by Garrett Boudinot, CEO & Co-Founder, Vycarb
If you’ve been anywhere near the carbon removal world these past few weeks, you’re probably as fatigued as I am by the endless hot takes on what Microsoft’s news means for the CDR market. There’s even debate about what the news is. Is it Heatmap’s reporting on the purchasing pause? Microsoft’s nuance to that reporting? The back-and-forth since? As one CDR market intelligence expert aptly put it to me over our combined CDR-and-country music WhatsApp thread, quoting George Strait: “check yes or no” already.
Honestly, I don’t know what any of this means for the CDR market. If four years of working in and around this space has taught me anything, it’s that a volatile, nascent market like this can’t really be predicted. Four years ago, Microsoft, Frontier, and others announced their CDR purchasing plans, and many of us thought it was the start of the boom. Then it wasn’t — at least not in the exponential demand sense — but kind of was, in that the buyer base did broaden. As Bloomberg Opinion columnist Lara Williams noted earlier this week, “If you take Microsoft and Frontier out of the equation, CDR purchases are steadily rising.”
What I do know – and what I don’t see discussed enough – is that the CDR market, and buyers like Microsoft’s leadership within it, has produced new technologies, pathways, and opportunities for decarbonization that extend well beyond CDR itself. To me, that’s the whole point.
Microsoft was clear about its intentions from the start. In their January 2021 white paper, “Microsoft Carbon Removal: Lessons from an Early Corporate Purchase”, they explicitly noted that their goal was, “to take what is currently an immature market for negative emissions technologies—or carbon removal—and expand it as quickly as possible.” It wasn’t just about offsetting their own emissions; it was about creating “a healthy, high-integrity, and affordable market in the coming decade.”
In other words, they were making a deliberate bet on accelerating a technology ecosystem with transformative potential, both for mitigating emissions and for launching a brand new market. When they began injecting substantial capital and demand signals into the CDR sector, it didn’t yet have the commercial infrastructure to survive on its own, and the company was making a gambit to start something that, while new and untested, held transformative economic and climatic potential.
We saw the same pattern on the policy side. When New York State passed the CLCPA, policymakers knew that CDR and new carbon management technologies would be required to hit net zero. But the tech wasn’t there. So the state invested in creating a market, less on the demand side, more on the supply side, with funding for innovation, commercialization, and piloting.
Relevant: Vycarb Secures $5M To Commercialize Its Water-Based, Affordable CO2 Capture And Storage Tech
The same thing played out at the federal level. Under the Biden administration, scientists and policymakers painstakingly modeled net-zero pathways across the country’s multi-billion-tonne annual CO₂ footprint. Even with traditional CCUS, energy efficiency, electrification, and every other known lever pulled, the last slice of decarbonization, over 10%, still required “alternative approaches” – an intellectual way of saying “can someone please figure this out?” DOE threw serious money at that gap: from low-emissions metals recovery for renewables transmission to ocean carbon monitoring for ocean carbon removals.
And essentially all of these mechanisms worked. I was a university researcher studying natural carbon cycling and potential carbon management pathways when Activate New York launched — funded in part by NYS — to support scientists like me working on weird, new, untested decarbonization ideas. That’s how my company, Vycarb, was born. DOE funded our technology development and commercialization work. Early CDR credit sales took our wonky idea and turned it into working demonstration plants actively removing and storing carbon. That, in turn, attracted investors who saw potential in our tech for the broader market of emerging decarbonization incentives.
And that last point is the key one – the broader market of emerging decarbonization incentives.
In developing Vycarb’s technology as a permanent, verifiable, safe approach to CO₂ storage, initially aimed at CDR, we stumbled onto applications well beyond CDR. We had set out to measure carbon removal and storage in water as the unlock for using ocean chemistry for CDR. But as we optimized for CDR buyers and kept running pilots, we realized the tech handles a much wider range of CO₂ sources. It unlocks ocean carbon chemistry not just for CDR, but for industrial decarbonization at scale.
Relevant: Microsoft Reaffirms Commitment To Carbon Removal Strategy
In pilots funded by NYS, DOE, CDR buyers, and private investors, we confirmed the tech can store CO₂ compliant with CDR markets (atmospheric, ambient in water, biogenic), but also CO₂ from industrial facilities, which isn’t CDR-compliant, but is decarbonization nonetheless. We learned from industrial emitters, who began partnering with us, investing in us, and planning for how our tech can integrate into their decarbonization plans. Taking their specific needs into account, we further demonstrated that the tech can take low-purity CO₂ directly, essentially bypassing the need for upstream carbon capture and providing a full-stack capture-and-storage solution in one – a significant breakthrough for CCS and CDR markets.
A few years ago, the hot takes were all about the CDR/CCS distinction: the bathtub analogy, why simply decarbonizing isn’t enough, why historical emissions also need cleaning up. And sure, there are CDR plays that just aren’t CCS and are still good for the climate. But what CDR tech development has shown is that while the CDR/CCS distinction applies cleanly to how corporates and policymakers set targets, it doesn’t apply so cleanly to the technology itself. If an approach can measurably, quickly, and permanently lock CO₂ away, its benefits shouldn’t depend on CDR markets alone.
We’re seeing this across several technology pathways. In the past year, after the Trump administration reduced DAC support, DAC companies have shown that their low-purity capture technology designed for 400 ppm atmospheric CO₂ also works for low-purity CO₂ at point sources. Same tech. Totally different market.
Same story at Vycarb.
That means CDR-born technology is now directly supporting decarbonization pathways across hard-to-abate industries – oil and gas, cement, metals, heavy manufacturing – opening doors to not just voluntary carbon markets, but tax credit and compliance markets as well.
Relevant: New EU Draft Rules Could Disqualify Almost All Existing CORSIA Phase 1 Credits
To be clear, none of this was part of my long-term vision from the start. And that’s what I think is particularly exciting here. When Microsoft pioneered the CDR market, it planted seeds for unexpected technological breakthroughs and created magnets that pulled talent and capital into a new field. The global pipeline for solutions like ours now extends well beyond the original CDR customer base we set out to serve (and to be clear, still do). So really, the market for this broader “carbon management” tech is larger, more diverse, and more resilient than it was even two years ago, in large part because the early buyers like Microsoft, Frontier, Milkywire, and the many single-corporate buyers alongside them had exactly the effect they set out to have: stimulating new tech development for decarbonization.
We’re still confronting a 40-billion-tonne annual CO₂ problem, compounded by a 1.5-trillion-tonne historical legacy. The scale of the challenge hasn’t changed, and the urgency has only grown. But what has changed is that,as the market has evolved, so too have the tools we now have to combat climate change.
The CDR market has, since its inception, depended in large part on a handful of anchor buyers. And while anchor buyers can always walk, the technology they helped create doesn’t walk with them. The capital, talent, and science they pulled into this space have already spilled well past CDR into industrial decarbonization, compliance, and tax credit markets, and new tools for cutting emissions that didn’t exist three years ago. Though it will take time for the implications of Microsoft’s decision to be fully understood, it is already clear that the market they helped establish, and the breakthroughs that emerged through it, will far outlast the involvement of any single buyer.
