Durable carbon dioxide removals (CDRs), which store carbon for hundreds of years or more, are critical tools for firms looking to address residual emissions. Technologies such as direct air capture (DAC), bioenergy with carbon capture and storage (BECCS) and biochar have the potential to lock away billions of tonnes of carbon each year but remain prohibitively expensive for many firms with limited sustainability budgets.
Durable CDRs often come at a cost 50-100 times that of traditional carbon credits for emissions reduced through avoided deforestation, renewable energy projects or fuel switching. As such, buyers are highly concentrated in sectors where profits are high and operational emissions are low, such as Technology, Finance and Business Services.
In 2024, Microsoft alone accounted for 64% of all durable CDR purchases1. When combined with other major buyers from the Frontier CDR Buyers Coalition such as Google, JPMorgan Chase, McKinsey, Stripe and Shopify, this group was responsible for 80% of all purchases. Microsoft has continued to lead in 2025, signing several significant deals for CDRs, including three large deals with BECCS developers CO280, AtmosClear and Stockholm Exergi, which are expected to capture and store over 10 million tonnes of CO2 over the next 15 years.
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Many companies in these sectors face an urgent need to source CDRs to meet near-term net-zero targets. Microsoft, for example, has committed to becoming carbon negative by 2030 for its Scope 1-3 emissions. Google and Apple each aim to achieve net-zero emissions across their operations and value chains by the same year, and Boston Consulting Group has committed to removing more carbon than it emits from 2030 onward with high-quality removal credits. Given consumer, investor and employee pressure to support climate action, these firms are often willing to pay a relatively high price for CDRs to protect their reputations, with the costs representing only a small fraction of their profits.
While such companies are first movers, slow uptake in demand for CDRs from outside these sectors has stoked deep concerns regarding the outlook for the CDR market, resulting in several developers substantially dialing back their growth ambitions.
We examine the causes for this two-speed market, and outline three trends that suggest participation in the CDR market is likely to broaden substantially over time. As declining emissions, falling technology costs and continued profit growth shift the affordability equation. As a result, ability to pay for removals is likely to rise, enabling more companies to participate and setting the stage for a coming boom in CDR affordability and a potential scramble for access.
1. Companies’ emissions are set to decrease
Global emissions remain high but are projected to decline in the coming decades. In advanced economies, emissions intensity per unit of GDP has already fallen significantly. Improvements in energy efficiency, a shift to lower-carbon power sources and tighter regulations are contributing to this trend.
Future global emissions trajectories are uncertain, but projections from the International Energy Agency’s (IEA) Announced Pledges Scenario – which projects emissions if countries fully implement their climate and energy policies and targets – show a steady decline in CO2 emissions through to 2050. In this scenario, emissions fall by just under 70% from 2023 levels by 2050, with the largest emissions reductions associated with power and transportation.
The realization of these projections depends on governments following through on climate targets via policy implementation. While Trump’s policies and the removal of the US from the Paris Agreement does pose a significant headwind to global emissions reductions, recent political momentum for addressing climate change remains strong in the world’s other large economies. The European Commission continues to push an ambitious climate agenda, China has recently committed to producing a detailed economy-wide emissions reductions plan to 2035 and recent elections in Canada and Australia have returned progressive governments with strong climate agendas.
The private sector plays a key role in setting the pace of global decarbonization and continues to show signs of increasing climate ambition across regions. A recent review of 6,000 climate commitments by accounting firm PwC highlights a nine-fold increase in the number of emissions reductions targets and net zero targets over the last five years, of which a net 21% of companies increased their climate ambitions over this period2
As companies make progress reducing emissions, they will have fewer residual tonnes to neutralize to meet their net zero or carbon neutral targets. This means that an allocated budget for carbon credits and removals can stretch further, enabling firms to purchase a portfolio of credits from projects of an overall higher quality.
2. The cost of carbon removals is declining
CDR solutions remain relatively expensive. However, costs are expected to fall rapidly as technologies scale and mature – a trend already underway.
