Time is short so I’ll get to the point quickly: When two rapidly expanding adjacent sectors get big enough, odds are that the scope of their activities are going to overlap. In the field of climate projects, biochar (a rapidly expanding category) and superpollutants (another rapidly expanding category) are going to have points of intersection. This post is going to talk about how, at the project level, biochar can simultaneously sequester carbon and reduce methane and nitrous oxide emissions.

I’m going to outline areas where I have observed this intersection, and what can be done to advance this. In a (carbon negative) nutshell:

• Scientific evidence suggests that biochar can reduce super pollutant emissions, particularly methane (CH4) and nitrous oxide (N2O) in specific industrial applications.

• Biochar use-cases can lead to emissions reductions of super pollutants in addition to representing a store of CO2 for durable carbon removal.

• Credit stacking through methodologies are starting to take shape - or if not, they should - about this trend.

• In cases where offsets are not an option, achieving operational compliance with existing (or future) regulations is an opportunity for corporations to take action.

I’m writing this with project developers, carbon credit intermediaries, landfill operators or farmers, registries, and regulators in mind: there is opportunity here for advancing impactful climate solutions along several dimensions.

With that, on to some examples!

First, biochar in landfills.

We know that landfill methane emissions are a problem - many regulations are on the books for landfill operators to comply with (more on that later), while landfill gas capture projects have been around for a long time, using an active system of vertical wells and/or horizontal trenches drilled into the waste.

Enter biochar. The premise is that placing biochar into landfills not only enables the carbon dioxide represented in the char to be stored durably, but also that the biochar reduces methane emissions When incorporated into landfill cover soil, biochar can promote methanotrophic bacteria, which oxidize methane before it escapes into the atmosphere, as noted in a 2020 study.

Credit where it’s due: some of this has been covered by Jigar Shah already when discussing biochar startup Carba, whose physical biochar product from its first facility in Minnesota is destined for landfills. Other co-benefits follow such as reducing PFAS leaching at landfills and preventing odors from organic waste decomposing.

Research has been ongoing for over a decade on biochar reducing landfill methane. And not just in Minnesota but in Miami-Dade County as well, with other research funded by the National Science Foundation providing further support.

For regulatory compliance, Municipal Solid Waste (MSW) landfills are required by the EPA to monitor carbon dioxide and methane - and were not adequately doing so in a September 2024 report. That said, with the lapse of EPA’s endangerment finding, regulating methane will likely fall to states.

In jurisdictions where GHGs from landfills are not regulated, the door to carbon dioxide sequestration and methane avoidance crediting is open, provided that adequate monitoring technologies are present onsite, which is where a biochar use case can yield credits for the Voluntary Carbon Market (VCM).

Outside the United States, other jurisdictions require landfill monitoring of GHGs as well, and have strong regulations. In these cases, landfill operators can add biochar to improve their ability to be in compliance with regulations for carbon dioxide and methane.

Also, high praise for Google and AMP on their new partnership to pre-sort organic waste that would have otherwise gone into a landfill, then using that as biochar feedstock. Truly an ingenious pairing - and utilizing that biochar in a landfill itself or for other superpollutant mitigation would be even more amazing!

Second, biochar as manure compost additive

Agriculture - including livestock - represents a major component of methane emissions. And manure based methane totals 9% of all US methane emissions - for comparison the entire oil and natural gas sector has about 28%.

Here’s how the narrative might work:

1. Farmers create compost from their own livestock to till into their fields.

2. Adding biochar to this compost reduces methane emissions.

3. Registries are starting to take notice1, with CAR in particular offering an opening for future superpollutant mitigation through biochar application.

Once methodologies for combining biochar with manure compost are developed, a new revenue stream would open up for biochar projects. One caveat is that evidence suggests that the source of the compost matters: the non-GHG story story is less clear for yard waste or green waste based compost, compared to livestock manure compost.

Dairy farmers especially in California are already regulated in the amount of methane that they can emit; again biochar would offer a path to compliance. California dairy farmers in particular are subject to AB 1383 which mandates methane emissions reduction by 2030. In this way, biochar would enhance their ability to achieve regulatory compliance.

In this case the biochar producer can rely on the familiar narrative of biochar’s agricultural benefits of water retention, crop yields, and nitrification reduction, as shown in recent work by the University of California at Merced. Furthermore, adding biochar to manure compost can reduce compost nitrous oxide emissions - noting that nitrous oxide has a residency time of approximately 300 years in the atmosphere and has a Global Warming Potential (GWP) 273 times that of CO2 on a 100 year timescale.

Third, biochar with anaerobic digestion

Here’s where the biochar and superpollutant story adds a twist: instead of combining the biochar into manure to place directly on fields, add it to an anaerobic digester (AD) that produces natural gas for sale.

Why? Science has shown (here, here, and here for starters), that adding biochar to anaerobic digesters (ADs) not only increases natural gas output, but also increases the quality of the resulting biogas by reducing its sulfur content. The digestate product from the AD is higher quality with biochar than without, and can be used on fields as above.

Furthermore the AD operator can sell more higher quality energy than they could otherwise. In certain jurisdictions (CA, WA, OR, BC), a Low Carbon Fuel Standard (LCFS) credit improves the revenue from biogas production. In the geopolitical situation at the time of this writing in March 2026, rising prices for natural gas also could make more of these operations economically viable, particularly in Europe and Asia.

In the case of AD whose biogas feeds electricity generation, producing more energy locally reduces transmission and distribution cost burden on rural energy systems. Using locally produced biochar also would reduce transportation emissions for the biochar producer, improving their lifecycle assessments for carbon removal crediting purposes. And the additional biogas revenue, especially when combined with Low Carbon Fuel Standard (LCFS) incentives, can improve the economics of anaerobic digestion.

Farmers get: digestate with biochar to place on their fields.

Anaerobic digester operators get: more natural gas to sell

Biochar producers get: A customer for their physical product.

Finally, beyond ADs for animal manure, wastewater sludge treatment in an AD using biochar as a filtration mechanism yields similar biogas quantity and quality improvements. Knowing that biochar is already being considered a filtration medium for wastewater, this would combine nicely if biochar companies were to partner with wastewater management facilities to improve the methane footprint.

Crediting Challenges

As with other crediting pathways, these projects need to clear both regulatory additionality and financial additionality thresholds in order to create carbon credits. This might mean that crediting would not be possible in jurisdictions that already have statutes in place for livestock manure or landfill methane. However the benefits due to CO2 sequestration credits would still be valid, making the project itself economically viable with a ready-made use case for selling the physical biochar product.

For financial additionality, a project would have to consult its registry to better understand the IRR threshold necessary for creating more credits for the project. In that vein, more projects that are not economically viable today could benefit if investors see the increased potential for return due to a stacked methane or nitrous oxide credit.

Operational Challenges

Anaerobic digesters in particular face a complex permitting pathway, with project developers navigating a patchwork of national, subnational, and local regulations. Local opposition may also arise due to environmental concerns such as odors from the AD facility, or its effect on water supply. Zoning challenges may also hold AD projects in check due to proximity to schools, homes, or other sensitive locations.

For landfill biochar, operating dynamics are a hurdle. Similar to anaerobic digesters, there is a high degree of variability to the regulations affecting landfills. Biochar producers may have to prove out the ability of their particular biochar from a single feedstock to win approval from the landfill management company or local government.

How To Move Forward

What is a biochar operator to do?

Well for one thing, start engaging with registries who can adequately credit the carbon removal credit from placing biochar into landfills, ensure that it can combine with compost and still get a credit, and create a protocol that ensures that the CO2 is still sequestered in the digestate from an anaerobic digester. The science is out there! Regardless of the super pollutant emissions profile of the landfill, compost, or anaerobic digester project, a biochar producer will need verification that the char is still sequestered.

Second, find landfill or manure composters who have good monitoring systems for the methane and nitrous oxide. If technically feasible and economically viable, work to create methane reduction or nitrous oxide reduction credits to support these operations.

Third, look to anaerobic digesters in your area, especially if you operate where an LCFS is in effect. Even if the biochar volume is low as a pilot, expansion potential in the future for biochar sales would be an important signal.

Conclusions

Over the next 2 to 3 years, carbon market stakeholders, project developers, and service providers should develop the additional benefits of biochar via superpollutant mitigation. Economic and operational reasons need to undergird integrating these projects into an existing industrial ecosystem. Adding regulatory compliance, improved economics or additional carbon crediting incentives to the mix can speed deployment of combined technologies and processes that are well understood in their own right. Combining superpollutant mitigation with biochar addresses both short term goals to slow down climate change while advancing the long term goal of removing excess atmospheric carbon dioxide - with significant co-benefits. Merging these paths can make a powerful economic driver and climate solution.

Jason Grillo is the Principal of Earthlight Enterprises marketing and carbon finance consultancy where he works with biochar operators as his primary clients. He is the Founder of SPECTRA - a Super Pollutant Elimination Alliance, and is a voluntary contributor to CDR.fyi. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer, client, or associated organization. This post also appears on the blog site of the Institute for Responsible Carbon Removal, American University.

“The impediment to action advances action. What stands in the way becomes the way” -Marcus Aurelius

Well it’s been quite a 12-month news cycle these last few weeks! I don’t want to discuss national or international politics much here, but suffice to say that when Canadian Prime Minister Mark Carney in Davos remarks that the international system is in a state of “rupture”, people take note.

In that backdrop of turmoil, I’d like to discuss what the perhaps bumpy future of carbon removal might look like in the longer time horizon. I’m basing this off the behavior of other industries, past climate peaks and troughs, and my own experiences in the field since I started working in CDR in late 2019.

The Trough

I’ll repeat my assertion in my previous post that per the Gartner ‘hype cycle’ chart, CDR generally is past the ‘peak’, and is just about to begin sliding into the Trough of Disillusionment.

Uncertainty in markets and policy will likely make the next few years a challenging time for carbon removal project developers, who could struggle to achieve funding and product sales. The “less than 5 percent of the potential audience has adopted fully” above, supports the market situation today: the universe of potential buyers has not panned out as expected, with Microsoft still dominant as the world’s biggest CDR buyer - hence this meme here created by the “Carbon Removal Memes” folks.

While the model above suggests venture may offer second or third rounds of funding to some lucky companies, best money may come from other sources of financing: project financing, debt financing, or product revenue. Venture funding in hardware is a tough slog, and may be the same for carbon removal project developers. There is a danger that when venture money is put into hardware projects that ultimately fail, venture may leave the sector altogether - hence the lapse of climate venture funding between Solyndra’s collapse in 2011 and 2019/2020. This would mimic behavior in Cleantech 1.0, where venture funded A123, A Better Place, and (infamously) Solyndra all collapsed.^,

In the ‘Trough’ startups may close, early stage funders may not follow on, personnel may leave the CDR industry or depart climate altogether and pursue other interests in different industries.

Open questions: How long will this period last? How deep will it go? And what types of activities will spur a rally?

The Seeds of Recovery

Other industries offer a parallel course to what CDR could see in the 5 to 10 year time horizon. The first internet wave crashed in 2000-2001; Google was founded in 1998 but didn’t IPO until 2003; Facebook was founded in 2003, Apple had its own wild trajectory with, then without, then with, Steve Jobs at the helm. Cleantech 1.0 had its bubble burst around 2011, only to have solar and wind and battery startup survivors grow and develop and outpace expectations. And then we witnessed a wave of a few years of early stage investment starting in the early 2020s, renamed as “Climate Tech.”

I predict a similar model will happen in CDR with crisis, rework, and steady robust recovery as a pathway to the future. Several factors are to play into this:

First, CDR 1.0 survivors will carry the industry. Some companies founded before say 2025 will ride out the storm, either by securing the capital they need, achieving commercial success in a challenging market environment, or pivoting to a new business model altogether. Climeworks is pivoting with Climeworks Solutions, offering portfolios of both engineered and nature-based approaches that remove CO₂ from the atmosphere. And Heirloom is partnering with United Airlines to produce Sustainable Aviation Fuel. Biochar deployment in a funding landscape absent venture money can yield physical product for sale with economic value, in addition to delivering CDR credits. That method alone could represent the growth driver for durable CDR credit markets in the next coming years while other CDR methods begin their first commercial deployments.

Here again, Cleantech 1.0 provides a useful analog when wind and solar commercial deployments advanced during the 2011-2019 period between Cleantech 1.0 and Climate Tech 2.0 (roughly). Government support was part of that with German Feed-in tariffs, but the main product - energy - as well as voluntary market Renewable Energy Credits (RECs) provided funding to keep these industries growing. Large, if not industry leading, success stories are also able to weather this type of market adjustment: IBM moved to services rather than primarily manufacturing computers. Yahoo is still alive and kicking. As are Cleantech 1.0 companies First Solar and this Tesla outfit you may have heard a bit about.

Second, standard consolidation. As of 2026, many, many organizations offer standards for “What Is Quality CDR.” In a new industry, it is natural that that will happen since nobody really has a sense of what “Quality” truly means. The problem is that none are truly comprehensive, and this set of fragmented standards hurts advancement of the field, since outsiders looking in are forced to choose between a multitude of unfamiliar rubrics for comparing projects. This XKCD comic that made the rounds in AirMiners a few years ago best captures this phenomenon. My personal take is that there’s probably room for only a handful of standards relative to the multitude we see today, and that achieving clarity on these will make for a better directed recovery of CDR.

The nature of the standards will depend on what voluntary carbon removal credit buyers want to see. Regardless of whether early catalytic buyers, project developers, and their venture backers believe 1,000 years durability is true “quality,” the mainstream buyers will bear out the case in the market. If say 200 years+ is what becomes the de facto standard, so be it.

That said, the EU’s CRCF voluntary standard for biochar, BECCS, and DAC could be a starting point for this consolidation.

Third, market infrastructure. For one thing, many marketplaces exist for carbon removal credits, each with their own vetting system for who gets in. Buyers have a multitude of channels to choose from, but there are no consolidated exchanges yet.

Contract agreements for purchases are also bespoke; making them more turnkey is the crux of the effort at OSCAR - standardizing contract language to ease friction in carbon removal transactions.

Fourth, price discovery is a key hurdle as well. We are starting to see glimpses of it with broad price bands reported likely due to low numbers of reportable prices in transactions, but nobody can say “ERW is trading at this price”, or (per above) what the 200-year vs 1000 durability price differential may be in a geography of interest. Such clarity may come with greater transaction volume (read: liquidity), but buyers need better price visibility to buy!

A secondary market of trading credits will advance price visibility as well. Right now there is not much of a market trading issued but not retired credits. Deliveries are, by and large, assumed to be retirements rather than tradable.

