We’re excited to introduce the first-ever CDR.fyi Year in Review. In this report, we look back at the growth of the carbon dioxide removal market and examine some some of the key trends in 2022.
This report is broken down into a few sections…
- 2022 Carbon Removal Market Overview
- Market Trends
- Carbon Removal Methods
- Purchasing Dynamics
- Price Indices & Benchmarks
- Analysis & Conclusions
- Appendix: Scope of Analysis & Data
2022 Carbon Removal Market Overview
- Total CDR purchased in 2022: 592,969 tonnes
- Total CDR delivered in 2022: 36,776 tonnes
- CDR Purchases grew by 337% in 2020-’21 and 533% in 2021-’22.
- 67% of total ’22 purchase volume driven by single pre-purchase (Airbus x 1PointFive)
- Total market size: $226,418,403 CDR purchases
- Despite significant market growth & momentum, high-permanence CDR is still in its infancy. Total cumulative purchases as of 2022 is less than 0.0006% of the total amount of removals needed this century by 2050 (based just off hard-to-abate emissions)
Note: CDR.fyi tracks 100+ year permanence carbon removal purchases & deliveries. Data are drawn from public and private disclosures. See Appendix for full discussion of data considerations & limitations.
Market Trends
Purchases
In 2022, carbon removal purchases continue to grow at a rapid clip. This is in large part due to large “pre-purchase” agreements, in which buyers and suppliers commit to long-term contracts for carbon removal in future years.
Purchases (including pre-purchases) grew from 21,376 to 93,600 to 592,969 tonnes in 2020, 2021, 2022. This represents a growth rate of 533% this year (‘21-’22).
This growth is driven largely by one mega-deal, the Airbus-1PointFive purchase of 400,000 tonnes. If excluded, ‘21–22 growth rate is 106%.
Deliveries
Deliveries grew from 6,883 to 16,028 to 36,776 tonnes in 2020, 2021, 2022. This represents a consistent delivery growth rate of 130%. Deliveries are dominated by two methods, biochar & bio-oil, which we explore below.
Carbon Removal Methods
In 2022, we saw the Global CDR portfolio expand across new methods.
Biochar (40%), Concrete Mineralization (27%) and Direct Air Capture (20%) represent the most tonnes purchased in ‘22.
Deliveries remain heavily concentrated in just three methods: biochar (87%), bio-oil (9%), and enhanced weathering (3.8%).
We are seeing delivery timelines many years into the future, especially for more novel methods. This is best visualized as the Time to Order Fulfillment, which shows the average number of months between when a CDR purchase is made, and when it is forecasted to be delivered. For methods that have not yet delivered, these are estimates for when they will begin delivering.
Biochar orders are being fulfilled within ~5 months of orders, while the remainder are >30 months.
Purchasing Dynamics
Purchasers
CDR.fyi tracks 755 all-time CDR orders, with 379 (~50%) of all orders in 2022.
There are currently 115 known companies that have bought high-permanence CDR. 86 companies bought in 2022, 48 in 2021 and 9 in 2020.
Only 23 purchasers have bought more than 1000 tonnes in total. In 2022 16 companies announced that they bought more than 1000 tonnes, up from 11 in 2021, the majority of which were repeat purchasers from the year prior
You can see the Top 10 Carbon Removal Purchases below:
Travel, Banking and Technology sectors continue to lead the charge on carbon removal.
Marketplaces
Marketplaces help facilitate transactions across buyers and suppliers. They often bundle additional services — like carbon accounting, tax & reporting tools — to help buyers develop their strategy in carbon removal. These marketplaces play a vital role in bringing in new buyers and mitigating risk of high-permanence CDR.
There are currently 41 marketplaces, which puts the high-permanence buyer-to-marketplace at ~3x and the supplier-to-marketplace ratio at ~2x.
You can see the Top 10 Carbon Removal Marketplaces below:
Suppliers
CDR.fyi currently tracking 75 unique suppliers. Only 10 of the 75 suppliers have delivered more than 1,000 tonnes of removals, 8 of which are biochar.