Of the CDR technologies expected to scale, DAC remains the most expensive, currently costing around US$1,000 per tonne. However, costs are falling, supported by increased scale, regulatory incentives and long-term purchase agreements. Leading DAC developer Climeworks has targeted production costs of $400-600 per tonne by 2030 and less than $250 per tonne by 2050. DAC cost trajectories are heavily dependent on achieving cost reductions through economies of scale. If deployment fails to expand sufficiently, costs will remain high. This failure could be due to insufficient demand, inadequate government support or structural obstacles relating to financing long-lived investments with uncertain returns. Alignment of corporate demand, policies and financing models is therefore essential for achieving cost reductions.
Other removal approaches, including BECCS and biochar, are relatively less expensive. In many cases, these currently cost less than $200 per tonne, with some projects looking to deliver removals at a cost of $50-100 per tonne within the next decade. High-quality afforestation, reforestation and revegetation (ARR) credits are already cost competitive at scale, with ARR already available at scale at prices of $20-50 per tonne.
In the US, much of the CDR build-out has been supported by incentives such as the 45Q tax credit, which pays developers for incorporating carbon capture and storage (CCS). Cuts to federal support – a real risk under the second Trump administration – could slow deployment and technological progress. In the EU, there are supportive policies and research funds targeting CDR innovation, including via Horizon Europe, the Innovation Fund and various policies in member states. For example, The Swedish Energy Agency is using state procurement to support BECCS deployment. Stockholm Exergi won the first of Sweden’s reverse auctions (€1.7 billion), helping to derisk the financing of its 800,000-tonne-per-year BECCS facility.
While cost reductions are not guaranteed, a range of actors such as Holocene, Deep Sky and CO280 are deploying new technologies and business models to improve efficiency, scale delivery and reduce costs. These cost reductions make it possible for corporate budgets for carbon removal purchases to go further still.
3. Ability to pay will rise, enabling more buyers
Companies often have limited budgets that they are willing to spend on sustainability. Even Microsoft, a leader in the market, only spent an estimated 0.1- 0.2% of profits in 2023 on carbon credits3. However, this spend has been rising rapidly with the adoption of more aggressive targets to be net carbon negative by 2030 across its Scope 1-3 emissions. In the first four months of 2025 alone, Microsoft already contracted US$2-4 billion in long-term contracts for CDR. While these will mostly be delivered over the next 15 years, they represent a significant uptick in expenditures relative to Microsoft’s 2024 net income of $88 billion.
In our analysis of other firms active in carbon markets, almost all companies spend less than 1% of their overall profits on carbon credit purchases. While this proportion may increase over time as consumer, investor and regulatory pressures grow, it provides a benchmark for assessing how much firms may look to spend on CDRs as part of their decarbonization strategy.
To better identify the current and prospective pool of CDR buyers, we have assessed companies’ ability to pay for carbon credits. This analysis extends a similar analysis by Höglund and Mitchell-Larsen (2022)4 to a broader set of companies and examines how the ability to pay may change over time. Ability to pay assesses how much profit a company makes per tonne of carbon it emits and is recognized as a meaningful determinant of a company’s engagement in the CDR market. As ability to pay increases, so does the affordability of CDR.
Our assessment of around 17,000 companies’ ability to pay for Scope 1-3 emissions shows significant variation across and within sectors. Figure 3 highlights this range within a box and whisker plot.
For the average company looking to offset its entire Scope 1-3 emissions, the current ability to pay for CDR is very low. If companies limit spending on carbon credits and removals to 1% of their profits, the middle half of the firms in Finance and Business Services have an ability to pay $1-7 per tonne, while in the Technology sector, the ability to pay is $1-5 per tonne. Ability to pay is even lower for Consumer, Transport and heavy emitting sectors such as Industry & Manufacturing, Automotive, reaching below $0.50 per tonne for the median firm in Oil and Gas, Power Generation and Aviation.
