Microsoft surpasses Q2 2025 record in carbon credit purchases for durable carbon removal, boosting MSFT stock significantly.
In Q2 2025, the global Carbon Dioxide Removal (CDR) market witnessed a significant surge, reaching a total volume of 15.48 million tonnes. This growth is expected to continue, with predictions of the market reaching $50 billion by 2030 and potentially surpassing $250 billion by 2035.
The top CDR methods in Q2 2025 were dominated by Bioenergy with Carbon Capture and Storage (BECCS), Biochar, and Advanced Direct Air Capture (DAC) systems. Among buyers, Microsoft was the leading purchaser, accounting for 93.8% of the durable CDR credits bought in that quarter. The tech giant acquired 14.6 million tonnes through five major deals with suppliers such as AtmosClear, CO₂ Limited, Stockholm Exergi, Exomad Green (biochar), and Hafslund Celsio.
Other significant deals included contracts with Stockholm Exergi, Exomad Green, and Hafslund Celsio. JPMorgan Chase accounted for 450,000 tonnes of BECCS and 50,000 tonnes of DACCS, representing about 63% of the non-Microsoft volume.
Key developments in CDR technology and standards by mid-2025 include improvements in Direct Air Capture, leveraging low-cost, energy-efficient methods that combine extreme cold (from LNG regasification) and porous sorbent materials (physisorbents), expanding DAC deployment opportunities.
The 2025 criteria for high-quality CDR, introduced by Microsoft and Carbon Direct, set new rigorous standards across nine removal pathways, notably including marine carbon dioxide removal (mCDR) approaches like Ocean Alkalinity Enhancement (OAE) and Direct Ocean Removal (DOR). These emphasize durable, large-scale removal backed by robust measurement, monitoring, reporting, and verification (MRV), along with ecosystem monitoring to avoid marine harm.
The durable CDR market nearly doubled compared to all previous quarters combined in Q2 2025, highlighting a surge in corporate climate commitments and large-scale CDR procurement, especially from technology companies. McKinsey and others estimate that durable, engineered CDR could scale into a trillion-dollar sector by mid-century.
However, the CDR market faces challenges such as fragile market liquidity, different credit types that aren't interchangeable, price uncertainty, concerns about delivery risk and credit permanence. These factors are affecting the market's stability.
Interestingly, in Q2 2025, durable credits accounted for just 200,000 tonnes of retirements, while nature-based options reached 11 million tonnes. Buyers aim for durable carbon dioxide removal volumes to equal or surpass nature-based credits by 2050.
Biochar is a key player in biomass carbon removal solutions (BiCRS) and achieved strong delivery performance, making up 89.4% of the 116,800 tonnes delivered this quarter. BECCS and biochar led in both scale and delivery in Q2 2025.
In Q2 2025, eight CDR companies raised $122 million in funding, a decrease from Q1. However, the surge in corporate climate commitments and large-scale CDR procurement suggests a promising future for the industry.
In conclusion, the CDR market is experiencing rapid growth, with Microsoft leading the way in procurement volumes. The market is expected to continue growing, potentially reaching $250 billion by 2035, and the focus is shifting towards marine abiotic methods under stringent new standards. The challenges facing the market, such as fragile market liquidity and price uncertainty, will need to be addressed to ensure its long-term stability.
- The rise of the Carbon Dioxide Removal (CDR) market, expected to reach $50 billion by 2030, is driven by significant investments in technologies like Direct Air Capture (DAC), Bioenergy with Carbon Capture and Storage (BECCS), and Biochar.
- investments in Carbon Dioxide Removal (CDR) have been dominant in the environmental-science sector, with Microsoft being the leading purchaser of durable CDR credits, acquiring 14.6 million tonnes through various deals with suppliers.
- Science and technology are playing crucial roles in advancing Carbon Dioxide Removal (CDR) methods, with developments like low-cost, energy-efficient Direct Air Capture (DAC) techniques using porous sorbent materials and extreme cold.
- The CDR market is facing challenges such as market liquidity, price uncertainty, and delivery risk, but the focus on marine abiotic methods under stringent new standards, such as Ocean Alkalinity Enhancement (OAE) and Direct Ocean Removal (DOR), signals a potential long-term solution for climate-change mitigation.