You can see the Top 10 Carbon Removal Suppliers below:
Douglas County Forest Products — a sawmill in Oregon, USA — has delivered the most tonnes, creating biochar on leftover biomass. Charm Industrial, a supplier of bio-oil from corn stover, is the #1 supplier for 1000+ year permanent removals with their bio-oil derived from corn stover.
Note: Carbon removal transactions can be complex and include many stakeholders. For every transaction, CDR.fyi tracks a standard set of stakeholders: purchaser, demand-side marketplace, supply-side marketplace, and supplier. Top Lists provide different “views” into the same underlying tonnage and are not necessarily unique. For example, the same ton attributed to Shopify in the Purchaser Top List will be attributed to Charm Industrial (Supplier)
Hype Index
The CDR.fyi Hype Index (shout-out to Peter O for this concept) showcases the distribution of a suppliers sales relative to deliveries.
A high ratio of purchases-to-deliveries (top-left of the Hype Index) indicates significant investment in early technology. A low ratio of purchases-to-deliveries (bottom right of the Hype Index) indicates that a supplier or method is delivering relative to its purchases.
Most suppliers are clustered towards the bottom, with low sales and deliveries. Those that have broken out are predominantly in biochar (Freres Biochar, Carbofex, Oregon Biochar Solutions, Douglas County Forest Products) and bio-oil (Charm Industrial).
Price Indices & Benchmarks
Note on Pricing Data: Most public announcements do not include pricing data. CDR.fyi has developed a pricing model to predict prices for undisclosed prices. Carbon removal agreements can have a wide range of custom terms, from pre-purchases (money paid upfront) to offtake agreements (buyer commits to pay upon delivery). On top of this complexity, early buyers of carbon removal are in many cases focused on “kickstarting the market”.
Overall Price Index & Price per Method
The CDR.fyi Price Index — a weighted average of price per tonne sold — ends the year at $403 per tonne.
However, there continues to be large price variance, both across and within methods.
Some methods, like DAC, have wide spreads between min-max prices, while some remain much narrower. This is largely driven by a diverse set of approaches, technological maturity, and willingness to sell down the cost curve.
This is visualized in the Price Range by Removal Method, which shows the minimum, average, and maximum price paid per tonne:
The large spreads indicate that early buyers are considering more than just price in their buying decisions. Co-benefits, method scalability, permanence, and delivery timelines can all play a factor in which methods and suppliers early buyers choose to work with.
Emergence of a carbon removal cost curve?
When you look at pricing over time, we do not see a clear emergence of cost curves yet.
The Pricing Over Time chart is quite noisy, which indicates that CDR prices are very much in flux and deal dependent:
This indicates that CDR technology is too nascent and methods too diverse for the emergence of a true cost curve. Over time, we expect to see downward trends and tightening in price bands as CDR technology matures and verification standards are adopted.
Analysis & Conclusions
The CDR market is extremely small, so we’re not surprised to see large growth numbers this year. The market did grow in 2022, both in terms of pre-sold and delivered tonnes, but growth appears to be stable and not accelerating.
We still do not have a real CDR market, but rather a number of actors attempting to kickstart carbon removal and help create a market. We can see that the market dynamics are still upside down. There are more marketplaces than suppliers, and even fewer buyers. There are currently:
- 41 marketplaces or resellers of high-permanence carbon removal
- Only 10 suppliers that have removed over 1,000 tonnes.
- 16 purchasers buying more than 1,000 tonnes in 2022
The low number of buyers is concerning. The rapid increases of new buyers between 2020 and 2021 did not continue in 2022. It’s likely that the number of buyers is understated, as many smaller buyers are purchasing through aggregators like Stripe Climate and Shopify Planet. We’ve also seen advance market commitments like Frontier help spark demand in this nascent industry.
However, getting more dollars committed to buy carbon removal is a prerequisite for future growth, and the emergence of large corporate buyers with long-term commitments to high-permanence CDR has the opportunity to greatly accelerate the market.
Why are so few companies buying carbon removal? One reason is likely a lack of incentives. For example the Science based target initiative (SBTi) does require permanent carbon removal to fulfill net zero targets, but does not incentivize deployment of removals before target dates.