Fifth, financial innovation can yield a viable path to recovery as well. Consider the potential for CDR to be considered as an asset that can be collateralized, rather than an expense. The work of the Carbon Liabilities and Assets Initiative is particularly interesting in that regard. It removes offsets of any variety from the P&L (which may affect executive compensation and stock price) and instead characterizes credits as an asset to be countered against a liability.

The Rebound: VCM 2.0 and Compliance Markets

Crucially, policy measures to support CDR - at times taking years of painstaking work - will enable the development of both voluntary and compliance markets.

Sylvera estimates that sometime in the next several years, compliance market volume of CO2e will surpass that of voluntary carbon markets. As CDR becomes better integrated into compliance markets, financing for projects may step in to support on the grounds of a more solid customer base. I agree with Robert Hoglund’s assertion first that “Carbon removal needs a new story”, and concur with his point that “[f]or compliance, the only real driver for durable carbon removal in the medium term is inclusion into the UK and EU ETS.” We also need to note his caveat that the high price of durable CDR would be too much to be viable in those markets absent Contract for Difference (CfD) government support.

A common theory of change is that anticipating compliance markets will spur voluntary climate action. That way the buyers will grow beyond the courageous few maverick companies who have deep margins to spare. As compliance markets grow and incorporate carbon removal into their schemes, a new round of startups may spring up, spurring technological innovations that rival the monumental work that so many many startup founders to date have put into novel methods to remove carbon dioxide from the atmosphere.

Carbon removal can also achieve re-emergence through insetting and industrial value chain integration. The entrepreneur of CDR 1.0 may become the intrapreneur of CDR 2.0, working inside a company so that the industrial processes that remove carbon become part of the organization’s value chain. While entrepreneurial in its nature, ‘intrapreneurship’ offers its own challenges, risks, and advantages over a stand-alone startup - more to come on this. As a built-in part of an existing company, CDR can offer some way to solve a general business problem, raise revenue, reduce costs, or acquire customers for a larger business. So carbon removal projects can become a ‘race to the top’ that yield economic benefits rather than being perceived as an add-on cost of doing business.

The key risk in the CDR 2.0 world would be policy uncertainty - hence starting this piece off with the term “Rupture.” In a world where international cooperation is weakening, arriving at global standards - or at least a handful of accepted standards - will prove a challenge. The U.N., World Bank, WTO, climate COP and other international bodies could see their power and influence deteriorate, which would diminish the potential for international carbon markets as well. Carbon nationalism may rise as well, where governments assert greater control of the carbon emissions mitigation and sequestration activities within their borders.

Conclusions

Just as the tides wash in and out, the tide of fortune and misfortune cycles through. Such is the way with so many aspects of life; the fledgling durable carbon removal industry will seem no different from others in that regard. While there are significant obstacles in the path of durable carbon removal today, the failures of the market point to pathways for renewal after a time of turbulence. Pragmatism in the near term will lead to flourishing in the longer term.

Finally, my view is that Prime Minister Carney may very well be right about the state of rupture - he got a rare standing ovation from the Davos audience. As a carbon removal community, we would be blind not to listen to the broader context of global uncertainty that coincides with an uncertain time for our industry, and seek opportunities for recovery. I believe a better world will ultimately emerge, whose achievements, both in climate and beyond, dwarf those of the old. It’s a future worth fighting for.

Jason Grillo is the Principal of Earthlight Enterprises marketing and carbon finance consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer, client, or associated organization. This post also appears on the blog site of the Institute for Responsible Carbon Removal, American University.

In the end of year opining about the state of CDR, there doesn’t seem to be much consensus about the trajectory of the industry: Is carbon removal coming? Going? Staying put? Tough to say. Some headlines suggest that 2025 was a bad year for CDR, while others see a brighter year from the 12 months that just concluded.

In this post I’ll break down some of the positives, some of the negatives, and offer some suggestions about what this reveals about CDR - and offer some utter speculation about 2026 and beyond as well.

So, what the heck just happened?

A Transitional Year for CDR

From this writer’s perspective, the CDR industry is undergoing the natural maturation that follows the initial ‘hype cycle’ as it dissipates. Per Nat Bullard’s January 2025 “State of Decarbonization” slide deck, there are over 500 carbon removal startups in existence. Quiet part out loud: Not all of them are going to make it.

One reason for that is that climate investing - including CDR - pulled back during 2025. However, this trend was already in place for at least a year or two prior. The “Cambrian Explosion” of CDR companies for several years starting in, say, 2019 could not last: sooner or later, good ideas and standards will emerge, and less appealing solutions will suffer in the market (or at least get mothballed). Per Erik Amundson here, that might not be the worst thing: the most adaptable organizations will find a way to survive and progress.

Per the Gartner ‘hype cycle’ chart, my sense is that CDR generally is past the ‘peak’, and is just about to begin the ‘sliding into the trough’

Much of the distress surrounding the state of carbon removal focuses on the fact that startups are beginning to go out of business, having not delivered carbon removal tonnage. By 2025, some investors from the 2020 to 2022 period started to expect a return, while Series A or Series B funding became significantly tougher. Not that financing events did not happen - they did - they were only tougher to come by, especially in the $1M to $5M range as noted in this Planet2050 + CDR.fyi market report.

In short, the CDR field in 2025 started to experience a ‘winnowing’; I’m going to suggest in the next section that companies that progress or are culled out might be organized by method of CDR.

Differentiation

How macro trends affect the broad industry are increasingly differentiated by the major methods that have emerged over the 5-year period from 2020-2025. I’m not saying that new, innovative solutions won’t ever step up, but as of this writing, the field seems to be sorting out among a few distinct CDR method classes.

Rather than external factors affecting all companies and all methods equally, 2025 saw increased differentiation in the fortunes of CDR project developers organized by the type of solution on offer. Policy shifts, notably in the United States, financial demands, and customer expectations did not affect all companies equally throughout 2025. I’ll recount some of the effects on sub-sectors of CDR below.

For Direct Air Capture companies, 2025 was ‘tough sledding’. The retraction of IRA funding for the DAC Hubs in the United States is causing many of the leading companies to scramble for alternate sources of financing. Or to move to other countries, such as Canada.

Biochar saw robust growth with the sector starting to achieve traction for the physical biochar produced. Registries such as Isometric and Climate Action Reserve have picked up on this trend, offering new methodologies for biochar as demand for registry services grows.

In Enhanced Weathering, the excellent news was that an ERW company - Mati Carbon - won the grand prize for the XPRIZE carbon removal competition, plus the first ever verified ERW carbon removal credits were issued. That said, the necessity of improving MRV in a complex, open system and pressures on the economics of ERW are challenges to consider for the future.

In Marine CDR, Gigablue grabbed headlines in January with its 4-year, 200,000 ton CDR deal, though the field in general still requires a good amount of scientific research and upfront development money before making good on its vast potential, similar to how the biopharmaceuticals industry operates. The key concern is the extent to which the 2024 shutdown of Running Tide more broadly affected the marine CDR investment landscape.

Market Development

Surprise: Microsoft remains the predominant purchaser ofCDR credits! Per Allied Offsets Voluntary Carbon Market 2025 Review below, the number of active buyers did increase - slightly - in 2025 relative to 2024. That said, why aren’t other companies stepping up?

The good news is that there was increasing interest in CDR - and climate generally - outside of the United States, especially in Asia. For example Japan has begun to be the site of more CDR activity, with Japanese corporate investors increasingly attending overseas events. My sense is that purchases of carbon removal credits by Japanese companies will advance apace as the country rolls out its GX League, as government activities can drive voluntary action. Singapore has also become a major CDR hub, as both the national government and financial sector in the country are keenly pursuing carbon removal solutions.

Second, 2025 laid bare the need for infrastructure and market tools to advance the industry. The heightened public profile of CDR at the COP conference also strengthens the case for buyers and other industry supporters. OSCAR, an initiative to launch a standard carbon removal contract applicable across all methodologies globally is an example of a catalyst that can cut through transactional friction. (disclosure: I’m a Co-Founder). As companies offering supply to the market mature, the business infrastructure supporting commercial and financial transactions will have to develop in parallel. Look to 2026 for more of such efforts.

Third, end-use applications for carbon removal projects are becoming more important. Notably, Verde Resources (a biochar-to-asphalt utilization company) announced in late December that it is registering for an underwritten public offering on NASDAQ. My stance is that CDR companies who can develop revenue-generating or cost-saving outcomes for their customers are likely to win out in the long run, providing value beyond selling a carbon credit itself.

Insetting is a key pathway to investigate; the economic value chain beyond carbon removal credits may spur spur adoption of CDR solutions. In that light, the practice of intrapreneurship to create value within businesses can be decisive, rather than presenting carbon removal credits as a pure expense that hits a P&L statement (and potentially affects executive compensation).

Conclusions

2025 proved to be a mixed bag for carbon removal as an industry. The accelerated dropoff in funding poses a hurdle to scale-up. The most successful project developers gained commercial traction for physical products and carbon removal credits in this difficult financing and policy environment.My take is that the general economic and policy environment will affect companies differently, dependent on what sector they are, and the prospects for revenue generation in other value chains . Some will see ceilings of success along faster or slower timelines; some will accelerate, while others plateau. The industry still has a long way to go - it’s still in its ‘tween’ or early teenage years - but has definitely established itself as a key solution in the climate landscape.

Jason Grillo is the Principal of Earthlight Enterprises marketing and carbon finance consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer, client, or associated organization. This post also appears on the blog site of the Institute for Responsible Carbon Removal, American University.

“In innovations that are based on process need, everybody in the organization always knows that the need exists. Yet usually nobody does anything about it. However when the innovation appears, it is immediately accepted as ‘obvious’ and soon becomes ‘standard’”

-Peter Drucker, Innovation and Entrepreneurship

Sometimes the solutions that we seek are just under our very noses, in seemingly innocuous places that only come into focus when you step back for a second. A case in point is exactly that for two industries: carbon removal and wooden pallets.

In this post I’ll take up the case of why the wooden pallet industry may be such a ‘beachhead’ mainstream industry for biochar, adding an innovative solution to address a key process need for wood waste management.

Innovation In Action

On October 21 and 22, process innovation was on display for all to see at the National Wood Pallet and Container Association (NWPCA) fall plant tours in Houston, Texas. Truly it was a privilege to attend, with the highlight as a tour of industrial transformation through biochar at a pilot pyrolysis facility on the site of pallet remanufacturer, 48forty Solutions.

Meet ‘Audrey’, the RAINMAKER™ pyrolyzer who came into the world just outside of Austin, Texas, as anr induction based pyrolysis machine from the environmental technology company, LOCOAL. She’s always looking for someone to feed her 8-10mm wood chip feedstock, and her favorite musical is Little Shop of Horrors.

To fill in the picture further, Audrey is just getting her final checks done onsite. She can consume 2 tons of feedstock per hour and produce biochar, electricity from natural gas, and bio-oil, as well as wood vinegar.

So this innovation is real, and happening now on the ground level. But let’s zoom out a minute to talk about why and how this moment is right for wooden pallet pyrolysis to create biochar.

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Why Pallets? Why now?

For background, the pallet industry literally supports shipment of goods that we all depend on for daily living. Most goods that travel for mass delivery happen on the top of a wooden pallet - in the United States 1.8 billion pallet units are in circulation, 92% of which are wood, and 500 million are manufactured each year. The estimated value of the wooden pallet industry is $20 billion in 2025. With over 2500 firms are listed by the US Census as “Wooden Container and Pallet Manufacturers”; small and mid-sized businesses are prevalent. While there are several large firms, the data suggest that the industry is not highly concentrated relative to other industries.

Sustainability is on the forefront of wooden pallet companies’ minds: though 95% of wooden pallets are recyclable, the industry generates 500,000 tons of landfill wood waste in the form of unusable, unrecyclable pallets. Though a 2020 study concluded that wooden pallets have a (marginally) better carbon footprint relative to plastic pallets, the wooden pallet industry sees a need to innovate in sustainability. To that end the NWPCA achieved UL certification for a wooden pallet Environmental Product Declaration (EPD) in July 2020.

In that light, how to dispose of unusable wooden pallets is a key need. Some companies sell ground up wood waste wood as mulch or use in fiberboard and boiler fuel. The economics of the market for these end uses may not be favorable depending on the recycling site dynamics - with over 2500 companies in various geographies, there is significant variability to how viable those end-use markets are to any individual company. Sending large quantities of wood waste outright to a landfill requires paying a tipping fee as well, making that a less attractive option from a financial and climate perspective.

With these trends in mind, additional revenue streams or opportunities to derive value from supply chain waste can confer a competitive advantage to pallet companies.

Enter biochar.

Why biochar? Why now?

Biochar is having a moment as a high growth field, and seeks to accelerate biochar carbon removal through industrial integration, with many sessions dedicated to that prospect at the US Biochar Initiative 2025 North American Biochar Conference.

The biochar production industry is growing rapidly worldwide, with deliveries of biochar carbon credits doubling each year from 2022 to 2024, to become by far the most commonly delivering carbon removal method according to CDR.FYI.

Biochar pyrolysis equipment manufacturers are benefiting from credit delivery growth, and are expanding their offerings to service more industrial biochar producing clients. With this future in mind, the market value of industrial scale equipment manufacturers is forecasted to grow at an over 11% combined annual growth rate from 2024 to 2028.

Integrating into existing industries by finding innovative use cases has been a key question for the biochar industry for many years (see this 2021 AirMiners event on exactly that topic). The difference now is that instead of biochar entrepreneurs looking at innovative use-cases for its end products, the industry could advance by creating innovative pathways to embed the practice of biochar production into existing verticals for developing projects.

Achieving an adequate return on investment for intrapreneurs and their companies is the key step.

The Business Case

In short, biochar has the opportunity to turn a waste from a cost to a more substantial revenue generator.

Pyrolysis that creates biochar from wood waste can rely on multiple revenue streams:

• Energy generation revenue from the pyrolysis process, especially with Federal 48E tax credits for bioenergy in the US under certain conditions

• Sales of physical biochar for customers to use or build into their own products.

• Tipping fees if the pyrolysis site is permitted to receive municipal solid waste (MSW) or construction and demolition wood waste (C&D)

• Carbon revenue, from either:

  • Offsetting where the carbon credit - and environmental benefit value - is sold to an entity separate from the physical char purchaser.

  • Insetting where the carbon benefit and the char are bundled together and sold to a single company to address their supply chain Scope 3 emissions

As an added bonus, pallet producers as established businesses could have access to debt financing for project development that eludes many smaller biochar startups.

In that light, biochar players can see a ready-made partner with wooden pallet companies for growth. Across the wooden pallet industry, pallet producers can ‘hire’ biochar for the job-to-be-done: sustainable wood waste management.

