This article appeared first in Carbon Capture Magazine
By Laura Wente, SVP, Commercial at Elimini
Global climate targets are fast approaching, and despite some notable corporate and governmental shifts, many companies remained steadfast in their commitment to their climate goals throughout the second quarter. Those aiming for net zero targets by 2030 are now entering the phase in which they must deal with hard-to-abate emissions, which often means incorporating carbon removals. In Q2, the most significant of the entities working to concretely address hard-to-abate emissions through carbon removal action was Microsoft – by a mile.
Microsoft made waves, signing massive, market-moving CDR deals that broke records and swept the top four biggest engineered transactions of the quarter. While these deals signal confidence in the engineered CDR market, validation for specific removal pathways, and a continued commitment to emissions reduction, they also shine a light on a growing limitation of the market: the risk associated with one company dominating deals.
Q2 2025 Insight #1: BECCS Accelerates Back to First Place – and Breaks Records
Bioenergy with carbon capture and storage (BECCS) has firmly established itself as the cornerstone of engineered carbon removals. Driven by Microsoft’s deal with AtmosClear, BECCS represented the lion’s share of market volume in Q2, now making up an astounding 74% of all-time engineered CDRs transacted.
This dominance makes sense: BECCS offers high permanence, scalable deployment, and regulatory familiarity. For enterprises looking to secure high-volume, verifiable, and financeable removal portfolios, BECCS is emerging as the default solution.
Q2 2025 Insight #2: The Biggest Engineered CDR Deals in VCM History... Twice
Last quarter, the record for the Voluntary Carbon Market’s (VCM) largest engineered CDR deal to date was broken not once, but twice – both times by Microsoft. This substantive commitment by Microsoft underscores the role that just one determined buyer can play in shaping the direction of the entire sector.
Microsoft’s headlining purchase transactions included:
- 6.75 million tonnes of BECCS from AtmosClear
- 3.69 million tonnes of BECCS from CO280
- 1.75 million tonnes of BECCS from Stockholm Exergi
- 1.25 million tonnes of biochar from Exomad Green
- 1.1 million tonnes of BECCS from Hafslund Celsio
Microsoft now accounts for nine of the top 10 largest engineered CDR deals ever recorded, solidifying its position as an apex player in the market.
These double record-breaking transactions dominated headlines in Q2, turning the eyes of the whole CDR market toward the company and its preferred CDR pathways. Carbon removal developers will increasingly be looking to appeal to Microsoft to secure high-volume deals that can anchor their projects.
Microsoft’s leadership in carbon removal has been instrumental in stimulating early market growth. With the resources to evaluate emerging technologies and the confidence to make bold investments, Microsoft is setting a powerful precedent.
At the same time, Microsoft’s outsized role underscores how important it is for more companies to follow suit. As a pioneer in this space, Microsoft is uniquely positioned to both continue to lead and help bring others along – sharing insights, identifying best practices, and inspiring confidence in the industry – which can accelerate broader market participation to support engineered CDR projects as a viable path to achieving emission reduction and net zero targets.
In particular, Microsoft clearly outlines its sustainability goals and progress via its annual Environmental Sustainability Report – and if more buyers provided this level of direction, it would help the market focus development resources accordingly. Variety in buyers would help to underpin the development of a growing industry and bring to scale diverse products to support corporate needs and preferences. And for potential customers, now is a prime time to invest in the market to ensure projects have anchor funding needed to get built – so CDRs are available when they’re needed most. This is a critical requirement for BECCS projects in particular.
The good news: as engineered removals prove their credibility and first movers blaze the trail, more purchasers can have the confidence to join in.
Q2 2025 Insight #3: Biochar Surpasses DAC
Another major shift in the removal landscape was biochar overtaking direct air capture (DAC) as the second-largest engineered removal pathway measured by contracted volume. This leap was powered largely by Microsoft’s deal with Exomad Green, but it reflects a broader pattern of confidence in biochar’s scalability, durability, and affordability. Biochar is on a progressive upswing, building on gains from Q1 2025 that were driven by investments like Google’s deals with Charm Industrial and Varaha, as well as YOY growth in 2024.
With a rising number of credible biochar suppliers and long-term offtake agreements coming online, the sector is poised to offer another formidable biogenic carbon solution alongside BECCS to help round out diversified CDR portfolios.
The second quarter of 2025 redefined what’s possible for carbon removals. It proved that, even amid economic and regulatory uncertainty, engineered removals are becoming a central pillar of corporate climate strategies and engineered CDRs are on a path to transition from breakthrough to baseline, establishing carbon removals as routine and reliable.
*Source: CDR.fyi to June 30, 2025
8/7/25