June 12, 2026
Durable CDR Market Update: From Ambition to Execution
By Alexander Rink
Based on the CDR.fyi presentation at Carbon Unbound East Coast
New York City on May 19, 2026
Highlights
- The durable carbon dioxide removal (CDR) market is growing, but becoming more selective. The market is well on its way in the transition from vision to reality.
- Microsoft’s widely reported pause is a meaningful market stress test, but not the end of market growth. Excluding Microsoft and Frontier, durable CDR purchases grew at a 151% CAGR from 2021 to 2025, while deliveries grew at a 131% CAGR over the same period.
- Delivery tells a more diversified story than purchasing. Ex-Microsoft and Frontier buyers accounted for only 17% of contracted tonnes, but 90% of delivered tonnes and 94% of retired tonnes.
- Biomass Carbon Removal and Storage (BiCRS) methods are leading near-term execution. In 2025, BiCRS accounted for 96% of purchase volume and 91% of delivered volume, with BECCS leading purchases and biochar leading deliveries.
- The next phase will reward execution. Pricing is becoming more method-specific; policy is progressing, but not yet a major short-term demand driver; and financing conditions increasingly favour credible, operationally disciplined suppliers.
Introduction
The durable carbon removal market is growing, but becoming more selective.
That was the core message of CDR.fyi’s Durable CDR Market Update, presented at Carbon Unbound East Coast in New York City on May 19, 2026.
Over the past five years, durable carbon dioxide removal has moved from aspirational visions to real projects, issuances, contracts, deliveries, retirements, pricing data, policies, and financings. Purchases grew rapidly from 2021 to 2025. Deliveries and retirements also increased steadily. Bio-based methods, especially BECCS and biochar, are showing strong near-term momentum.
At the same time, the market benefited from a Microsoft-scale demand wave. Microsoft’s “anchoring scale” buying helped validate the market, galvanized suppliers, and signalled seriousness to other buyers and investors. Its widely reported pause is therefore a meaningful market stress test, and marks the end of the beginning for durable CDR. There is no doubt that the next five years will be different from the last five.
The science and the numbers have not changed. The key questions now are how to broaden demand, increase delivery, bring down pricing, advance policy, standardize processes and frameworks, and create the financing conditions needed for the market to keep progressing as the Microsoft tailwind recedes.
The market is resilient. It is also becoming more demanding.
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A Microsoft-amplified Bull Market
Durable CDR purchase volume grew at a 324% CAGR from 2021 to 2025, reaching 30.4 million tonnes contracted in 2025. That growth was real, but it was also strongly amplified by Microsoft’s market-leading purchases. The market then entered 2026 with its strongest Q1 to date, with 2.3 million tonnes contracted.
That growth was real, but it was also highly concentrated: Microsoft accounted for 78.5% of all disclosed durable CDR tonnes purchased as of April 2026. That level of concentration, which has prevailed since Microsoft announced its first multi-million-tonne order in Q2 2024, raised two significant concerns since we first highlighted Microsoft’s weight in the market in the 2024 Durable CDR Market Update:
- When would more buyers come to market to broaden the base of demand required to fund durable CDR suppliers’ efforts, and validate the market for investors and lenders?
- What would happen if Microsoft’s support were withdrawn?
We now find ourselves in a position to see what the answers to both of those questions will be.
Microsoft’s role has been too large for any single buyer group to replace quickly. Fortunately, we are seeing signs of resilience in the market.
The Rest of the Market is Growing
Excluding Microsoft and Frontier buyers, durable CDR purchases grew at a 151% CAGR from 2021 to 2025.
True, this is a smaller market segment, and it remains lumpy. Purchases outside Microsoft and Frontier have continued to grow, and 2025 Q4 and 2026 Q1 were the strongest quarters to date for this broader buyer base. One or two quarters are insufficient data to constitute a reliable trend, but the direction matters.
Any market that depends on one buyer is not a healthy market. What will increase the health, resilience, and sustainability of the durable CDR market is a broader demand base, capable and motivated intermediaries, public procurement, compliance-linked demand, and a financing and legal infrastructure.
The market is not there yet, but there are encouraging signs.
Delivery tells a more Diversified Story than Purchasing
Purchase volume has been highly concentrated. Deliveries and retirements have been much more distributed.
