Global Carbon Dioxide Removal Market 2021
The global carbon dioxide removal market is experiencing significant growth and is projected to reach $2,083 million by 2031, with a CAGR of 18.2% during the forecast period of 2022-2031. This growth can be attributed to supportive government policies and increased investment and collaboration among industry players. However, there are some factors hindering market growth, such as high energy costs for certain technologies and a lack of monitoring, reporting, and verification mechanisms.
Carbon dioxide removal (CDR) encompasses various approaches to remove CO2 from the atmosphere. These approaches include direct air capture (DAC) combined with durable storage, soil carbon sequestration, biomass carbon removal and storage, improved mineralization, ocean-based CDR, and afforestation/reforestation. The increasing adoption of CDR methods is driven by favorable government policies, investments, and collaboration in the market.
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USD 2083 Mn incremental growth between 2021 and 2026
Technology Type, Carbon Credit Buyer, Region
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Different technologies are employed for carbon dioxide removal, including biochar, DAC, carbon mineralization, ocean alkalinization, and others such as BECCS and microalgae. Biochar currently holds the largest market share, but DAC is expected to grow at the fastest rate during the forecast period. This is because governments and private companies worldwide are investing in DAC as the most viable technology for achieving their net-zero targets.
The global focus on reducing carbon emissions has led to a growing demand for technologies that remove carbon dioxide from the atmosphere, particularly in regions like North America and Europe.
The demand drivers for the global carbon dioxide removal market include favorable government policies, the introduction of the Carbon Dioxide Removal (CDR) Launchpad, and investments and collaborations driving market growth.
However, the market also faces challenges, such as the high cost and energy usage associated with DAC and the lack of proper mechanisms for monitoring, reporting, and verification (MRV).
The market is segmented based on various factors, including technology type, carbon credit buyer, and region.
Segmentation by Technology Type
Direct Air Capture (DAC)
Segmentation by Carbon Credit Buyer
Segmentation by Region
North America – U.S. and Canada
Europe – Germany, Norway, Italy, and Rest-of-Europe
Asia-Pacific – Australia and Rest-of-Asia Pacific
In 2021, biochar emerged as the leading technology in the carbon dioxide removal market. However, direct air capture (DAC) is expected to experience the highest growth during the forecast period. Significant investments are being made towards deploying DAC on a large scale in major economies worldwide. There is now a global recognition that immediate action is necessary to combat climate change, which requires both a substantial reduction in emissions and the removal of atmospheric carbon dioxide (CDR). Any CDR technology that offers economic and environmental benefits could greatly accelerate adoption rates.
One such technology that combines CDR with advantages for agriculture and soil health is the production and burial of biochar. Biochar, a form of stable carbon, is produced by heating biomass in an oxygen-poor environment through a process called pyrolysis. When biochar is added to soil, it increases organic matter content and reduces carbon dioxide levels in the air, thereby sequestering carbon. This process, known as terrestrial carbon sequestration, allows biochar to remain in the soil for an extended period, potentially hundreds or thousands of years.
DAC, on the other hand, is a technology that directly removes carbon dioxide from the atmosphere instead of capturing it from industrial sources. It involves various chemical and mechanical processes to filter CO2 from the air and either store it underground or utilize it for other purposes. The aim of DAC is to mitigate the effects of climate change by reducing atmospheric CO2 levels. Although DAC is still in its early stages of development, several companies have entered the market with their own versions of the technology.
The finance sector is projected to be the largest buyer of carbon credits during the forecast period from 2022 to 2031. This growth is mainly driven by factors such as compliance, investment, carbon offsetting, and corporate social responsibility.
Currently, North America is one of the most competitive markets for implementing CDR technology. This dominance can be attributed to the increasing demand from various end-use industries in the region. Unlike other regions, North America is expected to experience rapid growth in its CDR market due to large-scale development initiatives. The growing demand for sustainable technology in countries like the U.S. and Canada is projected to fuel the CDR industry. North America led the carbon dioxide removal market in 2021 and is anticipated to maintain its dominance throughout the forecast period, supported by government initiatives and investments from industry stakeholders. The U.S. holds a leading position in the development and deployment of the carbon dioxide removal market in the region, thanks to favorable policies and the presence of key market players.
The selection of the profiled companies was based on inputs obtained from primary experts, as well as an analysis of their company coverage, product portfolio, and market penetration.
Key companies profiled in this report include Climeworks, Global Thermostat, Carbon Engineering Ltd., Arca, Cella Mineral Storage Inc., Bussme Energy AB, Carbofex Ltd., Oregon Biochar Solutions, Wakefield BioChar, Novocarbo GmbH, Carbicrete, Neustark Ag, Ebb Carbon, CarbonCure Technologies Inc., CarbonFree, Carbfix hf., Blue Planet Systems, Pacific Biochar Benefit Corporation, HEIMDAL, Charm Industrial.
Recent Industry Developments
In October 2022, Carbon Engineering Ltd. and Occidental Petroleum Corp. commenced the construction of a carbon removal plant in the Permian Basin, United States. This plant, leveraging direct air capture technology, will be capable of extracting 500,000 tons of carbon dioxide from the atmosphere annually.
Also in October 2022, Climeworks achieved the operational launch of its first-generation technology at the world’s inaugural commercial direct air capture facility in Hinwil, Switzerland. This milestone enables the company to intensify its focus and work towards removing gigatons of CO2 by 2050.
In April 2021, Thermostat entered into an agreement to supply direct air capture (DAC) equipment to the Haru Oni eFuels pilot plant located in Chile. This facility will employ carbon dioxide capture through electrolytic hydrogen production, ultimately yielding synthetic gasoline. The plant has been designed to capture approximately 250 kilograms of CO2 per hour.
In July 2021, Carbfix announced a strategic partnership with Aker Carbon Capture of Norway. This collaboration aims to harness the synergies between their respective technologies, offering a comprehensive carbon capture and storage (CCS) value chain in the global battle against climate change.
Key Questions Answered
What are the key factors and trends influencing the carbon dioxide removal (CDR) market?
Which companies are the prominent players and start-ups in the carbon dioxide removal market?
Which technologies hold a leading position in the carbon dioxide removal market?
What are the recent advancements in different countries regarding the implementation of carbon dioxide removal technology?
What are the government regulations and initiatives that have contributed to the wider adoption of carbon dioxide removal technology?