What is the next milestone?

Significant opportunity exists here at the intersection of these two industries, and innovation in business models is a key driver.

On the one hand, larger pallet recyclers could purchase pyrolysis units themselves, and deploy at different sites where doing so is economically viable and technically feasible. Alternatively, groups of smaller local pallet companies may form joint ventures or special purpose vehicles (SPVs) which could pool financial resources and establish a mutual pyrolysis site to collect feedstock across several sites. And potentially coordinate with regional biochar networks to share best practices.

The most critical aspect of innovating within the industry at this point is for a core group of leaders dedicated to advancing the practice of pyrolysis is key. This is a journey of intrapreneurship for innovating to meet a key business need. These ‘Early Adopters’ can provide examples and teaching for the industry, so that others can learn of the successes, challenges, and opportunities experienced at the early stages.

Fortunately we know many of those folks already:

A Final Word (for now)

The pallet story is only now starting to be written, and I will likely take this up in future writings. That way other industries interested in pursuing carbon financing can use the learnings here as an example of how to integrate carbon removal into their everyday business practices. For by doing so, I believe that the practice of removing excess carbon dioxide from the sky by any method can reach new heights.

More to come - onwards!

Many thanks to the NWPCA for hosting an excellent event, to Jess Bonsall at 48forty Solutions, Miles Murray and Matt “Petey” Peterson at LOCOAL for the site tour, and Kat Vasquez from Oxnard Pallet Company for making many, many introductions to the wooden pallet community.

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Jason Grillo is the Principal of Earthlight Enterprises marketing and carbon finance consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer, client, or associated organization. This post also appears on the blog of the Institute for Responsible Carbon Removal.

Sometimes a little variety of different flavors is what is needed to spring a dish to life. Today I’m going to apply that idea to recent trends in the voluntary carbon markets. While climate policy - particularly in the United States - may be throwing cold water on previously frothy sustainability plans, the voluntary carbon market continued to grow in the first half of 2025. As retirement of credits increases, and demand for higher quality continues apace, new and more varied offset classes are starting to make their way into markets. Metaphorically, the ingredients of this expanding pie are becoming more and more varied, as more and more mouths want to taste a slice.

Below, I’ll expand upon some of these trends and what their implications may be for buyers, sellers, and other stakeholders in carbon markets as of mid-2025.

The VCM has expanded in the first 6 months of 2025

As measured by the volume of retired credits, the voluntary carbon market is growing faster than it has in recent years. This may come as a surprise when one reads about flagging corporate commitments, but the carbon credit data tell a different story. The start of 2025 saw reasons to expect carbon market growth, as reported by Ecosystem Marketplace from their State of the Voluntary Carbon Market survey conducted in 2024:

“For the second year in a row, Respondents reported transacting fewer credits than were retired from the top ten carbon credit standards, suggesting declining inventories of the most sought-after credits in the face of sustained demand and bottlenecks in supply of new credits.”

And that trend has continued so far in 2025: retirements of any kind of carbon credits are having a record year, per Sylvera:

Not only are credit retirement volumes increasing, but the quality of issued and retired credits is also improving - gradually - as well. See the following from Calyx Global and Clear Blue Markets 2025 Mid-Year Carbon Indices report, tracking their Quality Index for issued and retired credits on the y-axis, throughout the last 5 years:

Notably, per Allied Offsets, since 2024, the number of unique buyers participating in the VCM increased on average 28% in each of the first 6 months of 2025.

While organizations publicly issue press releases stating their retracting climate programs and alliance memberships, the increased retirements of credits suggests otherwise. Some sustainability investments are achieving their best results in years. Action is happening, but many companies, particularly in the U.S.A. are greenhushing their climate plans.

The growth in carbon removal underscores the overall growth of the VCM.,Per CDR.FYI’s Q2 2025 Market Update Report, is having a truly remarkable year, with purchases so far in 2025 almost doubling the *total* purchase volume for 2024. That said, there is the caveat that 14.5M of the 15.5M tons purchased that quarter are by one buyer - Microsoft.

In which the scope of the credits are changing

Amidst this picture, demand signals spurring new varieties of carbon credits is starting to stand out. Forestry and land use, and Renewable Energy Credits (RECs) remain extremely important, but are are lower proportion of issuance. That said, the increasing proportion of credits based on industrial and waste gases in particular is of interest - Sylvera’s report notes the high proportion of industrial gas issuances.

Credits for reducing or destroying super pollutants represent an additional ‘pillar’ of carbon markets, as new registries and methodologies are arising for project developers to. The data from closing out the first half of 2025 demonstrate that these types of projects are readily moving forward, with increasing numbers of purchasers selecting them as retirements. Notably,, Google and Wren are entering into the business of purchasing carbon offsets from methane and super pollutant destruction projects.

Amidst this, quality standards for waste gas and super pollutants will need to improve on historical precedent - under the CDM guidelines, the prospect of selling CDM super pollutant destruction credits led some projects producing more super pollutants to destroy.

Registries are getting more nimble as well: smaller, newer standards such as International Carbon Registry and Open Carbon Protocol are fielding new methodologies for these classes of waste gases.

Carbon removal registries, too, are expanding their repertoire. CAR and Isometric each now have biochar methodologies in place, which complement Puro.earth’s offering on the market. Isometric also officially has new Ocean Alkalinity Enhancement credits - the first of their kind - available, and also held a public consultation on River Alkalinity Enhancement.

And now for something completely different, a new type of ‘energy transition credit’ based on early fossil energy retirement also is starting up, with a new NGO, Kinetic Coalition, launched in May to support projects early retirement of fossil fuel plans globally. The roster of a dozen large corporate entities goes beyond large tech companies. It includes manufacturing, food and beverage, financial and professional services, representing verticals which have energy footprints to offset - i.e. not only neutralizing a growing emissions footprint from AI datacenters.

Finally, if project developers elect to stack different types of credits together in one project, additionality concerns will become more and more important. For example, including biodiversity or nature-based solutions together with emissions reductions would require standards bodies to carefully evaluate those types of projects which have different credit classes. Climate Action Reserve already has a provision for this in version 1.0 of their 2024 US and Canada Biochar protocol, which states that

“Project stacking (where project activities are reported under multiple protocols as separate projects with distinct climate benefits) may impact project eligibility if the additionality of any individual project being stacked is affected, or if it results in conflicting claims of credit ownership or double-counting of credits.”

Implications

These new classes of credits could mean that standards bodies that track methodologies and corporate targets are going to be very busy grappling with innovative methods. As will ratings agencies who will evaluate the projects’ credit worthiness. The general demand for offsets is pushing the limits of what quality might mean - to stay nothing of fungibility of one type of project for another. Innovations in registries and protocols implies that innovation in MRV and sensing will have to continue apace for these new types of projects.

Organizations wishing to use offsets for either neutralizing their footprint - or pursuing a Beyond Value Chain Mitigation contribution model - may struggle to understand how to incorporate these new varieties into their climate plans. Or may purchase new types of credits and not report on them.

What appears to be happening is that - in ‘greenhushed’ tones - corporates are turning to an ever-diversifying palette of credits when constructing their spectrum of carbon credits to complete their portfolios. Standards bodies and other stakeholders will need to be mindful of the more varied appetites for sustainability offices hungry for new types of offsets.

Thank you to Alexander Rink and Robert Hoglund at CDR.FYI for their initial review of this article.

Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer or associated organization. This post also appears on the blog of the Institute for Responsible Carbon Removal.

Greetings again after I took the summer off from writing! Here’s something lost in the discourse surrounding the One Big Beautiful Bill and its dire consequences for climate movement in the United States: the much-coveted 45Q tax credits remain intact. In fact for CCS purposes the value per ton of those credits increased to be at parity with DAC credits. Despite the many setbacks the climate movement saw in the OBBB passage, carbon dioxide removal seems to have escaped the worst of outcomes. Begs the question: why?

I’m not going to rehash the politics of how and why the OBBB itself came to pass. Rather, in this piece I’m going to explore some upstream reasons why I believe that carbon dioxide removal was spared the worst, with culture as a primary driver. To be clear: I believe the bill’s repercussions for many climate solutions - especially the wind, solar, and electric vehicle industries - will hamper economic growth and climate progress. Think of this writing more as an opinion essay rather than a data-driven argument, drawing on experience as an entrepreneur, policy advocate, and community organizer.

There’s an adage that politics is downstream of culture. So it would follow that carbon removal culture is part of the reason that CDR has to date enjoyed downstream political support in the USA, . The nature of the industry and the policy advocacy efforts by many, many dedicated individuals to this point in time has provided something that regulators, civil servants, elected officials - and their constituents - can get behind, on both Left and Right, in conservative or liberal contexts.

Here are some of my observations on the advantages that CDR achieves in its general industry culture:

1. Carbon removal represents a new type of climate solution, famously thrust into the spotlight in 2018 with the IPCC statement that removing excess atmospheric CO₂ is going to be necessary to achieve the world’s climate targets. Being new has spared CDR from excess baggage of decades of fighting over environmental policy. This offers a contrast to renewable energy, or EVs which are making headway significantly now, but only after decades of opposition and foot-dragging.1

   Furthermore, the novelty of CDR is not in stopping emissions, but targeting what is existing in the atmosphere already - which makes for a different framing of climate solution. In short, there’s no incumbent industry that is going to resist the threat of being displaced!

2. Because CDR features many different technological approaches, the industry as a whole can offer a diverse set of co-benefits to a wide variety of stakeholders beyond the all-important ton of atmospheric carbon dioxide removed. In other words, while industry insider participants may contend adamantly about advantages and drawbacks of particular CDR methods, there’s enough benefits to serve the additional needs of many interested parties. CDR is not biochar alone, Direct Air Capture alone, or BECCS alone - it is a set of widely varying solutions centered around one central problem.

3. Third, branding. Excess atmospheric carbon dioxide is legally characterized as pollution as of the 2007 Massachusetts vs EPA Supreme Court decision. And pollution = bad. As such, the carbon removal industry strives to clean up this big carbon spill in the sky2 - and do so in a way that does not threaten incumbent industries. And in doing so consider the non-climate aspects of a CDR solution - a climate solution which does not talk about climate per se, similar to how the first rule of ‘Fight Club’ is to “not talk about Fight Club”.

   A corollary: Transforming a pollutant into a product that can provide value to a customer turns the climate conversation on its head. It tickles the imagination to think that a bad can become a good. I’m particularly fond of the Reversing Climate Change podcast not just because of the content, but because of the mindset that leads us to think that reversing the worst of climate change is possible - it suggests agency rather than passivity.

These factors make conversations about carbon removal easy to enter into. The ‘ask’ in carbon removal is not so much asking people to change their lifestyles - that can lead to resistance. Rather to seek support for forward thinking solutions that truly tickle the imagination. To wit, anecdotally I’ll say that I’ve had many conversations with family, friends, and friends of friends about carbon removal, and I frequently hear

“You can do that? Really??”

“Yes, really. We can turn a waste pollutant into a product or service of value.”

And when I tell people that if we stop emitting CO₂ first and foremost, while scaling up carbon removal, then we can draw down the 425ppm of atmospheric carbon dioxide3 to preindustrial levels over the course of decades, I get the same response:

“This is possible? Really?”

Yes. It. Is. Possible.

This framing imbues the industry with a message of hope. Which has enabled CDR (to date) to sidestep the culture wars that have led many climate solutions to fall victim to pitched on-again / off-again battles in the United States, depending on the whims of 2 or 4 year election cycles. A positive culture emerged from a blank slate, offering potential economic benefits while moving forward on a narrative of hope.4

I firmly believe we need an “all of the above” strategy for climate solutions - no one solution set alone is enough. Threading the needle of culture can lead to policy success downstream; some sectors of climate solutions have succeeded at that better than others. Carbon dioxide’s ability to avoid the worst of climate culture wars to date has to be considered a success in the early stages of the industry.

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Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer or associated organization. This post also appears on the blog of the Institute for Responsible Carbon Removal.

As momentum builds around durable carbon removal, one assumption keeps resurfacing: that compliance markets will eventually unlock the scale and stability the voluntary markets have failed to deliver. What we are missing is a bridge that establishes price certainty today while preparing CDR developers to compete in tomorrow’s compliance landscape.

One of the most effective financing tools may already be in our policy toolkit: Contracts for Difference (CfD). Borrowed from the renewable energy industry, CfDs could offer carbon removal the market infrastructure it needs to scale by guaranteeing a specific price, thus catalyzing investment and enabling long-term planning.

To start, let’s define what a CfD is

CfDs are one of the clearest examples of smart public-private risk-sharing, and are used widely already in a different industry: energy. Contracts for difference have become a key market mechanism for scaling low carbon power (specially solar and wind) since its inception in 2014 in the United Kingdom. At its core a CfD guarantees a fixed price (Strike Price) for electricity over a long-term (15 years in the UK). If the Wholesale market price (Reference Price) falls below this Strike Price the government pays the project operator the difference. If the Reference Price exceeds the Strike Price then the generator must pay back the excess to the government (Claw Back Mechanism).

Here’s a quick illustration, from a report by the Bipartisan Policy Center:

In the energy sector, this structure offers electricity generators a secure, predictable revenue stream while ensuring the “public” or rate payers recoup gains when prices are high. In doing so, the CfD evolved from a simple subsidy into a risk sharing financial hedge.

Why did the renewable energy industry adopt CfDs?

In the energy industry, risk defines value. Who carries it, who mitigates it, and who gets paid to take it.

The industry realized that one of the most effective instruments seen for rebalancing risk between public and private actors (without distorting the markets) is the CfD.

At its core, a CfD is a long-term financial contract that stabilizes revenue for power generators by hedging against market price volatility. But beyond the pricing mechanism lies its strategic importance: CfDs allocate risk to the party best positioned to manage it. Governments absorb short-term market volatility while developers retain responsibility for construction, performance, and resource variability.

It’s a clean split. And it works.

For governments, this isn’t just a subsidy: it's a market signal, a risk management tool, and - in some cases - a revenue-generating hedge. Current CfD structures are designed to require the project operator to pay back any revenue it earns above the agreed strike price, allowing governments to claw back the upside and when prices collapse, they guarantee the floor that makes projects bankable. The result is a scalable, fiscally responsible way to accelerate investment in critical infrastructure that can be applied to offshore wind, solar, or carbon removal.

How CfDs enabled renewables to scale

Before CfDs, intermittent renewable energy (offshore wind and solar) struggled under volatile wholesale markets. These projects were capital intensive and had unpredictable revenue. Enter CfDs, by absorbing price risk governments created the financial certainty that developers needed to build large scale infrastructure and commit to large scale projects.