Excluding Microsoft and Frontier, durable CDR deliveries grew at a 131% CAGR from 2021 to 2025. The market’s total delivery rate also rises materially from approximately 3% to 13% when Microsoft and Frontier’s largely long-term contracted volumes are excluded.
Most encouragingly, ex-Microsoft and Frontier buyers accounted for only 17% of contracted tonnes but 90% of delivered tonnes and 94% of retired tonnes.
Microsoft and Frontier have helped shape the contracted market, and both have played critical roles in catalyzing the first five years of the market’s growth this decade.
Fortunately, the actual delivery and retirement activity is already broader than the headline contracted data suggests. The durable CDR market’s long-term 6-10 Gt annual ambition will ultimately be measured by tonnes delivered, verified, and retired, more than by tonnes contracted.
Bio-based Methods are Execution Leaders
What is driving broader demand, delivery, and retirement activity?
Biomass is having a moment.
In 2025, BiCRS methods accounted for 96% of purchase volume, led by BECCS at 69% of the total. BiCRS accounted for 91% of delivered volume, with biochar at 80% of the total.
Why the dominance? BiCRS pathways are often lower in capital intensity; their feedstocks are often closer to operations, logistics costs can be lower, MRV is relatively clear, and pricing has been accessible to buyers wanting to commit to durable CDR.
Conversely, DACCS remains strategically important, but development has been slower and more expensive than many early expectations. Enhanced weathering, alkalinity enhancement, and marine CDR have high potential, but MRV and regulatory confidence have created friction. Mineralization remains promising, with progress varying by submethod.
While method development has been uneven, multiple high-scale methods are required to achieve global long-term CDR goals. The market is learning which pathways can deliver near-term tonnes, which require more step-change innovation, and where buyer confidence still needs to be earned.
This uneven progress is now showing up in price expectations. As buyers and suppliers gain real-world experience, durable CDR looks less like a single market with a single clearing price and more like a portfolio of methods with different cost structures, risks, timelines, and supply constraints.
More Realistic Pricing
Buyer and supplier price expectations remain apart in 2026, although the gap has narrowed slightly from 2025. Respondents expect the gap to narrow further by 2030, to roughly $48 per tonne across the surveyed market.
At least as importantly, durable CDR is moving toward a method-specific price stack. Different methods have different cost structures, capital needs, risks, delivery timelines, MRV requirements, co-benefits, and durability profiles. A single cross-market price benchmark becomes untenable as the market matures.
Furthermore, for BECCS, and especially biochar, the 2030 expectation is for tighter supply-demand dynamics. As a result, price expectations may not converge uniformly across methods; in some segments, especially biochar and BECCS, tighter supply-demand dynamics could keep prices firmer.
Thus, the pricing story is not simply one of “prices falling”, and especially not to the vaunted US$100-per-tonne ideal. Rather, prices are becoming more grounded in method-level reality.
Buyers are Buying Confidence
What are buyers actually purchasing? For the most part, they are buying confidence.
In the pricing survey, buyers ranked 100-plus-year permanence as the top showstopper. Supplier transparency and supplier reputation also ranked highly, along with price alignment and delivery reliability.
Premium attributes tell a similar story. Buyers reported a willingness to pay more for strong co-benefits, permanence of 1,000+ years, policy alignment, delivery reliability, and registry reputation.
This is an important signal for suppliers.
The market rewards confidence that a supplier can deliver, that the method is credible, that the MRV can withstand scrutiny, that the registry infrastructure is trusted, and that the buyer will not inherit reputational risk.
In an increasingly selective and demanding market, trust is not a nice-to-have. It is a core component of the product.
Aligning Buyer and Supplier Perspectives
The market will scale faster when buyer and supplier perspectives align more clearly.
Purchasers point to price relative to the budget, delivery risk, lack of a business case, lack of a policy incentive, and MRV confidence as key blockers.
Suppliers, on the other hand, point to a lack of a business case, a lack of policy incentives, delivery risk, and price relative to the budget.
Those concerns overlap, but they do not perfectly match.
Buyers are often trying to justify why they should buy now. Suppliers are trying to finance, build, and deliver before demand is fully established. Buyers want confidence before committing. Suppliers need commitments to build confidence.
That creates a catch-22 and timing challenge.
Transparency becomes an essential bridge to trust, helping close the gap by making market activity, supplier performance, delivery history, pricing expectations, and policy signals more visible.
Policy Progress, not a Major Short-Term Demand Driver
Durable CDR policy is moving from recognition to implementation.
