CDR.fyi shows that durable carbon removal experienced its largest quarter so far, with 2.3 million tonnes contracted, equal to ~560% of Q1 2025 volume.
The report observes that Microsoft led the quarter with a 1 million tonne agreement, while more than 113 other purchasers contracted for 1.3 million tonnes, the third-highest non-Microsoft quarterly volume on record.
In terms of CDR pathways, biochar continues to lead in this quarter too, accounting for 93% of volumes contracted in Q1. The publication shows that biochar was the method used in all of the top five CDR transactions, which accounted for approximately 91% of the tonnes contracted in this quarter.
The report also notes that while Q1 of 2026 is strongest on record for a year’s opening quarter, it also shows a significant step down from the exceptional CDR pace of mid-2025.
This trend demonstrates the issue of a concentrated handful of CDR buyers accounting for large shares of total market volume, highlighting a challenge that the market continues to face in driving participation.
In that regard, buyer concentration remains a core topic in this quarter too, in which Microsoft accounted for 43% contracted volume, while software buyers, CDR intermediaries, and financial services led sector demand.
Delivery and retirement volumes remain strong during this period. The market assessment shows that Q1 2026 was the second-highest quarter on record for both deliveries and retirements, with 145K tonnes delivered and just over 100K tonnes retired. In a year-over-year perspective, deliveries were up 67%, despite a seasonal decline from Q4 2025.
The report also shows that intermediaries played a central market role, facilitating 74% of contracted tonnes—the highest quarterly share in CDR.fyi records.
Relevant: New CDR.fyi Report Shows The Demand Structure And Role Of Major Buyers In Durable Removals
In an overall picture, transitioning from 2025 into Q1 2026, the CDR market was driven by large deals, with the megadeals primarily from Microsoft, as the wider ecosystem struggles to maintain the upbeat 2025 pace.
According to CDR.fyi, this may well continue to be the case until more favorable policies and market incentives enter into force to power up the sector.