Between 2015 and 2022, UK offshore wind saw a steep cost curve decline

Developers responded by delivering massive capacity at ever-lower prices. For instance, the world’s largest offshore wind farm, Dogger Bank, secured its CfD in 2019 and achieved financial close soon after, clearing the path for a £9 billion project that began generating power in 2023.

By providing revenue stability, CfDs unlocked unprecedented levels of private investment, accelerating deployment and reducing clean energy costs in tandem.

The power of the two-way CfD lies in how it allocates risk between public agencies and private developers:

• Price risk: the wild swings in wholesale electricity prices is transferred to the public sector, which funds or collects payments. This insulation grants generators the confidence to plan and build.

• Volume and delivery risk related to actual performance, weather, and construction timelines remains fully with the developers, incentivizing them to manage and operate efficiently.
  
  

• Upside returns when markets boom are recaptured by consumers or taxpayers, thanks to the clawback mechanism. Meanwhile, developers receive a stable, long‑term income regardless of market volatility .
  

Why this could work in Carbon Dioxide Removal

Much like renewable energy in its early days, durable carbon dioxide removal (CDR) today is trapped by three interlocking market failures: high upfront costs, no long-term price certainty, and limited bankability.

Removing carbon dioxide from the atmosphere is a critical component of any credible pathway to net zero; however, despite growing recognition of its importance, the market for durable CDR has not grown as much as needed to achieve climate goals. The problem doesn’t seem to be its technological potential, but rather, it’s a gap in the economic structure.

Developers face significant capital expenditures long before they can deliver a single tonne of removed CO₂. Outside commitment to substantial infrastructure investment is in many cases necessary upfront, with payback periods that are uncertain and years away. This happened already in the early challenges of offshore wind and utility-scale solar, which struggled to attract financing without predictable revenue streams.

At the same time, today’s CDR buyers (mostly voluntary corporate purchasers) offer no consistent long-term price signal. Carbon credit prices are fragmented and obscure, negotiations are bespoke, and there is a need for long-term offtake agreements beyond a few years to support deep project financing. In this environment, even the most promising technologies remain non-bankable. Without a clear price floor or guaranteed demand, developers can’t raise debt, and equity investors face too much risk to deploy capital at scale.

Renewable energy broke through this impasse with the introduction of long-term contracts, in the form of CfDs. These contracts restructured risk: governments absorbed market price volatility, while developers retained delivery risk. By guaranteeing a fixed price for electricity for 15-20 years , CfDs enabled governments to shift market risks away from developers and unlock billions in private capital. This single innovation transformed renewables from speculative ventures into investable infrastructure. Today, CDR needs the same financial infrastructure.

CfDs for CDR can provide developers with the revenue stability needed to raise financing and commit to long-term investment. And anchoring demand though public procurement governments can send the same kind of credible signals that were so catalytic for renewable energy markets around the world.

The goal is simple: crowd in capital for durable CDR methods (DAC, BECCS, etc) by de-risking future cash flow and aggregating long-term demand. Furthermore, the promise of CfD contracts on the horizon would signify that carbon removal companies have staying power for the long-term and thus encourage voluntary market buyers to purchase in the near term.

Project stakeholders would see benefits the de-risking of durable CDR projects:

• Project developers want to be able to forecast price certainty going forward so that they can build out their revenue models and self-finance their expansion. For biochar developers, they would need this to purchase new pyrolysis equipment and expand their operations. For ERW, growing their feedstock and grinding operations would be needed. While DAC and BECCS players could use CfDs to achieve project financing to build new facilities.

• For governments, this achieves several purposes: a growing industry safeguarded by price through which they can expand their tax base. And also enables them to hit a current (or future) carbon removal target on the pathway to achieving net zero emissions in their jurisdiction. To say nothing of the environmental or economic co-benefits from CDR projects.

• Investors especially would like to see this. To date, equity financing for carbon removal has been the majority of funding announced. As the industry matures, more stable carbon credit pricing and predictable revenue would be necessary to unlock debt and project financing.

How a CfD Auction could potentially work in CDR

In the UK, Contracts for Difference are awarded through competitive auctions :

Auction Administrator: the National Grid Electricity System Operator (ESO) is responsible for running the competitive auctions for Contracts for Difference (CfD). This includes pre-qualification, bid assessment, and notifying winners.

Contract Party: The Low Carbon Contracts Company (LCCC), a government-owned company, acts as the contractual party to the awarded contracts. It manages contract execution and makes (or receives) payments after projects become operational.

Policy Framework: The Department for Energy Security and Net Zero (DESNZ) sets the overall policy and parameters for the auctions, including budget for each allocation round.

The auction:

• Renewable energy developers submit bids specifying the lowest price at which they are willing to supply electricity over the contract term.

• The government awards CfD to developers who offer the most competitive (lowest) strike prices.

• Payments Mechanism: once operational, projects:

  • Receive top-up payments when the wholesale market price of electricity (typically the UK day-ahead market price) is lower than the strike price; or

  • Pay back the difference if the market price is higher than the strike price.

  • This mechanism allows excess profits to be returned to the public.

Integration with Emissions trading systems

Not many emissions trading systems offer pricing that would support durable CDR projects at the time of this writing. As mentioned in the Philip Lee primer on CDR integration with emissions trading systems, the critical point is to index at a strike price below the Emissions Trading System (ETS) price per ton.

This mechanism provides incentive for project developers to lower costs, else reimburse the government for their price per ton. Governments would be incentivized to help with lowering the cost of financing for projects to achieve that lower price per ton as well - else the private financial backers may not enter into an agreement with the project developer to begin with and hence not provide any additional revenue to the government. The question becomes: at what credit price per ton would a financier find high enough in a strike price to ensure a sufficient Internal Rate of Return (IRR) for their own purposes.

What can CDR companies do today to advance the use of contracts for difference?

1. Work with a relevant governing body to create a CfD reverse auction, using industry best standards for quality (e.g. private registries, EU CRCF, ICVCM CCP, etc)

2. Get clear on what an acceptable carbon removal credit strike price would ensure profitability of operations, considering the CfD could be a long-term contract backed by a government to unlock project development financing.

3. Start mapping CfD cost benchmarks by CDR method on to provide to potential auctioneer to execute an auction by different CDR method type.

4. Begin mapping for infrastructure - renewable energy, transportation, storage siting - that would support long-term government contracting for large volumes of CDR tonnage.

Setting up these structures by 2030 would be crucial to unlock the promise of compliance markets to achieve carbon removal at high volume.

What do you think? Feel free to comment here:

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Isaac de Leon is a lawyer with over 15 years of experience negotiating energy and infrastructure deals across Latin America and Europe. After a career in oil & gas, he now helps shape the future of carbon removal, advising on legal structures, offtake agreements, and policies that unlock climate finance for the Global South.

Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. This post appeared on the Institute for Responsible Carbon Removal blog.

The opinions expressed in this writing are each author’s own and do not reflect the position of any employer or associated organization.

Hey folks, glad you made it here!

I’m going to say a quiet part out loud: if a customer doesn’t buy from you, it’s probably because they don’t trust you to deliver value for them for the price, relative to other options.

As it is still a young industry, carbon removal struggles with finding new customers; in a new market, and new offering, to a new customer who has never purchased the class of product before, trust is crucial. “New” can generate attention, but “trust” makes business happen, and carbon removal project developers - and the intermediaries they work with - have to overcome many, many barriers to earn that trust.

This operates on three levels:

1. Enticing customers to trust the class of product or service

2. Reaching mutual understanding of terms that the customer trusts under a contract

3. Demonstrating operational credibility to deliver based on that agreement

I want to walk through some symptoms of a lack of trust, and offer thoughts about how the market for durable carbon removal can advance through reducing risks and making trust happen.

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Symptoms

The chart presented here at the 2025 Carbon Unbound East Coast from Alexander Rink at CDR.FYI1 shows the problem: a slowing rate of new customers entering the market to purchase credits, with more than 70% of the purchase volume from Microsoft alone.

Durable CDR is running out of early adopters and has not yet broken through to a different group of more mainstream customers - who have a lower risk tolerance and are less likely to trust novel methods to achieve their business goals.

Bluntly, this represents a failure to achieve trust among new customers who have never purchased durable carbon removal credits.

Digging deeper, the story is a bit more nuanced. Operational credibility (#3 above) is there: Microsoft purchases that are breaking through with large multimillion ton deals by large scale project developers, who have resources to execute well using carbon removal technologies that are well understood such as BECCS and biochar. Considering the agreements strictly within durable CDR, this is low risk / high trust.

For both Microsoft and non-Microsoft customers, volumes per purchase are increasing - showing that yes they trust that the carbon removal works well if they have purchased already.

Beyond Microsoft and the Frontier group of companies, customers who have never purchased carbon removal are not seeing value for the price required by suppliers, even when factoring in co-benefit narratives. “No sale” is more trustworthy than a purchase. Not that new customers necessarily believe that any particular project might fail - I don’t believe that trust is absent, there’s just not enough of it for a new customer to address their own business risks. For `sustainability managers with limited internal political capital, their trust is best placed in projects outside of carbon removal, or even outside of offsets generally, or with inaction.

Even in setting a Net Zero target, the unknowns for any future technology are a challenge, as suggested in this chart from SBTi:

Though this data is from March of 2024, in 2025 placing trust for new technologies is even more difficult in a macroeconomic environment that today is rife with uncertainties.

For existing CDR customers: Continue to improve trust in CDR

Right now the remedy for a lack of trust are a host of diligence exercises at the project by project level. Registries, marketplaces, insurance, ratings agencies, and external consultants hired by purchasers all will look at a project before final signatures go on paper. To say nothing of legal teams who would review new types of contracts covering a new class of credit.

I’m *not* arguing that we should throw these diligence activities out the window at all: they are necessary to build trust for those who already want to pursue a carbon removal purchase. But as the current best practice for trustbuilding, their existence represents table stakes for transactions to occur for those who are interested in going forward, however aren’t inspiring more new customers to place their trust in durable CDR.

This establishes a good baseline of trust at the level of convincing those who are interested to begin with to trust that a project is credible.

Prospective customers: Increase trust to purchase

My recommendation: look to higher systemic activities that fit into existing frameworks for new customers. We know from a survey of sustainability professionals by Verdantix that firms do not pay much of a financial penalty for missing net-zero targets, and that the chief risk is reputational.

So lean in to ways that enable a customer to build reputational credibility in durable carbon removal as a class of product.

• First, gain acceptance of CDR methodologies among standards bodies who evaluate registries. Based on data from the Patch marketplace, the most influential is the Core Carbon Principles approval, from the Integrity Council for the Voluntary Carbon Market, which has started to apply the CCP label to millions of issued credits.

• Second: Encourage formal forums or informal peer-to-peer experience sharing among potential customers. Sustainability professionals speak with each other, yet networks of people who have made purchases of carbon removal represent an untapped resource. This would take place in the context of a broader offset conversation where durable carbon removals are a specific class of offset. Decision makers may or may not trust CDR suppliers, or if they do, it’s after many rounds of diligence.

  Fence sitters are more likely to become interested in durable CDR if a colleague can vouch for the practice in the first place. Formal or informal connections among sustainability offices can create social proof among trusted peer sets for best practices - building trust in durable carbon removal.

  The need is especially acute for sharing how to work with corporate procurement teams, financial leadership, and legal departments surrounding contracting. Bespoke contracts lead to bespoke contracts; systematizing standard forms of contracting for durable carbon removal leads to trust.

• Third: Find a way to deliver business value beyond the carbon removal. This opens up another avenue to build trust: yes the sustainability claim, but showing a return on investment more clearly. This came through clearly in the CDR.FYI / Sylvera market survey to of potential purchasers:

Conclusion, and Prognosis

I believe that the problems behind carbon removal markets are solvable, by employing new methods of winning trust among new customers. Today, gaining trust takes a great deal of effort on behalf of carbon removal suppliers, such that fewer new purchaser organizations are coming to CDR relative to previous years. Third party standards, peer networks among fence-sitting purchasers, standard contracting, and greater publication of successes are ways to improve credibility of CDR and make markets expand.

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Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. This post appeared on the Institute for Responsible Carbon Removal blog. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer or associated organization.

Hello once more, and thank you for reading!

Good things often come in fours - the ancient Greeks believed in four elements of earth, air, fire, and water; The Three Musketeers had Athos, Porthos, Aramis, and D’Artagnan; and the Beatles were a (Fab) Four.

The same can be true for carbon markets. To date voluntary and compliance sectors have stood on three major pillars of credit classes: avoidance (including RECs and REDD+), nature based solutions, and durable carbon dioxide removal.

Today I’m going to provide an overview on what I believe to be the fourth ‘pillar’ of carbon markets: methane and super pollutant elimination credits. Controlling emissions of these non-CO₂ gases are crucially important for shaving off near-term temperature increases as they have an outsized impact on global warming relative to CO₂. While I’m going to synthesize from a wide variety of sources, most of my focus will be on methane as the super pollutant most responsible for warming to date.

This is not to say that we don’t need crediting for CO₂ - rather that a portfolio approach that includes the all important “e” in CO₂e for ‘equivalent’, which can change the shape of carbon markets and provide an important tool for supporting climate action.

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Here’s three questions I’m going to address briefly:

1. Why are Super Pollutants so important?

2. How are solutions for them created today?

3. What makes this new category ‘real’ in carbon markets?

Why are Methane and Super Pollutants so important?

Methane, nitrous oxide, and ozone depleting fluorocarbons account for a significant portion of climate change forcing that we are experiencing today. Methane emissions are responsible for about 30% of recent warming , and nitrous oxide has caused about 10% of warming.

Even though super pollutant concentrations are much lower than CO₂ in the atmosphere (e.g. methane is at around ~2ppm vs CO₂’s 420ppm), super pollutant gases have a high global warming potential as measured over a 100 year time period relative to CO₂:

Eliminating these emissions are a huge opportunity for impactful climate action to manage as outlined in the US National Academy of Science Engineering and Math report in 2024. Targeting non-CO₂ greenhouse gases can shave off significant risks from climate change before 2050:

The speed of change by managing methane emissions is striking. Because the CH₄ molecule is active and unstable, it breaks down within 15 years - so stopping emissions now could lead to a rapid decline in atmospheric concentrations. To use the famous ‘bathtub’ metaphor, it’s not just that stopping water entering the tub means that the water doesn’t rise anymore: it means that the excess water (i.e. ambient atmospheric methane) will disappear in a fraction of the time relative to CO₂.