Europe continues to lead. Carbon Removals Certification Framework (CRCF) methodologies have been adopted. Permanent removals are being assessed for EU Emissions Trading System (ETS) design. The UK is advancing ETS integration and Contracts-for-Difference (CfD)-style models. Germany is funding CDR. Switzerland and Norway created the first Article 6.2 durable CDR transfer pathway.
Japan’s mandatory GX-ETS is the clearest path to compliance in Asia. Canada has launched procurement. CORSIA has limited durable CDR eligibility. In the United States, DAC Hubs funding has been restored despite federal volatility, and states such as California continue exploring CDR rules and procurement.
These are meaningful developments. However, they should be understood in context.
Policy is not likely to replace the Microsoft-scale tailwind over the next few years. The largest near-term watchpoint is the EU ETS review in July 2026. SBTi’s Corporate Net-Zero Standard V2 is expected to be released in the Summer of 2026, a timeframe similar to that of the International Organization for Standardization’s draft technical standards and specifications. CORSIA’s 2027 to 2029 eligibility cycle, Japan’s GX-ETS implementation, procurement models, and the operationalization of Article 6.4 also matter.
There are many encouraging signs, and policy is becoming real. That said, it is not yet broad enough or moving quickly enough to provide the same near-term demand force that Microsoft provided through large voluntary purchases.
Can financing help suppliers bridge the timing gap before policy becomes a significant factor driving demand?
Financing Rewards Execution
Supplier financing needs are urgent. More than 70% of suppliers seeking company funding or project financing indicated a three- to six-month timeframe. Between 67% and 73% indicated that grants and subsidies were a priority source of funding.
At the same time, equity financing stepped back in 2025. On a relative basis, BiCRS held its own, while mCDR and DACCS faced more financing headwinds. Financings are still happening, but with a higher bar.
The market is trending toward incrementalism over big bets.
This can be healthy if it directs capital toward credible teams, real delivery, disciplined execution, and measurable progress. But it also creates pressure for suppliers that built plans around faster demand growth, easier financing, or more forgiving market conditions.
That means suppliers will need to operate through a difficult transition period. The message is clear: shift focus from being promising to being financeable.
That means credible delivery plans, real customer traction, cost discipline, transparent reporting, clear risk management, and enough runway to survive until broader demand becomes more material.
From Ambition to Execution
Taken together, Microsoft’s reported pause, the ex-Microsoft growth in contracted and delivered volumes, the relative success of BiCRS methods, evolving pricing expectations, policy progress, and tighter equity financing, point to a durable CDR market that is demonstrating resilience and maturing.
The market is also becoming more selective, and the next phase will reward companies and market actors that can:
- deliver reliably,
- build trust,
- control costs,
- reduce buyer and investor risk,
- provide transparent data,
- and keep going until broader demand arrives.
This is the shift from ambition to execution that we see being the hallmark of this next phase of the market’s growth.
The Parable of the Stonecutter
Durable CDR is an infrastructure market. Infrastructure markets are not built all at once.
Progress can feel slow. Policy can take longer than expected. Financing can tighten. Buyers can hesitate. Suppliers can feel caught between promise and proof.
But each verified tonne matters. Each delivery matters. Each buyer matters. Each standard, relationship, policy step, and transparent data point matters.
The stone does not break because of the final strike alone. It breaks because of every strike before it.
Keep chipping away.
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FAQ
How important has Microsoft been to durable CDR?
Microsoft has been the largest disclosed buyer of durable CDR and has played a major role in amplifying contracted demand. Its reported pause is a meaningful market stress test because no other buyer group can immediately replace that scale.
Is the durable CDR market still growing?
Yes. Excluding Microsoft and Frontier, durable CDR purchases grew at a 151% CAGR from 2021 to 2025, and deliveries grew at a 131% CAGR over the same period. More broadly, disclosed durable CDR purchases, deliveries, and retirements have continued to grow, though the market remains early and increasingly selective. The next phase will depend less on a small number of very large buyers and more on broader demand, credible delivery, financing discipline, and policy progress.
What role will policy play in spurring demand?
Policy is moving from recognition toward implementation, but it is unlikely to replace Microsoft-scale voluntary purchasing between 2026 and 2028. To create broad, bankable demand, policy will need to move faster and deeper through mechanisms such as compliance eligibility, public procurement, contracts for difference, Article 6 pathways, and clearer corporate claims standards.
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