This highlights the challenges faced by many companies considering the use of CDRs as part of their net zero strategies. Buying CDRs is not the norm. The firms active in the CDR market today are outliers with an ability to pay in the top 1%, like JPMorgan Chase (>$1,000), Apple ($60) and Microsoft ($42)5. These companies are highly profitable and have relatively low emissions. As such their CDR portfolios – heavy in DAC, BECCS, biochar, enhanced weathering and high-quality ARR – can only be replicated by a few similarly profitable firms. It is the speed at which other firms enter this high-spending bracket that will largely determine the future growth of the CDR market.
Ability to pay for a given carbon credit would increase substantially across the board if only Scope 1 emissions are considered assuming the same budget is used for a smaller quantity of emissions; this would increase the median firm’s ability to pay by over 60 times. This is most pronounced in Finance (>$2,000), Business Services (>$400) and Technology (>$250), which are at levels that make most CDR affordable today. The ability to pay of firms in the Consumer and Automotive sectors would also substantially increase, but heavy emitting sectors would still fall far short of the levels required to purchase CDRs at scale.
While corporate emissions are expected to fall, corporate profits will likely continue to grow. Corporate profits grew at an average of 6% annually between 2019 and 2023 across our sample of around 17,000 companies. We expect global GDP to grow by around 3% per annum to 2030. Emerging markets such as India, Sub-Saharan Africa and Southeast Asia are seeing growth in the services and consumer sectors, industries that are typically less emissions-intensive and more profitable, which will expand the future base of potential CDR buyers.
As profits grow, a company’s absolute sustainability spend can scale, and as emissions fall, this spend can be used to neutralize a smaller emissions footprint. These trends compound to increase ability to pay. As companies’ ability to pay increases, demand is likely to shift to higher-quality credits and more durable CDR.
Today, only about 1% of companies have an ability to pay equal to or above Microsoft’s. However, assuming profits grow at the same rate as projected for national economies, companies’ ability to pay will increase over time. This means that more companies could reach an ability to pay equivalent to Microsoft’s current level, with the total number increasing from around 200 companies in 2024 to around 250 companies by 2030, 600 by 2040 and 2,200 by 2050.
Not all sectors will follow the same path. Increases in ability to pay are concentrated in Business Services, Technology and Consumer sectors. Heavy industries may need more time or regulatory incentives before adopting durable CDRs at scale but are likely to play an important role in underpinning longer-term demand for high-quality avoidance and nature-based removal credits.
Additionally, for many sectors, net zero targets are ramping up. Our analysis of sustainability targets for 2,900 companies shows that by 2030 there is a greater than eight-fold increase in total residual emissions covered by active net-zero targets (with target dates of 2030 or earlier) compared with 2025 levels. We forecast residual emissions covered by active net-zero targets will grow a further five times by 2040. In 2030, this demand is concentrated in Technology, Consumer, Business Services and Finance. Heavier emitting sectors will emerge as major demand sources by 2040, including Industry & Manufacturing and Automotive.
The coming CDR affordability boom
As corporate emissions decline and profits grow, the universe of companies with an ability to pay for durable CDRs will expand rapidly. By 2050, the number of companies reaching ability to pay levels greater than Microsoft’s today would grow more than 11 times – accounting for hundreds of millions of tonnes of potential demand. Where only one in 90 companies could afford a Microsoft-style portfolio today, by 2050 this would increase to one in 8 companies.
However, technology cost reductions provide further leverage, with the proportional increase in the number of firms that can pay for DAC significantly higher than would be driven by ability to pay alone. Among the sample of around 17,000 companies considered, we estimate only 8 companies had the ability to pay for a DAC-only portfolio to neutralize their entire Scope 1-3 emissions in 2024. However, by 2030, the number would rise to 31 companies (0.2%), by 2040 to 113 companies (0.7%) and by 2050 to 430 companies (2.5%), a more than 50-fold increase. Furthermore, today only one in 2,000 companies could afford a DAC-only portfolio to reach net zero, but by 2030 this will be one in 500 companies and by 2050 one in 40 companies.