The result, per Dr. Gabriel Dreyfus et al:

“non-CO₂ targeted measures when combined with decarbonization can provide net cooling by 2030 and reduce the rate of warming from 2030 to 2050 by about 50%, roughly half of which comes from methane”

In other words, we can slow down global warming by focusing activity on methane and other non-CO₂ super pollutants.

How do we create solutions for Super Pollutants?

To start, the atmospheric science community is advancing rapidly to pinpoint hotspots now visible through satellite imagery or other detection solutions. Turning off these excess emission sources at the metaphorical spigot enables businesses to generate emissions avoidance credits. Destroying these gases as well is a credit generating project.

Considering methane, major emission sources include but are not exclusively:

• Oil and Gas extraction, transport, and distribution

• Livestock enteric methane emissions

• Landfill emissions

• Wastewater processing emissions

• Agricultural emissions, particularly rice farming

• Permafrost emissions

• Wetland emissions

Businesses are springing up to develop solutions for reducing Super Pollutant emissions, building revenue streams on emissions mitigation or destruction credits. Crediting mechanisms for these activities are coming online as well, especially as new projects deploy to manage the different classes of super pollutants.

Note: Methane credits today are emission avoidance credits. While the prospect of ambient methane removal is quite exciting, the technology may be many years away from field deployment and commercialization at the time of this writing.

In the voluntary carbon market, several crediting methodologies are in place already, and their registries have been issuing credits. Projects for landfill methane emissions have been in existence for several years, using Climate Action Reserve and Verra for methane management crediting based on activities with landfills, livestock, and coal mines.

Other registries and registry endorsing bodies are taking notice as well, with American Carbon Registry and the International Carbon Registry (ICR) creating methodologies for capping orphaned, abandoned, or marginally producing oil and gas wells - noting that ICROA granted unconditional endorsement to ICR in January 2025. Furthermore, in June 2024, the Integrity Council for Voluntary Carbon Markets approved using the Core Carbon Principle label on 27 million issued methane and ozone-depleting substance destruction credits. These quality labels are crucial for establishing trust in the credits and projects that they issue from.

For nitrous oxide, 40% of emissions are from human activities, primarily from agriculture, per the IPCC, so efforts at stopping emissions in that economic sector would be a path forward - enough to warrant a methodology for crediting nitrous oxide photocatalysis.

Ozone Depleting Substances (ODS) such as CFCs and HCFCs typically come from leaking older refrigerant systems. Collecting and destroying these containers to create carbon credits is painstaking project work, but which offers financial incentives to build a business.

Beyond voluntary markets, compliance markets have protocols as well for projects that collect and destroy Ozone Depleting Substances, with projects generating credits that have been traded systems in California and Washington State. Based on voluntary market price points for non-CO₂ credits (more on this shortly), these credits trade at or below Washington and California compliance market clearing prices1, as well as below UK and EU ETS prices at the time of this writing.2

What makes the Super Pollutant opportunity real for carbon markets?

Several factors are key drivers, including price, co-benefits profile, and third-party rated quality measures.

Price points. These projects are coming into the market at a price that is within the range conducive to adoption in voluntary and compliance markets. The table below that summarizes the four major pillars, with price points, supplied by Robert Cheesewright and Tom Fallows at Pinwheel:

The price point of the ‘second generation avoidance’ credits stands out, sitting between first generation avoidance and higher priced durable carbon removal, and roughly at the same level as Nature-based solutions. Considering strictly price and quantity of credits, this price point would suggest that methane and super pollutant projects would be able to command the same transaction volume as large quantity nature based projects. In fact, there are some hints at this already with Guacolda Energia retiring 2.3 million methane credits in February 2025.

Co-Benefits. The co-benefits narrative behind methane and super pollutant credits are more challenging to tell in comparison to more compelling stories surrounding other types of credit projects. Put bluntly, nature-based, carbon removal, REDD+ or REC credit projects have found an easier time to weave their story into ESG reporting and speak to the community story behind projects. Qualitatively, as noted by Calyx Global ratings, methane and Super Pollutant credits are not as ‘charismatic’ as many other classes of credits, and as such may be undervalued by carbon markets.

Credit Quality. Building on the co-benefits stories, Calyx notes that these ‘uncharismatic’ super pollutant projects tend to have a higher credit rating than their more ‘charismatic’ counterparts:

This is not to say that ‘charismatic’ projects are bad - far from it - or that their quality ratings won’t improve - they likely will over time with more rigorous methodologies and enhanced project management practices and technologies. That said, in the current carbon market environment which is seeing a preference to quality measures, credit purchasers are demanding more Super Pollutant credits.

Market results. In light of the trends above, the methane and super pollutant credit purchases and retirements are expanding rapidly. To wit, 2024 methane credit retirement volume increased 70% over 2023. Reaching nearly 4.4 million credits in that calendar year,3 methane alone representing about 2.5% of the 175 million voluntary carbon market retirements in 2024.4

This trend is continuing in 2025 as well, with Q1 non-CO2 retirements seeing the largest number of non-CO₂ gas credit retirements on record per MSCI5.

The market conditions for this growth are making for a methane and super pollutant moment. The growth of retirements in voluntary markets suggests that corporates prefer highly rated quality credits at a price point approximately akin to nature-based ARR, IFM, or soil carbon credits. The advent of new technologies, new projects, new crediting methodologies and (most importantly) the endorsement of registries themselves by quality monitoring bodies is a key driver of this trend. These are reasonably priced, high quality credits, though project co-benefits outside of emissions reduction is a hindrance.

Conclusion

Methane and Super Pollutant Elimination credits are an unheralded and rapidly growing segment of the market. These projects offer clear and direct climate benefit in the near term, and are settling in at prices and volumes that suit the needs of voluntary and compliance markets. As such, they slot in nicely to a portfolio as a fourth ‘pillar’ alongside traditional avoidance offsets, nature based credits, and durable carbon removal.

My take:

• Super pollutant emissions represent a clear and actionable, though overlooked, focus area in climate.

• Action to reduce methane emissions in particular can lead to significant climate impact in short order.

• Several solution pathways are in place already with more under development.

• Carbon credit markets are expanding rapidly for these emission reducing or destroying activities.

What do you think?

Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer or associated organization.

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“A bit of advice given to a young Native American at the time of his initiation:

‘As you go the way of life, you will see a great chasm.

Jump.

It is not as wide as you think.”

― Joseph Campbell

Welcome back! I’m writing this as a companion post to Part 1 where I proposed that CDR is at a ‘chasm’ point between an early market and a more mainstream class of customer. In this post (Part 2 of 2), I will offer some suggestions on how a carbon removal project developer might make that transition. Once again, I’ll adapt key principles from Geoffrey Moore’s Crossing the Chasm to durable carbon removal, this time talking about specific actions which early stage companies can take that might yield success.

As a reminder, here is a graphic of Moore’s technology adoption lifecycle curve:

And a shorthand reminder of the three segments most in play for CDR now:

1. Enthusiasts (AKA Innovators) who are most interested in technology for technology’s sake.

2. Visionary customers who want to be the first to implement new solutions as the start of revolutionizing the way businesses operate.

3. Pragmatists who are Mainstream customers less interested in being the first to lead, desiring lower risk products at higher volume, with more sensitivity on price.

Because these Mainstream customers are qualitatively quite different in their needs from Early Adopters, succeeding with that group is akin to bridging a marketing Chasm.

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Achieving product adoption in this third, Pragmatist group requires a different set of tools compared to the first two. To that end, based on my reading of Moore’s principles here are some strategies that I have adapted to durable CDR.

A: Target a segment of customers, not a whole market.

Moore talks a bit about finding a market larger enough to be A) financially meaningful but B) small enough that a company can achieve at least 50% of market share among those customers. Pragmatist customers are seeking ‘the market leader’ no matter what that market might be - this group might be geographically defined, or psychographically defined, but the critical point is to define a small enough segment that you can dominate while still making meaningful financial gains.

Many companies fail by trying to define their market too broadly: “We’ll target all of forestry with our innovative CDR solution!” is, for a startup, an impossible task. Venture investors do like a 10-year ‘hockey stick’ growth curve showing how the company (and its investors) could be zillionaires…in 2037; but they also really like a startup who shows how the initial, well-defined, smaller market segment will get the company through the next 2-3 years. Defining and dominating a tiny segment of the market and getting your business started among mainstream customers in that group is a way to win.

Examples: Carbicrete is manufacturing cast concrete pieces using CO2 as a feedstock. It would be one thing if they were to target “all concrete producers” - a daunting task. Rather, they fixate on a specific starting point that would likely yield success, and then build from that initial group of customers in which the solution you provide is the dominant one. Example 2: Goal300 is targeting Christmas Tree farms in the Pacific Northwest as customers who would apply enhanced rock weathering to soils. It’s a specific type of customer, who has a customized set of needs, but large enough to get the business started to bridge later to a more mainstream market.

Generating reference customers through word of mouth is the goal here. One mainstream Pragmatist customer will talk to other Pragmatist customers about their product experience: as they are more risk averse relative to Visionary customers, they value the assurance of having another person’s opinion on a product before buying it. Cast concrete purchasers who speak to other cast concrete purchasers. Christmas Tree farmers who talk to other Christmas Tree farmers in a particular region.

Talk to a variety of customers in different segments when thinking through which one to target. And also listen for the needs of various internal stakeholders within that customer company (more on this coming up in Part ‘B’ below!).

A great way for such customer discovery is to attend the industry conference for that particular customer segment! Learn who they talk to, and how they relate to each other, and what their common needs are. Because insofar as a market exists, it moves at the speed of word of mouth from reference customer to reference customer, building momentum for success among the first mainstream segment to target, so that the product can get adopted by other segments after establishing itself as the market leader in that initial ‘beachhead’ segment.

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B. Figure out how to satisfy three crucial stakeholder roles in your target customer.

Those influencers within the customer entity, per Moore, are:

1. The end-user: who uses the product you sell

2. The technical buyer: who evaluates the qualifications of your product

3. The economic buyer: who provides the financial resource to pay for the product

To illustrate, I’ll use the best non-climate example from my professional experience in pharmaceuticals:

• The end-user is the patient, who uses the product to combat a disease

• The technical buyer would be the physician prescribing the pharmaceutical, based on their expert evaluation of the attributes of the product

• The economic buyer is the private or government insurance company - a ‘Payer’ in pharma industry terms - or in some cases the patient themself who pays for the pharmaceutical intervention.

For durable CDR companies in a voluntary carbon market, the end user could be the corporate sustainability professional who uses the carbon removal credit to report on the Net Zero goal achieved through offsetting (or insetting). The carbon removal purchase itself serves a useful purpose to that individual.

The technical evaluator could be an outside consultancy or internal group of technical people hired for the purpose of understanding the project(s) in play. Unlike pharmaceuticals, there’s no state-mandated licensure for prescribing CDR tonnage! A select few companies have large numbers of in-house technical staff who evaluate CDR projects as they come in. Most mainstream companies will not have these resources, and as such would rely on an intermediary, such as a marketplace, broker, or consultancy to provide that technical diligence.

The economic buyer is typically the Finance department, where price for tonnage would be paramount relative to other projects that are recommended by the sustainability department - and external or internal evaluation teams. As I wrote previously, one way to convince a CFO is to demonstrate tangible economic value by pursuing the carbon removal project. Bundling the CDR credit through insetting with a physical product, or otherwise selling the physical product of carbon removing activity alongside a separate unbundled offset represents a revenue-generating prospect for the CDR company who can sell a physical product while removing excess atmospheric greenhouse gas. Note that there are many different types of projects, and not just offset projects, that the end-users and technical buyers would recommend. So valorizing the ROI is a pathway to be persuasive to the economic buyer audience, per CDR.FYI’s 2025 Market Survey.

C. Market the whole product, not just the core product

An early stage Visionary buyer typically has performance expectations for the core product itself, and is willing to forego the supportive services that would make the purchase easier to handle. Pragmatist customers’ view is the opposite: they need surrounding product or service offerings that make the purchase easy to integrate into their existing business.

For a Pragmatic class of CDR customers this could mean: insurance services, credit ratings, or even marketing materials that enable the sustainability office to feature the project in an ESG report.

In particular, one big concern among Pragmatist customers is that the CDR supplier will go out of business, leaving them with an unsupported amount of CDR tons that they would have to answer questions about. Demonstrating post-sale customer support and contingencies would address this risk.

Selling a ‘whole product’ could also mean working with a broker or other intermediary who would package the durable CDR credit with other credit types, such as lower priced nature-based carbon removal, avoidance/REDD+/Renewable Energy offsets, or industrial waste gas destruction credits. That would lower the average price per ton of the entire ‘market basket’ while providing different qualities of offset to the buyer.Rather than competing for a vanishingly small attention span for CDR, the offset would be considered alongside other types of projects on offer for a Sustainability office.

So how can a CDR project developer start to make the leap?

While these three tactical suggestions could be useful for durable CDR companies to make inroads into a market of Pragmatists, the greater issue could be making the internal leap of faith required to adjust to these market forces.

The thinking surrounding pursuit of an early stage customer - heaving a technically less polished, core product over a RFP Visionary transom and, well, praying - is not a strategy that would work to gain market traction among Pragmatists. Adjusting one’s own approach to understand the mindset of the mainstream customer, respect their needs and motivations, and meeting them where they are at will be the way to success. That’s why identifying that one small niche of a Pragmatist market is so important:

Oftentimes in other industries this has meant that the visionary startup founder does not have the skills or interest to speak on equal terms to an otherwise risk-averse customer. Visionaries are great at speaking with other visionaries; pragmatists with pragmatists. So it follows that bringing in new talent to meet broader mainstream needsOtherwise boards might have the uncomfortable task of replacing a founder for the sake of company survival.

Getting across a Chasm is not an easy task. But, a necessary one in order for an early stage company to achieve its potential. In carbon removal the results can be worldchanging, provided the durable CDR company has the right tools and, more importantly, internal mindset to adjust and make the leap. It’s a challenge to be sure but one that is possible to achieve.

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Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. This post originally appeared on the Institute for Responsible Carbon Removal blog. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer or associated organization.

“Every creator painfully experiences the chasm between his inner vision and its ultimate expression” -Isaac Bashevis Singer

Summary: Carbon removal is at a ‘chasm’ point between early customers who are interested in visionary new products and a more mainstream market who desire pragmatic, whole solutions. There is some evidence that this transition is happening already in a very limited fashion.

Hi all, I’m writing today as a participant in and observer to the early stages of the Carbon Dioxide Removal market, which appears to be at a crucial point. The hallmark of CDR purchases so far has been characterized by early customers who are intent on ‘seeding the market’, leaving an open question as to who a customer would be beyond that. Many early stage carbon removal startups struggle to make progress with finding customers for the credits that they aim to sell.

