The Carbon Removal Market Isn’t Scaling Fast Enough, What Needs To Change?

The carbon removal market is, in many ways, a classic policy problem. Companies know they need to act. Governments are inching toward regulation. Investors see opportunity, but they also see risk. And sitting in the middle of it all is a market that should be booming—but isn’t yet. The 2025 Carbon Dioxide Removal (CDR) Market Survey, conducted by CDR.fyi and Sylvera, offers a fascinating look into why this is happening and what might come next.

Why Market Forces Alone Won’t Solve Carbon Removal

One of the more striking findings from the survey is that corporate demand for durable carbon removal isn’t being driven by internal sustainability commitments. It’s being driven by emerging regulatory frameworks. Sixty-five percent of respondents pointed to clearer net-zero standards—like those being developed by the Science Based Targets initiative (SBTi) and ISO—as the primary motivator for buying durable carbon credits.

This is telling. It suggests that, left to their own devices, most companies won’t prioritize high-durability removals. Not because they don’t see the value in them, but because the short-term business case isn’t obvious. Nature-based removals, while less permanent, are cheaper and easier to explain to customers and investors. And without strong regulatory guidance, companies can still claim net-zero status with lower-cost solutions.

That said, many buyers today aren’t just reacting to regulations—they’re actively looking to accelerate the industry. Early development of the nascent carbon removal sector was cited as the dominant motivation for purchasing by 83% of buyers. This suggests a strong willingness among early adopters to pay a premium to help the market mature.

What this means is that the market for durable CDR is waiting on a policy signal. If standard-setters require permanent removals for net-zero targets, demand will rise. If they hedge, leaving room for lower-cost solutions, durable CDR could remain a niche product for another decade.

“The only path to scale durable carbon removal to meet net zero targets is for purchasers to engage.” said Alexander Rink, CEO of CDR.fyi. “Unless standard setters and policymakers step up now to provide guidance and incentives, it is clear the market will stall, and we will miss our climate targets. They act now, or we will all face the consequences.”

Nature-Based vs. Durable CDR: The Structural Challenge

The survey also reveals an important shift in corporate purchasing patterns. Today, nature-based removals outnumber durable removals by a factor of six to one. But by 2030, that ratio is expected to narrow to less than 2:1.

That sounds like progress, but there’s an underlying challenge here: More than 35% of companies surveyed still have no plans to buy durable removals by 2050. That’s a problem, because most long-term climate models suggest that durable removals will need to play a major role in balancing hard-to-abate emissions.

Part of this reluctance is about cost, but part of it is about uncertainty. If you’re a company setting a net-zero strategy today, you don’t know what the rules will look like in 2030. You don’t know if regulators will require durable removals, or if nature-based credits will still be an acceptable way to meet your commitments. So the rational strategy, in many cases, is to wait.

This is the policy vacuum at the heart of the CDR market. Until governments and standard-setting bodies offer clear, enforceable guidance, most companies will hedge their bets.

Despite this, the demand trajectory is encouraging. In 2024, 76% of purchasers are buying fewer than 10,000 tonnes of removals, but by 2050, more than 55% expect to purchase over 25,000 tonnes annually, and 17% anticipate buying over 1 million tonnes. The market is set to grow—if suppliers can meet this demand at a viable price point.

Price: The Market’s Biggest Friction Point

It’s easy to think of carbon removal as a technology challenge—make it better, and companies will buy it. But the survey suggests that price is the real barrier. Suppliers report that they need at least $140–$340 per ton to break even, while buyers expect to pay significantly less.

This is a classic market mismatch. Early adopters, mostly large tech firms, have been willing to pay high prices to support market development. But as the buyer base expands, price sensitivity increases. And if suppliers can’t lower costs, demand could stagnate.

This also raises an uncomfortable question: Can durable CDR scale without public subsidies? The history of clean technology suggests that without government intervention—through tax credits, procurement mandates, or direct investment—markets often develop too slowly. If durable carbon removal follows the same trajectory as solar or wind, policy will have to do more of the heavy lifting in the early years. But the reward is significant—renewables are the fastest-growing energy source today and are cheaper to deploy than fossil fuels in many jurisdictions. The same can be true for CDR in the 2030s.

The Supply Problem That No One Talks About

One of the most revealing data points from the survey is that 55% of suppliers haven’t sold a single credit, and 73% haven’t delivered one. That’s a remarkable statistic, and it speaks to one of the biggest risks in the market: supply uncertainty.

For buyers, this creates hesitation. If you’re a corporate sustainability officer, the last thing you want is to commit millions of dollars to removals that may never be delivered. And for financial institutions, it raises questions about whether CDR projects are bankable. If suppliers can’t prove they can scale, they’ll struggle to secure the funding needed to build out their infrastructure.

This is another area where policy could play a role. Governments could offer guarantees for pre-purchased credits, helping to de-risk investment. They could also create incentives for companies to enter long-term purchase agreements, ensuring a steady demand signal for suppliers. Better yet, governments could directly procure carbon removals. For example, the Government of Canada recently launched a $10 million pilot procurement program to purchase carbon removal credits to offset its operational emissions.

Different Technologies With Different Paths

Among durable removal solutions, Enhanced Rock Weathering (ERW) has been receiving increased attention, with survey data showing its share of purchases could rise from 15% to 42% by 2030. But while this signals growing interest, ERW still faces hurdles in terms of large-scale deployment and verification. The process, accelerating the natural weathering of minerals to capture CO2, has theoretical potential, but real-world implementation remains in early stages, and measurement challenges persist. Its scalability depends on advancements in monitoring techniques and industry-wide standardization.

Direct Air Capture (DAC), on the other hand, represents a more technologically mature, if still cost-prohibitive, pathway. Unlike ERW, which relies on natural processes, DAC directly pulls CO2 from the atmosphere using engineered systems. The challenge is energy intensity—most DAC plants require significant power inputs, making their viability contingent on cheap, clean energy. Still, DAC offers a level of measurability and permanence that few other solutions can match, making it a critical component of long-term carbon removal strategies.

The question isn’t which technology will win out—it’s whether policy and investment will create the conditions for multiple durable removal pathways to scale. ERW and DAC each have their own advantages, and their future will likely be determined by how effectively they can lower costs, improve efficiency, and integrate into broader decarbonization strategies.

What Comes Next?

The 2025 CDR Market Survey paints a picture of an industry at a crossroads. The core challenges are clear:

• Net-zero standards are the key policy lever. Companies are waiting for clear rules before committing to durable removals.
• Nature-based removals still dominate, but durable removals need to scale. Without stronger policy signals, many companies will delay purchases.
• Price is the biggest constraint. Until costs fall, demand will be limited to companies with deep pockets and strong climate mandates.
• Supply is uncertain. Many suppliers have yet to deliver credits, making large-scale commitments risky for buyers.
• Multiple durable solutions are emerging. ERW and DAC are both promising, but each faces distinct challenges that will determine their long-term role.

The key takeaway here is that the carbon removal market isn’t just about technology—it’s about policy, pricing, and trust. Companies are willing to act, but they need guardrails. Markets need clear price signals. And suppliers need capital to scale. Without intervention, progress will be slow. With it, durable carbon removal could become a foundational pillar of global net-zero strategies.

The big question isn’t whether durable CDR will be needed—it will be. The question is whether we’ll build the systems to make it happen at the speed we need.

Disclaimer: I work for carbon removals project developer Deep Sky.