Demand for carbon dioxide removal solutions is poised for a dramatic resurgence in the second half of 2025. While the industry has stumbled in recent years, market forces are now stronger than the industryâs critics.
A new crop of durable carbon dioxide removal solutions, from microalgae that sink carbon and ocean alkalinity enhancement to biomass carbon removal, is now reaching commercial scale with low-cost pathways. These pathways promise to remove carbon dioxide from the atmosphere for 100 years or more.
Meanwhile, government regulations like carbon border adjustment mechanisms, global emissions reduction standards, and national trading schemes are pushing new buyers to start making orders.
Beyond the technological innovations and political machinations, the simple fact is that carbon is an economic opportunity, and the world needs this mitigation and resilience solution to address the inconvenient truth of planetary warming.
Climate leaders canât ignore the data
Even as advocates, led by Al Gore, criticize the failings of carbon capture solutions like direct air capture and carbon capture and sequestration as a moral hazard and economic boondoggle, climate data reveals that carbon removal is a necessary piece of the puzzle.
The facts are unequivocal. Greenhouse gas emissions reached a new record in 2024, according to a November 2024 report from the World Meteorological Organization. And there is still no sign that fossil fuels have peaked, the group says.
These new records for carbon emissions are occurring despite spending on renewable energy development and deployment climbing above $2 trillion in 2024.
Ideological purity is no substitute for action to begin reversing the geoengineering experiment humanity has run for the last century, and carbon removal solutions are the best immediate path forward.
All CDR solutions must be on the table
As global warming realists give up on the idealized fossil fuel-free future they want and embrace the solutions they need, some are beginning to see the wisdom in accelerating as much carbon removal activity as possible.
Industry trackers like CDR.fyi reveal the market momentum behind solutions ranging from direct air capture systems to remove greenhouse gases directly from the atmosphere or marine carbon dioxide removal solutions that trap CO2 on the ocean floor. At Gigablue, the company I co-founded, we enhance the natural processes of the ocean to do just that â capture and store carbon dioxide on the ocean floor for hundreds to thousands of years.
In 2020, buyers contracted for just over $100,000 in what CDR.fyi calls âdurable carbon removalâ â processes that remove carbon from the atmosphere for 100 years or more. By May 2025, those advance market commitments climbed to nearly $6 billion.
In contrast, the market for traditional carbon offset sales, typically reforestation and afforestation, remains flat. Transactions in the offset markets currently sit at $1.4 billion, below the 2022 peak in offset transactions of $1.7 billion, according to private market analytics firm MSCI.
A report from the global consulting and audit firm Deloitte noted that carbon dioxide removal credit purchases grew from 4.4 million to 6.6 million tons between the first three quarters of 2023 and 2024. Credits from conversions to renewable power or energy efficiency, or new methods like direct air capture and bioenergy with carbon capture and storage, accounted for 84% of all purchases.
Technology companies have led the way in purchases of durable carbon offsets. Google spent over $100 million in 2024 on carbon credits in 2024, and Microsoft bought over 5 million offset credits last year. But the pool of buyers is likely to expand dramatically this year and next.
Policy momentum is picking up
This embrace of emerging technologies by corporate buyers reflects a new political reality around carbon removal.
Policy measures from governments and global regulatory agencies are contributing to the creation of real economic value for carbon removal pathways. With the rise of Carbon Border Adjustment Mechanisms in both the EU and potentially the U.S., there are incentives for more nations to develop carbon markets to avoid paying European Union or United Kingdom tariffs.
Even without the participation of the United States, the United Nations has agreed (in principle) to international carbon market standards, which set the stage for increasing the capacity and volume among nationally regulated carbon trading schemes.
Meanwhile, within the US policy establishment, some members of the notably climate change-averse Trump administration see the industry as a business opportunity and engine of economic growth. Before he was nominated as Secretary of the Interior, as Governor of North Dakota, Doug Burgum said that carbon removal represented âa great opportunity to leverage one of the worldâs challenges for the benefit of [North Dakota].â
Legislators on Capitol Hill see carbon tariffs as a way to promote the Presidentâs protectionist agenda with at least some degree of bipartisan support. Members of the House of Representatives and Senate have put forward bills to advance a carbon price, and the legislation could create more momentum for offsetting in 2025 and beyond.
Finally, industry initiatives like the Carbon Offsetting and Reduction Scheme for International Aviation and the passage earlier this year of the International Maritime Organizationâs net-zero regulations for global shipping, will encourage more participants to enter the offset markets.
Carbon is an economic opportunity
Rather than being a drag on economies, carbon dioxide removal represents a path for economic growth through the energy transition. This is the realization that politicians like Secretary Burgum recognize in the eventuality that peak oil becomes a reality and nations are pushed to spend on removing the greenhouse gases they spent the better part of a century producing.
A study from the Rhodium Group indicates that when annual carbon removal markets exceed 110 million tons, from 6.6 million today, it will mean the opportunity for somewhere between 95,000 and 130,000 annual new jobs created in the US.
These new jobs cut across a range of industries that could be impacted by declines in oil and gas production over time. From transportation of carbon, sequestration, monitoring, management, and verification, these jobs touch many of the sectors that are most at risk.
And the co-benefits of various carbon dioxide removal pathways create opportunities to increase the economic viability of industries impacted by the global warming caused by increasing greenhouse gas emissions, according to the Rhodium Groupâs analysis.
Projections of the ultimate size of the carbon dioxide removal market vary, but conservative estimates put the total market for carbon removal in 2040 at $40 billion.
Time to embrace CDR
Staring down the prospect of a dramatic rise in global emissions far beyond the 1.5 degree threshold that scientists had set as the upper limit of an entirely avoidable catastrophe; supporting the carbon economy represents both the only logical response to our climate crisis and a transformative economic opportunity.
The industry is poised to create jobs, drive innovation, and build resilience while addressing our most pressing environmental challenge.
With the confluence of technological readiness, policy support, and market demand, itâs simply inconceivable that 2025 would not mark the beginning of carbon removal’s transition from niche solution to mainstream economic force.
Ori Shaashua is co-founder and chief commercial officer of Gigablue.