To that point, CDR.FYI’s 2024 Year in Review1 sums up CDR at the end of 2024 as a:

“picture of a market that has been seeded and nurtured by a few hard-core buyers who have continued to increase their commitment while struggling to “cross the chasm” to the next stage of buyers who will further scale the market.”

To address this situation, I’m writing his post (Part 1 of 2) to be descriptive, talking about CDR’s early customer segments by drawing from Geoffrey Moore’s excellent Technology Lifecycle Adoption Curve, outlined in detail in his classic marketing book Crossing the Chasm.

Part 2 will be more prescriptive, suggesting specific tactics that CDR companies could use to cross the chasm and find new mainstream customer groups.

Here is a graphic of Moore’s adoption lifecycle curve that I’ll refer to (repeatedly) in Parts 1 and 2:

From this, three segments are most relevant to CDR now: Innovators/Enthusiasts, Visionaries (AKA “Early Adopters”), and the Pragmatist Early Mainstream.

I’ll provide examples of CDR customers that are roughly in each of those segments to illustrate the nature of the voluntary purchasers to date.

A general sweep of this lifecycle curve paints a picture familiar to those who have followed the start of new technologies over time: Enthusiasts and Visionaries in an early market, followed by a much larger mainstream market, separated by a gap in expectations - The Chasm - denoting a marked difference in customer expectations for a more standardized, robust solution. Note how much bigger the Pragmatist segment is relative to the Technology Enthusiasts and Visionaries! Getting to that segment of customer is key to technology startups’ survival in the long run, and carbon removal is no different.

Technology Enthusiasts:

Description: This group (sometimes called Innovators) are most interested in technology for technology’s sake. They take pride in being the first to get their hands on something so they can experiment with it, and are usually the most forgiving of quality issues - priorities are access to anything new New NEW!

To connect with these customers: Features and possibilities are most important. No need to sell the larger vision - the technical aspects and ‘cool’ factor of being the first are enough to convince.

CDR Example: The first greenhouse customers from the famous Climeworks ‘Capricorn’ site in Hinwil, Switzerland which started selling CO₂ gas in 2017 are the nearest Enthusiast customers. At 900 tons per year, Capricorn was a smaller demonstration project relative to the larger scale of later Climeworks DAC facilities - it closed down in 2022. Notably its first customers were for the physical gas rather than for the carbon removal credits. The voluntary market crediting standards had not been developed yet, and the main application of this demonstration site was to provide a feedstock. Arguably, both Climeworks and the customers themselves were coming to grips with how to use the technology to suit their needs, which is a signature characteristic of this customer segment.

Visionaries

Description: The Visionary has a dream to transform the way business is done as a means of achieving a long range goal. Establishing that vision is the foundational basis of why they are making their usually high profile purchase. Typically, they are not very price sensitive at all, in service to the ideal notion that they have for where the technology could go, and are willing to accept the product itself as enough - they’ll figure out the details later once the supporting services get sorted out.

To connect with these customers: Talk about The Big Vision about how this could revolutionize businesses, industries, and markets. (How to define those markets coming in Part 2…) In effect, they provide that first client for a startup, enhancing visibility and ultimately credibility through a successful pilot project - so the customer can show the world that this thing works on a limited scale outside a laboratory.

CDR Examples: In CDR, examples of this might be the first Stripe purchases long, long, ago (discussed in a Zoom event far, far away…)

Additionally, an example is how Shopify began purchasing CDR in 2020 through its Sustainability fund, clearly making a move to be in the Visionary position, epitomized by the words of CEO Tobi Lütke:

“We need more demand to get better pricing, but we need better pricing to get more demand. How do we solve this puzzle? By intentionally overpaying for carbon sequestration to kickstart the demand.”

Finally, one could argue that the Frontier Offtake purchases (and also its earlier pre-purchases) also constitute this type of buying cycle. The large technology and consulting companies who constitute the Frontier buying group are doing so to seed the market for future purchases.

To that end the Frontier group has entered into long term agreements with several CDR companies who have the tech proven out enough to deliver over several years. This is a crucial step to help these firms enter the mainstream. The first production runs have an offtaker - and that’s crucial. The next step is to demonstrate they are less risky to more pragmatic customers outside of the Visionary customer segment.

The Chasm

While there are differences between Enthusiasts and Visionaries, the contrast in customer demand and size of market opportunity between them is not as great as between Visionaries and Pragmatists.

A company selling the same technology to the same company might constitute a different customer on either side due to the rationale behind the purchase, price expectations, and sales style. Some companies are able to make this transition to meet Pragmatists customer needs at higher volume; some do not and do not make the crossing. I’ll talk about the definition of Pragmatists, and then provide some examples where we may be seeing some limited Chasm crossing already in CDR markets.

Pragmatists

This customer segment is interested in a whole solution that they can use for a defined business purpose. They expect progress to be incremental, rather than revolutionary, have much higher standards of quality and are much more sensitive to price relative to the Visionary segment. Pragmatists are not as interested in being the first to lead and demonstrate how business practices could change, and instead are more inclined to listen to other voices in their own industry and ask what standards exist for a new line of products on offer, which come with their own set of pre-prepared support tools. They also expect a selection of competitor options to choose from - which to them is a signal of a more robust, less risky set of solutions - and desire a rubric of criteria to evaluate these competitors so that their purchase might achieve the pragmatic business solution they seek.

It’s the rationale and expectations of the purchaser which are so different on either side of this Chasm, requiring a shift in a supplier’s marketing mindset to achieve traction in the larger, more mainstream Pragmatist segment.

To connect with this type of customer: The large-scale purchasing Pragmatist is less likely to take a risk. They don’t want the pilot facility’s or ‘beta’ version of a product. Even with a First of a Kind (FOAK) facility, they would prefer not to have the first batch - more likely the second or subsequent batch runs. Showing them a ‘whole product’ (again, more details in Part 2) that produces results is more important than the core product alone.

CDR Examples: In Carbon Removal, the most pragmatic customer today arguably is Microsoft, focusing in their 2023 and 2024 RFP purchases. The defining purpose of Microsoft’s behavior is in line with its 2020 pledge to by 2050 “remove from the environment all the carbon the company has emitted either directly or by electrical consumption since it was founded in 1975”.

In short, they want the sheer tonnage that their portfolio of suppliers can provide to them through a rigorous RFP process.

Microsoft’s biggest project selections in 2023 and 2024 are Bioenergy with Carbon Capture and Sequestration - which has been around for longer than many other CDR technologies, and as such is more of a proven method2. The chief project developers to date are large Scandinavian energy companies, who themselves are more risk averse than a small venture funded startup, and in general can count on large levels of national government support. Some larger DAC suppliers also complement the large BECCS, purchases, such as Heirloom and OnePointFive, which are quite advanced in their funding and technology development (i.e. lower risk).

Notably Meta left the Frontier group of companies and initiated Symbiosis in partnership with Microsoft, Google, and Salesforce to focus on less technically risky Nature Based Solutions to achieve a different type of carbon removal at a typically much lower price than durable CDR is able to offer.

Conclusions

To date, CDR has drawn customers from all three of Moore’s Enthusiast, Visionary, and Pragmatist groups - some have found Pragmatist customers, while many others are striving - and at times struggling - to do so. Not all will be successful at making the transition to a more mainstream market.

The sheer numbers of early stage suppliers are impressive: Nat Bullard in slide 71 of his 2025 annual presentation indicated that there are over 500 CDR startups in the world - that’s a lot! However, the early adopter (i.e. Enthusiast and Visionary) customer segments are not big enough to support them all. Hard prediction: many potential suppliers will likely go out of business or consolidate at distressed valuations in the coming years.

To forestall a significant decline of the CDR industry, early stage carbon removal companies are going to need to find ways to create more mainstream, larger numbers of customers who will be needed to sustain industry growth - and remove more atmospheric CO₂.

What specific tactics could CDR suppliers employ to grapple with the Chasm? Read on in Part 2 - coming soon!

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Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer or associated organization.

“No man is an island, entire of itself; every man is a piece of the continent, a part of the main.” - John Donne

Hey everyone! It’s January and that means year-end data is now available - and lots of it! - from a wide variety of sources covering the previous 12 months of activity in carbon credit markets. My goal in writing this post is to unearth some insights from the broader voluntary carbon market; my hope is for folks in carbon removal to consider how a broader landscape may affect their activities to durably remove CO2 from the atmosphere. To take John Donne’s quote a step further: CDR credits are not islands entire to themselves, but a piece of a broader carbon credits ‘continent’, a part of the main VCM.

In that light, I’m going to totally nerd out analyze some year end data from 2024 about price and quality expectations across a broader voluntary carbon market. I’ll use a framework (alluded to by Robert Hoglund) of three sub-markets of the VCM: traditional avoidance credits, Nature-Based removals, and novel/durable CDR.

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Traditional avoidance/renewables credits

Quality, quality, quality. For the bulk of credits retired in the VCM, one trend in 2024 is a flight to quality. Several sources noted this, in particular market analytics company MSCI, as measured by an increased the percentage of retired credits achieving MSCI’s rating of “A” or “AA” (6% to 12%), and significant decrease of retired credits rated “CCC” (29% to 15%), comparing Q2 2024 values to Q2 2022. Increased scrutiny as required by new regulations such as CSRD or California’s climate disclosure law may be a reason for this, in addition to media reports critical of carbon credits in this segment or lawsuits for greenwashing against major companies.

As the market for carbon credits of any variety matures, the type of rating employed by MSCI and many others may allow a shorthand for sustainability professionals to evaluate projects and price accordingly by rating. If this trend to favor quality continues, then projects that remove CO2 from the atmosphere would get more attention - assuming CDR projects are able to obtain such high ratings.

Volume is flat. Purchasers’ flight to quality is affecting VCM volume as well: credits retired is plateauing in recent years (by some accounts slightly declining) at around 170 to 175 million tons retired annually, per Sylvera’s 2024 Year-end report. That said, the market is demonstrating much greater volume relative to 2018 to 2020 totals.

Increased demand for high quality has led to more Nature Based Solution (NBS) carbon removal project tonnage retirements, totaling 16% (blue + purple in the Sylvera chart): Afforestation/Reforestation/Revegetation (ARR), Improved Forest Management (IFM), or Soil/Agricultural removal credits. The REDD and ‘Avoidance’ (i.e. Renewable Energy Credit) categories listed here are declining in volume, from 73% in 2021 to 58% in 2024 in a market of roughly the same size year-over-year. Durable carbon removal stakeholders please note that for all the increases in volume in durable CDR, the entire market (for now) is only a sliver of the picture: 200k credits retired out of ~175 million in 2024.

Purchasers are retiring credits. Despite the quality concerns and headwinds, the number of buyers who are retiring credits continues to grow. By this data, the number of organizations retiring credits has more than tripled since 2020.

So to recap the traditional market segment - and overall picture - there are:

1) more buyers than ever retiring credits in global offset markets, who are

2) retiring just about the same amount of credits,

3) of higher quality, with

4) a greater percentage of carbon removal, including NBS, in recent years.

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Nature Based Solutions

The flight to quality led to Nature-Based carbon removal credits getting to 1 in 6 retirements in 2024, compared to 1 in 10 in 2021. Registries for NBS credits adhering to ICVCM Core Carbon Principles, and CORSIA standards are a key factor driving this trend. That said, project issuances of NBS removal credits declined while NBS retirements remained steady in 2024 relative to previous years, with NBS offtake credit price at just over $20/ton per Allied Offsets 2024 VCM report.

So - there’s a possibility of an NBS crunch if this trend and preference for quality continues in 2025. The question is whether corporate buyers will continue to pursue nature based removals or instead select durable CDR as a credit of choice going forward. And one factor influencing a more mainstream credit purchaser is price.

Durable CDR

Pricing will be a critical factor, with estimates of potential purchaser preference outlined in the CDR.FYI and OPIS price estimate survey, organized by CDR method, for both 2025 and predicted 2030 prices. (Disclosure: This week I joined the CDR.FYI team of collaborating volunteers)

One interesting cut on the data, noted in the report, is how ‘incumbent’ carbon removal buyers would have different price expectations from prospective buyers of CDR credits. Specifically looking at their price expectations for “Good Value”, the team noticed that previous purchasers of durable CDR credits were willing to pay (usually) higher prices than those respondents who had not yet purchased credits.

Given these price sensitivities for a new prospective purchaser, any carbon removal method will not be able to compete strictly on price, especially if sustainability offices face budgeting issues in future years. Instead, encouraging a portfolio approach that combines NBS removal with a small amount of durable CDR might be a way to establish a new market. Then, as the novice durable CDR purchaser gets more familiar, the price expectations would rise and possibly purchase a greater volume of durable CDR credits.

In 2025, SBTi guidance on how to fit durable carbon removal offsets into a Net Zero pathway could improve the prospects for all durable carbon removal credits. That said, if credit customers believe they can get enough of the durability, additionality, and verifiability from Nature based solutions, then that would suggest a world where lower priced carbon removal credits in 2030 are favored.

Conclusions

Durable carbon removal is still in its early stages as an option in carbon credit markets. As the larger voluntary carbon market moves to a more quality-focused stage of development, registries, standards, and ratings will play an increasing role as purchasers evaluate projects that are ready to provide credits. Rather than competing strictly against other classes of carbon credits, durable carbon removal project developers who are keen to find purchasers would do well to consider how their credits integrate with trends shaping the sub-markets for Nature Based Solutions and traditional offsets. Because as those markets shift, durable CDR could find opportunity for future credit purchasing to finance industry growth.

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Jason Grillo Co-Founded AirMiners and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer or associated organization.

“Every new beginning comes from some other beginning’s end” -Seneca

New year, and new vistas abound in 2025! Officially announcing that I had my last day at AirMiners in December and am now open to new opportunities in carbon dioxide removal and climate more broadly.

I'm grateful for having worked with the team (Tito, Adina and Debra) throughout my nearly 5 years with the AirMiners organization, and going forward I aim to contribute my talents to removing excess atmospheric greenhouse gases to drive economic value. Quite the privilege to have played a small part at the start of something bigger than any one person, at the start of something that promises to have a huge impact on our economy, society, and climate future.

In particular, I’m proud of:

• Hosting the AirMiners virtual panel events (and two virtual half-day conferences!) since the spring of 2020.

• Co-leading the Launchpad accelerator which has graduated nearly 200 CDR startups worldwide across all methods of carbon removal, and MRV, with some methane folks sprinkled in too.

• Educating carbon removal buyers, investors, and policymakers on what CDR is and how it can be important for their own goals.

• Engaging with members of the community and key stakeholders around the world to advance carbon removal ideas, with emphasis on A) carbon markets, B) workforce development and C) policy, policy, policy.