Buying carbon removal today also comes with its challenges, requiring in-house expertise and direct contact with suppliers. This has been been made easier by marketplaces and buyers clubs, but buyers might not feel comfortable with outsourcing quality control until standards are more developed and universally agreed upon.
The lack of standards and immaturity of MRV (Monitoring, Reporting & Verification) in general remains an obstacle. Purchasing carbon removal from companies using new methods or suppliers often means taking a leap of faith that not everyone is willing to do. Verified deliveries and agreed-upon, third-party standards will likely attract new buyers who want to purchase a “safer” and more establish removal.
Finally, permanent carbon removal remains expensive. The high price point is likely a deterrent for a market who has and that companies are expecting prices to drop. But this is a “catch-22”: lower prices are dependent on descending the learning curve for new technologies, which require initial buyers to signal to suppliers (and investors) that there will be future demand for high-quality carbon removal.
We hope to see more buyers, and continued growth, in the year ahead.
We love hearing from the community, reach out on Twitter or Post to let us know what you think of the 2022 Year in Review. If you’re interested in becoming a Verified Data Partner or API access for the data, get in touch.
Authors: Robert Höglund & Kevin Niparko
Contributors: Chris Nixon (engineering), John Bogil (engineering), Filipo Varini (engineering & data science)
Thanks to: Carla Woydt, Claire Kiely, Peter Olivier, Peter Reinhardt, Calvin French-Owen, Ryan Orbuch, Joanna Klitzke, Lauren Reeder, Siddarth Vijayakumar, Keeton Ross for ideas and feedback along the way.
What is CDR.fyi
CDR.fyi is the largest open registry for high-quality carbon dioxide removal. We’re building digital infrastructure for carbon-dioxide removal companies to make reporting simple, and transparency the default.
CDR.fyi was born out of our own curiosity to answer a seemingly simple question: how big is the carbon removal market today, and how are progressing relative to the IPCC Models?
While many carbon removal standards & registries exist, each maintains a small sliver of the overall story, each with their own reporting standards & protocols. CDR.fyi aggregates data across registries, marketplaces, and suppliers, providing a unique view into the CDR market.
APPENDIX: Scope of Analysis & Data Considerations
CDR.fyi is the largest open registry of high-permanence (100+ years) carbon removal.
As an independent aggregator and cross-registry reporting platform, our data are one of the most unique and comprehensive views into the state of the carbon removal market.
Data is sourced from public data sources, community submissions and private order flow shared with CDR.fyi via our Verified Partners program. For a full inventory of our data sources and Verified Partners, you can see our Methodology.
Data Considerations & Limits
The dataset used to generate this report has limitations. This dataset is directional, and conclusions drawn from this dataset should take into consideration the following considerations:
- The dataset is based off claimed purchases and deliveries. The state of CDR Monitoring, Reporting, and Verification is very nascent, and many deliveries have not been verified by independent auditors.
- Currently the CDR market is dominated by pre-purchases and offtake agreements which require parties to actively disclose to become publicly known. Delivered tons on the other hand are mostly verified and reported on registries, making volumes and suppliers (but not price) publicly known by default. (There are exceptions such as Climeworks which does not yet disclose their delivered tons publicly. Most non-biochar/oil CDR have not started to deliver yet)
- The dataset represents both public or private orderflow shared by CDR.fyi. There are unannounced purchases and deliveries from suppliers that are not represented. The size of this is unknown and difficult to estimate. Public announcements can also occur months after a purchase or delivery is made, which means we have lower data coverage for more recent months. However, we believe CDR.fyi covers the vast majority of the carbon removal market, confirmed by a number of off-the-record interviews with market participants.
- In some cases, sales volume is known but price is unknown. In those cases, a weighted average of that method’s price is used. If we have reason to believe a particular sale differs from average prices we provide a bespoke estimate instead.
- In other sales, prices are known but not volume, then the average’s price per method is used to determine volume.
- The dataset exclusively captures 100+ year permanence CDR. Sub-100 year permanent CDR methods and suppliers are not represented.
- The dataset is current as of December 23rd, 2022. There may be purchases made in the final few weeks of December that are not represented in this report.
