In 2024, pre-purchases of durable, engineered carbon dioxide removal (CDR) credits in the voluntary carbon credit markets reached a new record high. Corporate demand for these high-quality credits continues to outstrip supply, driving the scale-up of emerging carbon dioxide removal technologies. With the increasing overlap of voluntary and compliance carbon markets - such as mechanisms for Article 6.4 of the Paris Agreement - the business case for CDR technologies is solidifying.

 

"Carbon Dioxide Removal (CDR) 2025-2035:, Technologies, Players, Carbon Credit Markets, and Forecasts" provides a comprehensive outlook of the emerging CDR industry and carbon credit markets, with an in-depth analysis of the technological, economic, regulatory, and environmental aspects that are shaping this market. In it, IDTechEx focuses on technologies that actively remove CO₂ from the atmosphere and sequester it into carbon sinks, namely:

1. Direct air carbon capture and storage (DACCS), which leverages chemical processes to capture CO₂ directly from the air and sequester it in geologic formations or durable products.

 

2. Biomass with carbon removal and storage (BiCRS), which involves strategies that use biomass to remove CO2 from the atmosphere and store it underground or in long-lived products. It includes approaches such as BECCS (bioenergy with carbon capture and storage), biochar, biomass burial, and bio-oil underground injection.

 

3. Land-based CDR methods that leverage biological processes to increase carbon stocks in soils, forests, and other terrestrial ecosystems, i.e. afforestation and reforestation and soil carbon sequestration techniques.

 

4. Mineralization CDR technologies that enhance natural mineral processes that permanently bind CO₂ from the atmosphere with rocks through enhanced rock weathering, carbonation of mineral wastes, and oxide looping.

 

5. Ocean-based CDR methods that strengthen the ocean carbon pump through ocean alkalinity enhancement, direct ocean capture, artificial upwelling/downwelling, coastal blue carbon, algae cultivation/marine seaweed sinking, and ocean fertilization.

These CDR technologies are at a wide range of technology readiness levels. Durable, engineered CDR technologies that have potential for vast scale deployment - such as DACCS and BECCS - currently receive government support through subsidies or tax credits (such as the 45Q tax credit in the US) alongside generating revenue from voluntary carbon credit markets as businesses seek to address scope 3 CO2 emissions. These technologies are expected to make the biggest contribution to carbon credit revenue in 2035 according to IDTechEx forecasting.

 

DACCS reaches the megatonne scale in 2025

In 2024, DAC pioneer Climeworks inaugurated the world's largest direct air capture facility, removing 40,000 tonnes per year of CO2 from the atmosphere. With the completion of 1PointFive's Stratos facility in 2025, DACCS will be catapulted to the megatonne scale. While large-scale facilities are reducing costs, there are now over a hundred companies active in the DACCS space, seeking further improvements that can lower capture costs. With different sorbents, regeneration methods, and equipment designs being pursued, DACCS continues to see significant public sector and private sector funding. By considering economics and energy demand, this report examines which direct air capture technologies are likely to be most successful.

 

Accelerating electrochemical methods of carbon dioxide removal

All forms of durable, engineered carbon dioxide removal technologies have been scaling up because demand for high quality carbon credits currently outstrips supply. One interesting trend is the growth in electrochemical CDR. Energy demand can often be a significant contributor to capture cost. In recent years, several start-ups have begun to develop electrochemical methods of carbon dioxide removal in search of increased energy efficiency and better compatibility with intermittent renewable energy sources such as wind and solar. Electrolysis and electrodialysis technologies are the frontrunners in the direct ocean capture space, and similar pH-swing electrochemical methods have seen increased investment interest for direct air capture. This report analyses the reality of electrochemical CDR - including economics, manufacturing and supply chain development, technical challenges, and key players.

 

Comprehensive analysis and market forecasts

This IDTechEx report assesses the CDR carbon credit market in detail, evaluating the different technologies, latest advancements, and potential adoption drivers and barriers. The report also includes a granular forecast until 2035 for the deployment of eight CDR categories (Temperature-based DACCS, electrochemical DACCS, BECCS, biochar, biomass burial, direct ocean capture, ocean alkalinity enhancement, and enhanced rock weathering), alongside exclusive analysis and interview-based company profiles.

 

Key aspects:

This report provides the following information:

 

Technology and market analysis:

• Data and context on each type of carbon dioxide removal solution including direct air capture.

• Analysis of the challenges and opportunities in the nascent CDR (carbon dioxide removal) carbon credit markets.

• State of the art and innovation in the field for direct air capture - including emerging technologies such as electrochemical approaches and equipment design.

• Detailed overview of CDR technologies: land-based, mineralization-based, ocean-based, DACCS (direct air carbon capture with storage), and BiCRS (biomass with carbon capture and storage).

• Market potential (both voluntary and compliance) of CDR carbon offsets.

• Key strategies and economies for scaling up CDR technologies.

• Assessment of requirements (infrastructure, energy, supply chain, etc) for CDR market uptake, with a focus on direct air capture.

• Climate benefit potential of main CDR solutions.

• Benchmarking based on factors such as technology readiness level (TRL), cost, and scale potential.

• Key regulations and policies influencing the CDR market.

 

Player analysis and trends:

• Primary information from key CDR-related companies.

• Analysis of CDR players' latest developments, observing projects announced, funding, trends, and partnerships.

 

Market forecasts and analysis:

• Granular market forecasts until 2035 for durable, engineered CDR solutions, subdivided in eight technological areas.