So…what now?

While I’m open to the right full time FTE opportunity, my personal LLC is open for business today, contracting or subcontracting for projects, providing strategic advisory services with foundational domain expertise in carbon removal. Emphasis on customer development and go-to-market strategies, and helping organizations of any type in carbon excel and grow.

This could mean:

• For corporate clients, or marketplaces, or startups: commercialization solutions for those pursuing insetting or offsetting to improve their bottom line.

• Ecosystem players or NGOs: policy assistance and workforce planning for economic development through carbon management.

• Marketing: Communications and branding, research, content.

Interested? Message me with this button here:

As always, you can read more about some of my ideas for carbon markets, carbon removal workforce development, and climate policy here going forward, every month or so.

Thanks all and I hope everyone had a happy and safe holiday season. Onwards and upwards!

All my best,
Jason G.

“Knowing others is intelligence; knowing yourself is true wisdom” - Lao Tzu

Writing this in December as indeed winter is upon us, I’ve noticed a different kind of winter that may be coming to carbon removal: a general decline of interest in sustainability and climate among corporations who would be voluntary carbon market purchasers. In this post, I’ll explore the nature of this problem, recap how corporate rollback has happened before, and offer some potential paths forward.

First, some context. While the last 5 weeks since the US election has seen climate scrambling to understand what the implications of Donald Trump’s victory might mean for policy, evidence has been piling up for approximately 18 months prior to that. ESG hiring growth is down after a crescendo from 2019-2021, and very recently large corporations such as Coca Cola and Goldman Sachs are changing course on how to deliver on sustainability targets.

Declining corporate sustainability budgets may constrict sales opportunities among more mainstream voluntary carbon market purchasers.Indeed, it appears that while targets are being set, corporations are falling short of resourcing efforts to meet those lofty goals. Additional macroeconomic changes - real or projected - such as inflation, high tariffs, or the end of Zero Interest Rate Policy may cause customers and investors to withdraw support.

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For a case study in how a generation of startups might grapple with this, let’s consider lessons from “Cleantech 1.0” from approximately the mid-2000s to early 2010s. In that time period, a wave of startups created a myriad of carbon-free energy solutions - for example, solar, wind, EVs, batteries, or energy efficiency software. A scarcity of patient capital, low-priced competition from abroad, particularly China, and inconsistent government tax credit support consistently challenged companies working on solutions in these sectors.

The solar, wind, and battery startups were clear: they were not in the “alternative energy” business, they were in the energy business with the all-important Levelized Cost of Electricity (LCOE) as their benchmark. Demand for clean energy persisted and grew among energy customers, particularly due to Germany’s Feed-In-Tariff policy for solar, wind and geothermal. Support by Germany’s leadership, and experiential learning by deploying led to solar cost declines outpacing their forecasts by decades:

This enabled renewable energy companies in the early 2010s to survive - and thrive - during the ‘long winter’ for climate investment between 2011 and 2019.

Two more examples from outside climate on the practice of business re-definition, one a failure, one a success:

1. Railroads. In the early years of the twentieth century, railroads were a significant player in the United States’ and world economy, moving huge volumes of goods and passengers. Today railroads occupy a fraction of the economy since automobiles, trucks, and air transportation of goods and people appeared on the scene, taking away significant market share such that many railroads had to declare bankruptcy. The railroads’ failure: defining themselves too narrowly as railroad companies, not more broadly as transportation companies

2. Professional wrestling. Yes, I watched my fair share of the spectacle on TV during my (awkward) junior high school years. What I didn’t realize then was that I was witnessing a redefinition of a business that decades later has thrived and grown. How? A philosophical shift in how they defined their business: specifically, the owner of the then-World Wrestling Federation quipped once that they are in the “sports entertainment” business rather than the wrestling business - that is, oriented to the customer rather than the process of wrestling itself. Nearly forty years later, World Wrestling Entertainment had revenue of over $1.3 billion.

To be clear, I am NOT suggesting that CDR startups become ‘climate entertainment’ companies! However I believe that companies who are developing solutions intended primarily to help the climate oftentimes struggle to define their business in a broader industrial context, and that they can reframe their business for success with future customers in the event of a climate tech ‘winter’.

In short, consider the thought that ‘climate’ is not an industry: it’s an umbrella term for technology and business innovations spanning a wide variety of industrial sectors, that happen to yield low or negative emissions.

For many carbon removal project developers, defining along industrial lines means redefining what business they are in, and figuring out who their customer is, so they can craft a solution in a time that may be challenging in the short term. Doing so could lead to solutions that are able to penetrate existing industries with better/faster/cheaper products and improve climate health as a secondary - and still very important - benefit.

Finding a customer who can utilize the physical product or by-product of carbon removal would integrate carbon removal processes into a larger economy beyond credit sales alone. Deploying the technology for an end-use would generate customer revenue and also lead to cost improvements with experience, per Wright’s Law.

Internally CDR businesses should talk about themselves in terms beyond what they can do for climate. This can happen in founders meetings, with investors, with marketing partners and others who they deal with to bring their solutions to market. And in doing so develop solutions that, for example:

…produce a soil amendment or improve soil health = “we’re in the business of helping farmers deliver high quality food cheaply to consumers”

…generate energy in rural areas = “generating heat or electricity to places that may suffer energy scarcity”

…combine with building materials = “make it easier for homes or roadways to be built”

…use agricultural waste as a feedstock = “ease the burden of disposal owners of agricultural land”

…create gases for fuel or specialty chemicals = “enabling the new energy and materials economy”

…add sandy minerals with affinity for CO2 to coastal ecosystems = “make coastal protection more affordable”1

Carbon removal business leaders can see beyond a purely technical definition of their product, retaining personal motivations to do well for the climate while seeking commercial markets that may not have climate as top-of-mind. Key question: In the possible absence of policy interventions or without carbon credits, how would a bottom-line motivated customer buy a solution to help their own business needs?

What about carbon removal crediting? Offset crediting is still an option if there is sufficient interest among voluntary purchasers - this is still a relevant pathway to viability. That said, companies could decrease unit cost curves by pursuing insetting to deploy more projects, and in doing so lower their internal costs to enable creating offset credits for sale in the voluntary market.

Ultimately, compliance markets will be where carbon removal will see its greatest impact on climate, offering a dynamic quite different from motivations of voluntary carbon market customers. Redefining the business along a utilization pathway is a way of seeing a generation of carbon removal startups through to that time. Figuring out the fundamental business that a CDR company is pursuing could safeguard against market uncertainties as corporate sustainability interest waxes and wanes.

Jason Grillo is a Co-Founder of AirMiners. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer.

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“When we are no longer able to change a situation, we are challenged to change ourselves”

- Viktor Frankl

I wrote at the start of this Substack that it would be a series about carbon removal covering insights about carbon markets, workforce and policy. Today in the wake of the US election outcome, I am going to take on that third topic - policy - with some quick takes on what the US election in November 2024 might mean for CDR Federal and State policy efforts. As much as I’ll write about policy in this post, I can’t avoid the politics of the moment. My instinct is that while US Federal climate policy per se will likely take a step back or two (or three…) in the incoming administration, a reframing of policies that advance carbon removal specifically as an economic driver would be a path forward.

First, some first impressions of what’s possible at the Federal level in the United States. I’ll keep this as specific as I can to carbon removal since there are many, many platforms better equipped than I am to speak to broader policy impacts.

The clearest risk to support for carbon removal comes in how the Trump administration might restructure the Department of Energy, specifically the office of Fossil Energy and Carbon Management (FECM) which has been administering the DAC Hubs and other carbon removal programs. Notably, the DAC Hubs in particular were authorized and funded by the Bipartisan Infrastructure Law (BIL), rather than the Inflation Reduction Act (IRA) which passed on a partisan vote. So it is possible that the bipartisan nature of the BIL funding would insulate programs it supports from being scaled down. The tax provisions of the IRA - in particular 45Q - might be subject to repeal, under a scenario of unified Republican Presidency, House, and Senate.

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Beyond the Direct Air Capture programs at FECM efforts the department has recently taken action on marine carbon removal (mCDR), enhanced rock weathering (ERW), and biochar might be subject to change as well. Look additionally to new appointments at USDA - which administers US Forest Service and Natural Resources Conservation Service, as well as Commerce - NOAA and National Institutes for Standards and Technology - which impact these methods of CDR as well.

For Congressional action, the upcoming Congress at the time of this writing (November 11th 2024), appears to have a thin Republican majority in the House, while Republicans will take control of the Senate. While a comprehensive climate bill (‘IRA2’) is off the table, other policy avenues are open which would require bipartisan support. For instance, the 2018 Farm Bill will be up for renewal, with US Congressman Don Bacon (R-Nebraska) having supported bipartisan climate friendly agriculture legislation in the past likely playing a key role. Biochar, ERW, and soil carbon sequestration advocates would take note. 

For DAC advocates, permitting and the intersection of DAC and energy policy would be areas to watch. Any efforts to reform carbon dioxide pipeline permitting (more on this below) would be a start. Also, the possible re-election1 of Michelle Steel (R-California), who has supported bipartisan geothermal energy legislation, suggests that advancing projects using a geothermal Fervo Energy’s new project will harness the earth’s heat as an energy source for DAC could have support.

Since Federal CDR policy may have to be meted out piecemeal, carbon removal policy advocates could then look to state governments as areas to advance policy ideas. I will recap some of the election results here, outlining particular actions to take in specific cases.

Washington State: Ballot Initiative 2117 failed resoundingly, with 62% voting “No”, thus preserving the state’s Cap-and-invest system for selling emissions allowances and reinvesting the proceeds into the State’s economy. A wide variety of organizations contributed to the “No on 2117” campaign, including corporations such as Amazon, Microsoft, REI, and British Petroleum (!) aligned with several unions and climate affiliated civic organizations. Key to the messaging was the economic benefit to the state in retaining the cap-and-invest system; additionally, there is evidence that the fiscal impact of the state losing $3.8 billion in revenue from 2025 to 2029 if 2117 had passed was persuasive to voters.

What it means: Revenues from the cap-and-invest system will continue apace to flow to the state’s accounts, which are set up to collect and disburse auction proceeds to advance the clean energy economy. For Carbon removal, this includes state grants that CDR companies are eligible for under the Clean Energy Fund.

Going forward, Washington can now pursue linkage in its Cap-and-invest system with California and Quebec’s cap-and-trade systems, as directed by the state legislature in the spring of 2024. How carbon removal credits integrate into this remains to be seen, however. First steps include the Department of Ecology writing a study - slated for completion and release in June 2025 - covering “the extent to which carbon dioxide removal is needed to meet Washington's emissions reduction targets”.

South Dakota: Carbon removal pipeline enabling Referendum 21 failed, with 60% of South Dakota voters rejecting a measure that would have made constructing carbon dioxide pipelines easier in the state. Opponents had argued that passing the referendum would have canceled local governance and removed protections for landowners. 

What it means: Envisioned as a CO2 transportation pipeline for ethanol-based CO2 capture, DAC developers should take heed to consider local community concerns surrounding possible similar CO2 pipeline efforts.

California: California voters approved Proposition 4: a $10B state bond to be distributed to counties, local governments, and Native American tribes to support a wide variety of projects, including clean water security, reducing risk of flood and wildfires, and also improving marine ecosystem regeneration in aid of climate resilience.

CDR angle: With $1.5B slated for wildfire risk reduction, including forest thinning, California biochar producers could see a greater abundance of feedstock for pyrolyzing operations. It might also improve offtake for the biochar itself, which has uses for wastewater remediation. For marine CDR companies, $890M of the $10B is marked for coastal projects; project that improve water quality and promote coastal resilience while also removing atmospheric carbon dioxide might benefit. 

Louisiana: 73% of voters approved a constitutional amendment that revenue from state renewable energy projects, such as wind power, can be diverted to coastal resilience measures

Implication: Similar to California, to the degree that marine CDR projects - particularly in a coastal location - can add to the state’s ability to buffet against hurricanes, floods, and sea level rise, this would be a benefit.

Massachusetts: This is not directly election related, but noting that the state legislature will consider an Economic Development package in a special session, which contains many climate and lean energy provisions which would be important for CDR. The House and Senate had each separately passed their own bill and to agree on a common bill to send to Governor Healy for signature before the current session ends on December 31st.2 

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So what kind of pathways are best for policies to support carbon removal?

In my view, reframing the discussion of carbon removal policy in the United States as an economic development measure and not a climate measure could lead the way to successful growth of the industry.

Why? For one thing there is motivation to do something about climate. Voters - and surprisingly a high percentage (~40%) of Trump voters - at least somewhat agree that climate change is a problem:

But - even among some Harris supporters (~35%) - American voters are not willing to pay for measures to counteract its effects:

Carbon removal projects that show an economic benefit beyond the action of removing excess atmospheric greenhouse gas will be a winner in the policy environment that will likely emerge from the 2024 US election season. The ability to show tangible benefits to people in communities, in the form of providing valuable products or services, or well paying careers - not just project-based jobs - for people who are struggling in an economy that they (fairly or unfairly) perceive to be still ridden with inflation or unemployment. And that might affect how C-suite and corporate sustainability managers perceive the need for climate action, and by extension carbon removal, as investor Susan Su mentions here. The perception of the state of the US economy among Americans has diverged from how the actual economy is performing since the COVID pandemic. This suggests that policies that underscore the economic benefit to voters would find a favorable reception among government leaders at any level.

While there may be limited pathways forward at the Federal level, State and local efforts at CDR policy offer a potentially meaningful way to support the industry. Even if policies are not specifically titled ‘carbon removal’, policymakers can include CDR alongside general economic development efforts - and make a difference in their state, county, or municipality. Respecting the interests of those communities - particularly at a local level - is paramount, as evidenced by the South Dakota measure above. Project developers who are in touch with the communities where they operate can consider how to meet the needs of those where they operate. And that’s important: especially in this environment, building political support starts at the local level. 

This can move the conversation away from carbon removal being perceived as an expense imposed from outsiders, and rather as a source of revenue generating activities integrated into the economy and society, and coincidentally happen to draw excess greenhouse gasses out of the atmosphere. 

Venture capitalist Vinod Khosla wrote over a decade ago that for ‘cleantech’ to succeed it has to be perceived as ‘maintech’ - that it integrates within the industrial base as a natural progression of technology in the minds of customers. Reframing the conversation about carbon removal from a climate technology dependent on specific climate policy to a ‘maintech’ solution that integrates with economic policy is a step forward in an otherwise daunting national political environment for climate in the United States.

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Jason Grillo is a Co-Founder of AirMiners. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer.

