Q1 2025 Insight #1: Bigger deals, but fewer of them
The first quarter of 2025 marked the highest Q1 volume in recorded history for VCM** engineered removals, despite the number of deals shrinking. This continues a trend first spotted in 2024 and signals the market maturing into one where megadeals from climate-forward corporates are leading the charge. Nearly half of all Q1 engineered volume was contracted in January alone, stemming from just three landmark transactions:
Together, these three purchases accounted for 400,000 tons of removals, cementing Q1 as a period of concentrated but high-impact action.
While fewer deals may suggest a narrower buyer base, the size and ambition of these agreements point toward a future where fewer, larger players are willing to stake bold claims in climate mitigation efforts – especially as scrutiny around net-zero commitments intensifies.
Q1 2025 Insight #2: Market diversification picks up steam
In the first quarter, the types of permanent carbon removals represented as part of these engineered transactions diversified noticeably. Biochar has surged to become the third-largest removal method by contracted volume, aided by players like Charm Industrial expanding their offerings beyond their initial bio-oil technology.
Direct ocean removal [LW1] also gained momentum, rising to the fourth-highest contracted method by volume and further validating its viability as a scalable removal pathway, while biomass storage also recorded 33 transactions in Q1.
While this is simply a snapshot, longer-term trends toward diversification are critical. As no single removal technology will scale fast enough to meet climate goals alone, a mixed portfolio approach from buyers signals a healthy and evolving market, open to innovation and adaptation.
Q1 2025 Insight #3: More players enter the arena
The first quarter also welcomed 16 first-time buyers, outpacing the 13 new buyers who entered during the same period last year. These included a Norwegian bank, a sustainable aviation company and even TikTok joining the market for the first time.
The quarter also saw five new suppliers, compared to three in the first quarter in 2024, showing growth on both sides of the “desk”. While it’s highly unlikely this will be enough to meet anticipated demand for the foreseeable future, it could increase competition.
While the number of transactions shrunk, the increase in players shows growing confidence in the market as new corporates, project developers, and investors engage with carbon removals in earnest.
Q1 2025 Insight #4: Less pricing transparency, despite customer requests
At the same time that participation has broadened through these large transactions, pricing transparency has continued declining. Buyers only disclosed pricing information for two deals in Q1 2025, compared to 20 in Q1 2024. This lack of transparency denotes the large, project-specific transactions that have occurred, which don’t necessarily contribute to price standardization.
Frontier – whose mission is to help accelerate new carbon removal technologies by providing demand for them – remains an outlier here by publishing 100% of its transaction prices. This transparency is in line with Frontier’s mission to help create new carbon supply, rather than compete against what exists today, and as such, it is anticipated Frontier will continue providing this transparency.
While customers may desire more price transparency to help ensure they’re securing a fair deal, the aforementioned downtrend is likely to continue as bilateral transactions tied to large, bespoke projects continue to comprise an increasing share of the durable removals market.
Where’s the BECCS?
By the end of 2024, bioenergy with carbon capture and storage (BECCS) was the breakout engineered removal pathway, dominating the top five deals and achieving an 84% increase in total contracted volume relative to 2023. But in Q1 2025, BECCS got off to a slow start, with only one of the top five deals tied to the method.
Does this mean BECCS is losing momentum? Not necessarily.
The answer lies in the evolving deal structure of the VCM. As we’ve seen already in Q2, a small number of very large deals can significantly shift the rankings by removal method. This volatility means quarterly snapshots may not fully reflect long-term trajectories.
For example, in the early days of Q2, the market has already experienced a reshuffle. On April 15, Microsoft announced the largest CDR purchase in history – tied to BECCS. This landmark deal is expected to significantly alter the composition of the market for the remainder of the year.
Looking ahead
The first quarter of 2025 affirms that the voluntary carbon market for engineered removals is maturing in complexity, scale, and diversity. More players are entering the space, deals are growing in volume, and the range of viable removal technologies is expanding.
Yet, challenges remain. Price opacity threatens trust, and fluctuating deal structures complicate efforts to track progress by removal type.
Still, the momentum is real – and the need for scalable carbon removal is only increasing. For companies like Elimini and our peers across the VCM, the road ahead is about translating this momentum into durable infrastructure, trusted partnerships, and enduring climate impact.
*Source: CDR.fyi to March 31, 2025
**Note: CDR.fyi reported a quieter Q1 due to three deals that were contracted in December. To maintain consistency, we’ve credited those deals according to when they were announced – which falls in Q1 2025.
6/23/25