Durable CDR will not be the only beneficiary of this shift, with the market for nature-based removals and high-quality avoidance credits expected to grow. Demand for nature-based removals, particularly ARR, will provide an important part of companies’ plans to meet net-zero targets, while in the next decade new methodologies and standards are expected to support growth in high-quality emissions avoidance and reduction credits.
Capturing the CDR opportunity
Today’s CDR market represents only a fraction of its long-term potential. Under Fastmarkets’ high-demand scenario, we expect a combination of rising corporate willingness to pay and supportive regulation to drive significant growth. The market value of delivered durable CDR could expand from less than US$0.1 billion in 2024 to nearly $50 billion by 2040 and over $100 billion by 2050. However, realizing this trajectory will require more than technological advancement. Innovation in business models and policy design will be essential to accelerate CDR deployment, reduce costs and provide buyers with the flexibility to scale their portfolios and spending over time.
Long-term offtakes have emerged as a key financing model to secure supply and reduce project risk. Used by buyers, including Microsoft, Stripe and JPMorgan Chase, and coalitions such as Frontier and NextGen, long-term offtake agreements provide developers with financeable deal flows to underpin commercial-scale projects. For buyers, they provide cost certainty and the ability to construct portfolios that align with market expectations to move to higher-quality credits over time.
Such offtakes are already enabling suppliers to expand capacity and lower costs. Biochar developers like Exomad Green are scaling operations to convert biomass into durable carbon storage, Climeworks has begun construction on Mammoth, its largest DAC facility to date, and BECCS developers like Elimini and AtmosClear are ramping up their operations across North America. These projects are not only driving technological innovation and scale, but creating replicable commercial models that could further accelerate deployment.
Unlocking the market’s full potential will require that voluntary action is matched with appropriate government policies. Direct support for CDR through subsidies or public procurement has proven an effective tool. The 45Q tax credit in the US is a powerful example of this. It has supported a surge in investment in CDR in the US and acts as a key financing mechanism for developers, including 1PointFive and AtmosClear. However, under the current administration, the outlook for the 45Q tax credit remains unclear, with any repeal of these incentives likely to substantially reduce the flows of investment into CCS-based CDRs in the US.
Another potential source of growth is the inclusion of removals under cap-and-trade systems like the EU emissions trading system (EU ETS). The EU is currently consulting on the role of CDRs within its cap-and-trade system, while other jurisdictions like the UK and Japan are also looking to utilize carbon markets to channel investment into CDRs. Should removals become eligible for compliance use, they could benefit from this broader and more stable demand base. For instance, carbon prices under the EU ETS could exceed €150 per tonne by the end of the decade, providing an attractive long-term price signal.
The path toward a rapid expansion in CDR is becoming increasingly clear. Supply is scaling, costs are falling and buyers’ ability to pay is increasing. With supportive policy mechanisms, these robust tailwinds place CDR on the cusp of a virtuous cycle of cost reductions, enabling greater demand capture. The potential benefits are substantial, unlocking realistic pathways for companies to address residual emissions at scale and positioning CDR technologies to play a critical role in the climate transition.
- [1] CDR.fyi (2025) Keep Calm and Remove On – CDR.fyi 2024 Year in Review. ↩︎
- [2] PwC’s Second Annual State of Decarbonization Report, 2025. ↩︎
- [3] Based on Microsoft’s public 2023 carbon removal purchases as stated in their FY23 briefing paper. Prices paid are not directly stated by Microsoft and are estimated using market averages. ↩︎
- [4]Höglund and Mitchell-Larsen (2022) Bridging the Ambition Gap: A framework for scaling corporate funds for carbon removal and wider climate action. ↩︎
- [5] Figures represent 2023 ability to pay using total Scope 3 emissions as reported in company ESG documents. Differences occur in Scope 3 categories considered by each company. For example, JP Morgan only includes Cat. 6 business travel – not financed emissions. Whereas Microsoft include most Scope 3 downstream and upstream activities. ↩︎
