Record-breaking CDR credit sales fueled market expansion in 2025, marking a significant leap forward.
In the first half of 2025, the market for Carbon Dioxide Removal (CDR) credits experienced a significant leap, with a 122% increase in contracted credits compared to the same period in 2024. This surge can be attributed to the rapid corporate demand driven by ambitious climate targets and the growing adoption of biomass-based removal methods.
Biomass approaches, such as converting farming and forestry waste into carbon-trapping tools, are particularly significant. They provide cheaper, scalable, and more accessible solutions compared to more expensive technologies like direct air capture (DAC). By early 2025, biomass-based CDR methods accounted for about 40% of all credit volumes, reflecting their dominant role in shaping corporate offset strategies, especially among major buyers like Microsoft targeting carbon negativity by 2030.
These biomass projects—often involving biochar and other nature-based solutions—are prized not only for their cost-effectiveness but also for delivering co-benefits like improved soil health and community impacts. The increasing preference for such credits is helping companies maximize carbon removal while aligning with strategic principles like prioritizing emissions reductions first and supporting well-verified, long-lasting removals.
Other factors contributing to the growth of the CDR market include:
- The voluntary carbon market’s expansion, propelled by net-zero commitments and regulatory tightening, making CDR credits essential components of corporate climate strategies.
- The entry of large-scale investors and governments pouring billions into carbon capture and credit projects, enabling technology scaling and market liquidity.
- Developing policies in regions like the EU, which are reintroducing international carbon credits with a focus on environmental integrity, further validating corporate offset use and shaping market dynamics.
Integrated projects like agroforestry, regenerative agriculture, and biodiversity restoration are gaining traction for their multi-benefit environmental impact. Rising buyer expectations around permanence, transparency, and quality are reinforced by new regulations, particularly in Europe, pushing out low-integrity credits.
Digital MRV platforms are transforming the CDR market, offering real-time tracking to boost transparency, prevent fraud, and speed up purchase decisions. The CDR market's value is projected to grow from $842 million in 2025 to $2.85 billion by 2034, while durable carbon credits could reach $14 billion by 2035, growing 38% annually.
As we move towards a more sustainable future, the surge in CDR credits in 2025 marks a significant step forward. The trends observed in this year are causing companies to reorient their offset strategies toward biomass-based solutions as a practical and credible path to carbon negativity. The future of CDR will rely on smarter investments, high-fidelity data tracking, and clear global standards to ensure its continued growth and effectiveness in addressing climate change.
[1] Source: Carbon180 (2025) - [Link to the source] [2] Source: Goldman Sachs (2025) - [Link to the source] [3] Source: European Commission (2025) - [Link to the source] [4] Source: Microsoft (2025) - [Link to the source] [5] Source: International Carbon Action Partnership (2025) - [Link to the source]
- The increasing demand for carbon dioxide removal (CDR) credits is not just a result of corporate climate targets, but also due to the favorable aspects of biomass-based methods, such as their affordability, scalability, and accessibility compared to more advanced technologies like direct air capture (DAC).
- With biomass-based CDR methods accounting for about 40% of all credit volumes in early 2025, it is evident that these approaches play a crucial role in shaping corporate offset strategies, particularly those targeting carbon negativity, such as Microsoft's goal by 2030.
- The adoption of advanced technology, sound regulation, and well-informed investments in biomass projects will be essential in ensuring the continued growth and effectiveness of carbon dioxide removal in addressing climate change, as predicted in the reports from Carbon180, Goldman Sachs, the European Commission, Microsoft, and the International Carbon Action Partnership.
