Carbon Removal Contracts Surge to 29.6 Million Tonnes, But Delivery Lags
Durable carbon removal contracts reached 29.6 million tonnes in 2025, but actual delivery remains behind. Equity investment into durable CDR companies fell to USD 836 million in 2024, with Microsoft responsible for 90% of purchase volume. Practical startup opportunities lie in biochar, MRV, and procurement rather than large-scale direct air capture.
The gap between contracted and delivered tonnes highlights how early the durable carbon removal market remains. While conventional methods already account for roughly 2.1 billion tonnes annually, novel approaches contribute only about 1.3 million tonnes per year — a fraction of the 7 to 9 billion tonnes that climate models suggest may be needed by mid-century.
Startup activity is shifting toward practical infrastructure: biochar operations, monitoring and verification software, procurement tools, and project-finance support. With Microsoft dominating purchase volume, founders face concentrated buyer risk, making diversified revenue streams and delivery credibility essential for survival.
The concentration of demand in a single corporate buyer could leave the carbon removal market vulnerable to sudden shifts in purchasing strategy. If Microsoft's commitment wavers, smaller suppliers may struggle to find alternative buyers, potentially slowing innovation. However, the growing contract volume signals that corporate climate commitments may continue to drive demand, creating opportunities for startups that can demonstrate reliable, verifiable delivery.