Last year was officially the hottest on record—as verified by NASA, the World Meteorological Organization, and the National Centers for Environmental Information—and our planet surpassed the 1.5-degree Celsius tipping point warned of in the Paris Climate Agreement for the first time. &nbsp;Extreme weather is becoming more frequent and has already made an imprint on 2025, with impacts ranging from the devastating wildfires in southern California and landslides in Indonesia to floods in Argentina. While reducing carbon emissions is core to combating this catastrophic trend, we need to do more. Carbon removal technologies offer a realistic pathway to permanently reverse legacy emissions and address carbon dioxide (CO2) released by sectors where reaching net zero is not yet feasible, giving us a fighting chance to reduce our global dependency on fossil fuels and other sources of carbon pollution. The voluntary carbon market (VCM) plays an essential role in this equation. It provides a marketplace where organizations can proactively purchase carbon removals to offset the CO2 generated by their operations—particularly for hard-to-abate industries. While the VCM is still relatively new, carbon dioxide removals (CDRs) are expected to grow in to more than $1 trillion market by 2050. To meet the growing needs of this market, it’s important to keep tabs on how customer preferences are evolving. Let’s take a look at three key insights (according to cdr.fyi) gleaned from 2024 market activity, as well as early indications from 2025 and what CDR buyers are looking for this year.2024 VCM Insight No. 1: Bigger and Better - But Not Broader Engineered carbon removals, like those generated from bioenergy with carbon capture and storage (BECCS) or direct air capture (DAC) technologies, are reliable, measurable, and permanent, and in 2024, the market was clearly on the same page. Engineered CDRs captured significantly more of the market and did so through larger-volume transactions. While the total number of VCM transactions dropped by 35%—mainly due to fewer transactions for DAC, enhanced weathering, and bio-oil—the total volume of engineered CDRs sold grew by an impressive 66% year-over-year. The average deal size ballooned by 155%, and 12 of the 20 biggest deals to date took place in 2024. We’re seeing this trend continue into 2025, with the number of transactions for the first two months down by nearly 40% compared to the same period in 2024, but total volume sold increased exponentially, by 289%. In the same period, deal size increased again, this time by 544%. Fewer deals with higher volumes continue to be a predominant theme.2024 VCM Insight No. 2: BECCS is Queen So, what CDR technology was responsible for driving the most market growth last year? As it turns out, BECCS was the go-to solution for large-volume carbon removal purchasers and the largest driver of market growth overall. In 2024, BECCS volume rose 84% from the previous year, with transactions up 156%. In fact, three of the five biggest customer deals last year were predicated on BECCS-based carbon removals, including: • Stockholm Exergi’s deal with Microsoft for 3.3 metric tons (mt) of CDRs • Orsted’s deal with Microsoft for 1 mt of CDRs • Orsted’s deal with Equinor for&nbsp; 0.33 mt of CDRs BECCS permanently removes carbon from the atmosphere, and at the same time, it generates 24/7 renewable power. This provides an additional revenue stream to the project while adding a renewable energy source to the grid in support of increasing load growth. In short, BECCS-derived removals produce scalable, high-quality CDRs and renewable energy. Interestingly, BECCS wasn’t the only biomass-fueled solution with increased transactions in 2024—biochar and biomass removal also saw YOY growth. This success is well-positioned to continue into 2025. For example, biofuels, which are derived from biomass, were named as one of the only preferred nonfossil fuel energy solutions in President Trump’s national energy emergency declaration, alongside hydro, geothermal and nuclear. This paves the way for additional growth, while intermittent renewables like wind and solar face new headwinds. There are indications that the policy environment will only foment this trend of biomass-based engineered carbon removal growth. While it’s too soon to say if BECCS will continue to drive similar growth in 2025, we’re already seeing the year begin with two big biochar deals: Google’s deal with Charm for 100kt of CDRs, and with Varaha for 100,000 tons of CDRs.2024 VCM Insight No. 3: What Buyers Want to See For the voluntary carbon market to continue to mature, customers need ways to increase confidence in their purchases. To accomplish this, buyers are increasingly turning to: • Proven, reliable technologies like BECCS: Purchasers want to ensure their investments are truly permanent, measurable and auditable. • More established suppliers: Investing in smaller, niche projects can increase risk and raise red flags during the corporate vetting process. By going with experienced providers, customers can have greater confidence that projects will reach completion and operate as planned. • Offerings with greater pricing transparency and standardization: Customers want to ensure they’re landing fair market rates. As they see prices settle into consistent ranges, confidence is expected to rise. The 2024 VCM and early 2025 market clearly show us that customers are increasingly turning to high-quality carbon removals—predominantly from biomass-based solutions like BECCS—and they’re willing to make larger purchases when they trust the technology and supplier. Knowledgeable developers working to responsibly develop and construct projects and provide clear insight into the quality of the product they are producing, including how those products contribute to the net zero journey, can earn customer confidence. In turn, this can help expedite the reversal of the legacy emissions warming our planet, giving us a fighting chance against climate change.Author:&nbsp; Laura Wente, senior vice president, Commercial&nbsp; Elimini&nbsp;

2025-04-28 - Critical Trends, Measurable Results (Carbon Capture Magazine)

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Three Key Insights from the 
2024 Voluntary Carbon Market

Critical Trends, Measurable Results

Critical Trends, Measurable Results

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