ClimeFi Release 2024 CDR Market 'A Year in Review'
Understanding the 2024 Carbon Dioxide Removal (CDR) Market: Trends, Insights, and Implications
The 2024 carbon dioxide removal (CDR) market has experienced significant growth, with notable trends shaping its direction. Below, we outline the critical developments and implications defining this milestone year for the sector.
Offtake Market Trends
The CDR market expanded considerably in 2024, with annual purchases increasing by 7.5 million tonnes of CO₂, making the market 2.4 times larger than in the previous year. Among the key contributors, biomass-based carbon dioxide removal (Biomass-CDR) emerged as the dominant segment, accounting for 82% of annual CDR credit purchases, up from 73% in 2023. Conversely, Direct Air Capture (DAC) experienced a sharp decline, with its market share contracting from 21% in 2023 to 11% in 2024.
While higher volumes of Biomass-CDR credits were transacted, growth in lower-priced credits tempered the overall increase in market value. This dynamic underscores a critical challenge for stakeholders in balancing volume growth with value generation.
Read the full 2024 Carbon Dioxide Removal Market Review
Key Buyer Trends
Buyers demonstrated a continued emphasis on a portfolio approach, sourcing credits from an average of 10 projects. This diversified approach reflects a commitment to securing permanent, high-integrity carbon removals. However, the top three buyers accounted for 90% of total purchases, highlighting a significant buyer concentration. This trend raises concerns about market resilience, as it limits diversification and poses challenges to the sustainability of future supply.
Key Supplier Trends
Supply dynamics in 2024 were concentrated, with two Bioenergy with Carbon Capture and Storage (BECCS) providers—Stockholm Exergi and Ørsted—capturing over 70% of the year’s offtakes. This trend highlights the pivotal role of established suppliers in addressing scalability and reliability challenges within the CDR ecosystem.
Regional Insights
Geographically, Scandinavia and North America led in subsidising private-sector CDR initiatives, with significant attention on BECCS, biochar, and DAC technologies. While 80% of issuances (used as a proxy for removals) occurred in the Americas, 60% of 2023–2024 offtakes were allocated to European projects. This geographic shift underscores Europe’s heightened focus on sourcing high-quality carbon removal solutions.
Read the full 2024 Carbon Dioxide Removal Market Review
Funding and Investment Trends
Although Biomass-CDR dominated transaction volumes, it attracted just 26% of private investment. This is offset by its ability to diversify revenue streams, including income from bioenergy by-products. On the other hand, DAC technologies continued to secure the largest share of private capital, driven by confidence in their long-term scalability and technological potential.
Public funding also picked up greatly, with Sweden and Denmark committing a combined $5 billion to advance the deployment of cutting-edge CDR projects. These public investments reinforce the critical role of government support in scaling transformative carbon removal technologies.
Implications for the Future
The 2024 trends reveal several pivotal dynamics:
- The ongoing dominance of Biomass-CDR highlights its scalability but brings attention to the need for market mechanisms that enhance value creation.
- A continued emphasis on diversification by buyers reflects the importance of risk management and credibility.
- Regional investment and public-private partnerships remain central to scaling solutions and achieving net-zero ambitions.
To delve deeper into these market insights, read the full 2024 Carbon Dioxide Removal Market Review