Microsoft moved to address information about a potential pullback from carbon removal, saying the effort remains central to its climate strategy even as procurement levels may shift.
The company’s Chief Sustainability Officer Melanie Nakagawa said its program “has not ended” and will continue to support a mix of nature-based and engineered solutions. The clarification follows multiple reports suggesting Microsoft had paused purchases, a development that would ripple across a market that has been heavily shaped by its demand.
The company also emphasized that carbon removal complements a broader “reduction, removal, and efficiency” framework. It also noted that it could “adjust the pace or volume” of purchases as its approach evolves, adding that any changes reflect discipline rather than diminished ambition.
Industry reaction
The initial reports and subsequent response from Microsoft have caused a flurry of reactions in and around the carbon removal industry, ranging from concern and reassesmments, to the recognition of long-term progress and more clarity on where the market is in its development.
CDR.fyi produced analysis that acknowledges Microsoft’s and Frontier‘s (an advance market commitment that includes Stripe, Alphabet (Google), Shopify, Meta, and McKinsey) foundational roles while highlighting that there are multiple growth areas beyond them.
According to the carbon removal platform if we look at total tonnage, annual purchases from buyers excluding Microsoft and Frontier Buyers have expanded rapidly. From 2022 through 2024, contracted volumes approximately doubled each year.
In 2025, non-Microsoft and non-Frontier buyers secured about 3.2 million tonnes of carbon removal. That figure is nearly equivalent to the combined totals recorded across 2023 and 2024.
Tank Chen, co-founder of CDR.fyi also focuses attention on the tonnes that have actually been delivered so far: “If we also look at tonnes delivered over the last few years, we see a clear increase in the delivery rate – most of which goes to buyers other than Microsoft and Frontier.
This is a healthy trend and suggests that buyer confidence should only grow with the increasing evidence that certain projects can reliably deliver tonnes. As we approach the 2030 timeline, I expect the growth in CDR purchases will continue to meet voluntary demand for 2030 targets.
Of course, expecting the market to double repeatedly over the next few years (without counting Microsoft) is likely unrealistic. I think what’s worth looking out for and what has been most encouraging is really the absolute tonnes sold (excluding Microsoft) rather than just the growth rate.”
A market with many pillars
He also points toward where he thinks growth in the industry will be coming from. “In the mid-term, I’m most excited about integrating CDR into existing industries. We’ve also seen examples of this in wastewater treatment, water management, food and beverage, construction, agriculture, mining, and paper-and-pulp.
Although most of these are trials, demonstrations, or first-of-their-kind projects, they serve as excellent case studies for advancing CDR technologies in general. They provide opportunities to prove the technologies and learn about their potential and limitations to find the operational and financial sweet spot. All benefit future deployments.”
But structural demand will come from public sources it seems. Hannah Bebbington Valori, Head of Deployment at Frontier, shared on social media that:
“1. The end game for CDR is policy-driven demand (i.e. governments buying directly or otherwise mandating other emitters to buy). The world is going to need gigatons of CDR, which is $X00B’s of annual spend. The voluntary carbon market won’t (and was never going to) scale to the size of this problem.
2. The role of corporate buyers is to get promising technologies proven at scale, so that governments can confidently spend taxpayer money when it’s time to ‘pass the baton’.”
And indeed, CDR is increasingly shaped by public policies rather than voluntary markets. In California, programs like the Low Carbon Fuel Standard integrate carbon removal credits and support procurement pilots. The European Union is advancing a certification framework for carbon removals (CRCF) to standardize quality and enable future compliance demand.
Countries like Sweden and Denmark are piloting reverse auctions for BECCS, while the United Kingdom and Germany are developing subsidy schemes. Japan is also exploring CDR within its Green Growth Strategy, signaling a broader shift toward policy-driven demand.
Read more: New Bill In California Proposes $80M Investment In CDR Procurement
