By Laura Wente, SVP, Commercial at Elimini
The year 2024 is officially the hottest on record – as verified by NASA, the WMO, and the NCEI – and our planet surpassed the 1.5C tipping point warned of in the Paris Climate Agreement for the first time. While reducing emissions is core to combating this catastrophic trend, we clearly need to do more.
Carbon removal technologies offer a realistic pathway to permanently reverse legacy emissions and address carbon dioxide 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, providing 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 nascent, carbon dioxide removals (CDRs) are expected to represent more than a $1 trillion market opportunity by 2050. In order 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* gleaned from the 2024 market, including what CDR buyers are looking for in 2025.
2024 VCM Insight #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 through bigger transactions, although the market saw fewer total transactions overall.
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 for engineered removals grew by an impressive 66% year-over-year (YOY). The average deal size ballooned by 155%, and 12 of the 20 biggest deals to date took place in 2024.