This post appeared originally on the blog of the Institute for Responsible Carbon Removal at American University

“The purpose of a business is to create a customer … The customer never buys a product. By definition the customer buys the satisfaction of a want. He buys value. … But price is only part of value. There is a whole range of quality considerations which are not expressed in price” 

- Peter Drucker, “Management: Tasks, Responsibilities, Practices”

One of the questions I hear (frequently!) is “what’s a good price per ton for carbon removal?” Or a variant “What price is carbon removal converging on?” While it sounds like a shrewd question to ask, this assumes that all carbon removal tons are equal - that this is a commoditized market in 2024. Nothing could be further from the case. 

My argument in this post is not only that the attributes of projects and methods of carbon removal are highly variable, but that different customer segments perceive different benefits from carbon removal credits. I’m going to suggest a pricing analysis tool below which addresses these customer segment needs from a couple different angles - stay tuned! 

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But before addressing these customer segments, let’s level-set with some terminology points.

First, Cost vs Price: These are different terms. A ‘Cost’ usually refers to the internal expenses needed for a supplier of a good or service to produce a unit for sale - in this case a voluntary market credit representing one ton of CO2 removed. (Note: Not talking about methane or nitrous oxide equivalents). These take into account labor, cost of the physical resources for production, energy, transportation, and cost of capital.

A ‘Price’ refers to what a producer of a good or service charges to a customer at exchange. The difference between Price charged to the customer, and Cost to the supplier is the Profit margin.

To illustrate, here’s a chart from a conference presentation I recently gave:

Second, Price vs Value: What a supplier charges to a customer for one carbon removal ton is NOT the sum total of the entire value that the customer derives from the purchase. The buyer of a carbon removal ton realizes a value beyond what the market price is that the seller charged for that ton - otherwise they would not have purchased it to begin with.

State of pricing today: A wide variety of value propositions to a customer lead to a wide variation of prices, especially since customers are in 2024 starting to figure out what the value to their organization is of the durable CDR credits purchased. 

Indeed, this is exactly what we are seeing in the 2023 State of CDR report (2nd Ed.) prices based on 2023 market conditions:

What price is the “right” price? They all are! Customers are not irrational, even though there is a high degree of variability in these CDR prices. For example, a customer believed that for Direct Ocean Capture CDR $1,402 per ton is a valuable ton to buy: they wanted to see the exchange happen. Another customer believed that for biochar a $131 ton of CDR is a valuable ton to buy. For each of these customers the price was justified by what they used the durable CDR ton to achieve.

Editing to add on 10/22/24: This suggests the purchasing rationale of some VCM customers is to seed the market with a high price per ton purchase of a VERY early stage tech - at low volume.

Conversely, the method with the highest volume of deliveries the past two years - biochar - is near the low end of the price per ton spectrum, and has a (relatively) low tech risk.

Different customers had different rationales underlying their purchasing decision, value propositions, and thus different price points. The reason for purchasing could have been to neutralize Scope 1, 2, or Scope 3 emissions directly, could have been for branding purposes of being perceived as good stewards of the earth, or perhaps to lock in relationships with suppliers for future credits, or simply to signal support for early stage innovation. SBTi’s Beyond Value Chain Mitigation work offers examples of these reasons. 

My takeaway: the rationale for purchasing credits drives the perception of value, and thus the price a supplier is able to charge to cover their costs of supporting their business.

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Evidence: These self-reported motivational customer segments are evident in the NASDAQ Global Net Zero Pulse report chart below (Sept 2024): 

Granted these are for carbon credit markets writ large - i.e. traditional offsets and less durable nature-based solutions, not only for durable carbon removal - but I would offer that the structure stands, regardless o the type of carbon credit, be it avoidance, less durable CDR (<100 years), or higher durability CDR (>100 years). There is no monolithic rationale for buying durable carbon removal today. When a potential buyer reports that “prices of credits are too high”, the lesson should not be “you should find a way to lower your costs”, rather that “your price is too high for what you are offering to satisfy what the customer views as valuable now”. The options for a startup to take, therefore, are either:

A) figure out a way to improve the value of the durable CDR credit delivered to the type of customer you are trying to address or 

B) Find a different customer who will find what you are delivering to be valuable at your preferred price

Which leaves carbon removal suppliers at a standstill: if all prices are valid, then what price should I charge?

One answer lies in a powerful survey tool that I may be helpful: a Van Westendorp model. This technique can yield an acceptable price range for a given set of potential customers.

The four very specific questions asked in Van Westendorp analysis are:

• At what price would you consider the product to be so inexpensive that you would feel the quality couldn’t be very good?

• At what price would you consider the product to be priced so low that you would feel it’s a bargain?

• At what price would you say the product is starting to get expensive, but you still might consider it?

• At what price would you consider the product to be so expensive that you would not consider buying it?

The result, a chart that looks something like this example, with one line tracking each of the four questions, price points on the X-axis, and % of respondents who accept the price for that question on the Y-axis (e.g. 80% of respondents consider $20 ‘Acceptably cheap’):

Note the Acceptable Price Range for the product. And there are several ways of segmenting the data, assuming a large enough set of respondents. For instance, a survey team could segment by industry and see the different ranges represented there. Or ask intake questions (like in the NASDAQ survey example above) to divide up the respondent pool by motivations. Or conduct two sets of questions and change the delivery to be in 2025 vs 2030.

Additionally, you can ask these sets of questions twice, once for lower durability carbon removal, and another time for high durability carbon removal. Charts like the one above would have different price ranges for different purchase types. 

This would yield price ranges that offer a quantitative look at how much the value that a customer feels derives into a specific price that a supplier would charge. Then, suppliers would be able to focus on cost targets to become profitable and support their growth - and ability to satisfy the wants of new customers for their products.

The move from cost-based pricing to value-based pricing for CDR credits is just in its infancy, as many early stage technologies are just now starting to move down the internal cost curve. As internal costs decline in future years, startups can drive value by discovering a price point in line with what the customer's willingness to pay will be, rather than purely to break even on operational costs.

Even in the current market, CDR credit supply companies can learn a wealth of knowledge about building a value proposition story that unlocks a customer through offering additional benefits or driving home the message about the quality of carbon removal credits. And in doing so build sustainable businesses that use voluntary carbon markets to drive impact for the customers they serve as well as for the climate.

What do you think? Let me know here:

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Jason Grillo is a Co-Founder of AirMiners. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer.

This post appeared originally on the blog for Institute for Responsible Carbon Removal at American University

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“Knowing yourself is the beginning of all wisdom” - Aristotle

Part of my dream for the carbon removal industry is a future where many thousands of people find gainful, meaningful employment for work to remove the legacy of excess greenhouse gas. For that vision to become reality - removing the first one billion tons before we believe it is possible today - requires a workforce that is educated, trained, and well-matched for the CDR jobs of the future.

To that end, through the people I’ve been lucky to meet in the carbon removal industry, I’ve been asked quite a bit about how to find a job in CDR. When welcoming new folks into AirMiners, the question of how to find a job is probably the topic most on the minds of those who are new to our community. That’s why in AirMiners we’ve done  two  events ( about this topic - Heidi Lim in particular has some excellent (and oft-cited advice) here.

One pillar of this is: how much can I expect to earn in carbon removal? And that data has been difficult to find. That is, until today with the release of an excellent global salary report created by the CDRJobs.earth team led by Sebastian Manhart.

Building on that hope for finding a job that inspires the best of you is why I’m writing this for you as a CDR job-seeking reader: to help you save time by asking three questions of yourself, about what makes you most effective to direct your efforts to fruitful career goals. 

Please note that these self-revealing questions constitute my own personal advice, and your own results may vary. 

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First, what is your one functional superpower that you bring to the table when approaching a carbon removal company? To be blunt: what is the one thing that you could do immediately in a new role without any on-the-job training? 

‘Functional expertise’ could be marketing campaign creation, operations or program management, corporate financial expertise, or any one of a wide variety of technical skills. And what concrete results have you driven in executing on this skill? In business school my classmates and I practiced the STAR framework to handle interviews: Situations,Tasks, Actions, and Results. What was the Situation you found yourself in, what Tasks were before you to achieve, what were your Actions to attain that goal, and what were the Results you ultimately arrived at. Quantifying those results is especially important: “I developed R or Python to research and analyze X number of deep datasets” “Our marketing campaigns achieved a 200% ROI!” / “We delivered this $5M project ahead of schedule and below budget” marks the success that attracts interest.

Not to discount passion - which is important - but a Grade ‘A’ record of performance plus passion is a compelling story. At the time of this writing, our industry is still in an early enough stage that top functional expertise from different industries will find a ready-made home. Not many have been in CDR for more than five years (myself included!), so bringing a strong transferable set of skills by far the best way to build a compelling narrative to land a new role.

Second, what type of carbon removal do you like best? 

There are a wide - and I mean wide - variety of CDR methods on offer in these early years of the carbon removal industry. The trick is to figure  out which type of CDR suits your skills and interests - as soon as you can - which makes career searching in CDR  much easier. That way as a job seeker you can home in on how the superpower identified above can be useful in, say, marine CDR, Direct Air Capture, biochar, enhanced rock weathering, Measurement/Reporting/Verification, or any other type of carbon removal technology that provides meaning to you. 

Carbon removal is a new enough industry that you as a job seeker can ask yourself what sparks your interest in a particular method of carbon removal. What is it about that method that makes you like it more than others, at a high level? If you don’t have that perspective, fortunately AirMiners own BootUp program provides such an entry point, offering a broad overview of state-of-the-art CDR methods over the course of several weeks.

Most importantly get out and talk to people who are starting up these organizations! Find them on LinkedIn, at networking events, even (gasp) in our main AirMiners community or elsewhere. Ask yourself whether you can envision you working at the type of jobs for people in that method of CDR is a good fit.

Third question: what size organization would you like to work at? The landscape of carbon removal is very much the landscape of startups, though the term ‘startup’ covers a lot of ground in terms of risk and reward. Maybe you are a founder of a company. Maybe you are Employee Number 5, or Number 25, or Number 125 - all of those are new, small STARTUP businesses, with a high degree of risk around technological approach or business model. 

The real introspection to work on is: “in what environment am I most effective at driving results?” Will your 1 or 2 skills from Question 1 above be best unleashed with structure and resources? Or with freedom and latitude without as much to fall back on? Every person has different preferences - and prefers things at different points of their career, especially when factoring for personal and family needs.

The larger a company, even along the more differentiated a role tends to be, and possibly the more hierarchical. Smaller organizations tend to be flatter, favoring those who consider themselves generalists. Plus, compensation - especially for pre-revenue companies - would be more for equity rather than cash. 

Different people in a similar situation could pursue widely varied pathways. For example a recent graduate might want to develop the one functional skill that they know they want to fulfill throughout the next several years of their career, then climb a career ladder or switch companies. Or another recent graduate would say ‘nah, I need my space’ and found a startup or two (or three) in their first years in industry. Knowing yourself and where your talents may best take root - that’s the essence of how to start a job search.

And an added bonus question: How effective might you be in a remote vs. hybrid vs. in-office work environment? The COVID pandemic led to the rise of remote work, with some reversal of that trend in recent years. Fortunately many CDR companies - including small startups - are willing to take a risk and seek talent from a truly global pool rather than limit themselves to a particular geography. 

This post started off with the goal of developing a professional workforce in carbon removal; my hope is that you as a job seeking reader find the career journey a bit easier by asking questions of yourself to guide your job search in a new and growing field. 

Thanks for reading, and wishing you good job hunting!

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Jason Grillo is a Co-Founder of AirMiners. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer.

This post originally appeared on the Institute for Responsible Carbon Removal blog.

TL;DR: A gap exists between where we are and where we need to be in carbon removal by 2030, but with the right factors in play we can overcome it sooner than anyone thinks is possible today.

Hi there! 

Summertime travels are wonderful - the result of oftentimes weeks of planning for where you’re going and how to get there. In the carbon removal industry, we’re moving forward to a destination where gigatons of excess greenhouse gases are removed from the atmosphere.  “NetZero by 2050” is certainly an admirable target - we need to understand where the industry needs to get to by midcentury.

As much as future projections focus on 2050 goals, they can seem, well, a bit distant: nowhere near as much emphasis has been placed on what an interim 2030 goal might look like. And that’s an important goal because we can know now whether or not we are on track, and take actions if needed to meet an end-of-2030 target. A specific, measurable, achievable, relevant, and time-bound goal - 6 years away at the time of this writing - can inspire action today which can make that midcentury vision a reality.

That’s why I’m writing today about what might be 2030 interim CDR milestones for climate goals, a gap in where we might be, and a path forward to tackle that. 

To do this I’m going to outline a target, then use publicly available data sources of leading novel CDR methods to extrapolate a portfolio of projections to 2030. As defined in the State of CDR 2nd Edition report, “Novel” CDR includes DAC, BECCS, Biochar, Enhanced Rock Weathering, and marine CDR methods. 

Fair warning: this analysis includes many assumptions about future growth of various CDR sectors - and I very much welcome your scrutiny and constructive critical eyes. So please, comment away:

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What does a 2030 target look like?

To start off, let’s characterize the 2030 destination.

Fortunately, the aforementioned State of CDR report, 2nd Edition offers an excellent starting point. I’m presenting two scenarios outlined in Chapter 3 of that report: one where our climate settles on 1.5 degrees C without overshoot, and one with overshoot. The data for this comes from the data resources accompanying the report - again, publicly available, and free of charge!

The State of CDR team made multiple estimates, with a median of 260 Megatons of atmospheric CO2 to be removed in the year 2030 for the climate to be on track with the scenario of 1.5 degrees of warming without overshoot, and 70 Megatons with overshoot. 

Others have speculated that the 1.5C number requires as low as 190 Megatons; additionally or as high as 285 megatons. For the purposes of our gap conversation, I’m comfortable to stay with 260 megatons for a 1.5 degrees Celsius result without overshoot.

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Where will the 2030 Megatons come from?

The short answer: everywhere! All solutions are on the table; a portfolio of approaches - some of which are not delivering tonnage yet - are going to contribute to getting to the result. To forecast what a 2030 scenario might look like I’m going to use some existing estimates here from citable sources, and also create some projections of my own based on growth assumptions.

Contributions by DAC and BECCS in 2030 

know that Microsoft and Frontier in particular have gone quite deep in funding new BECCS projects, particularly in Scandinavia. The State of CDR Report Chapter 3 has an excellent chart (below) based on companies’ announced plans to build and deploy BECCS and DAC capacity through 2030. BECCS in particular is indicated to have a capacity of ~20 MT in 2025, rising to ~60 MT by 2030; DAC in 2030 is also projected to be 60 MT, for a 120 MT total between these two methods.

Some caveats: this likely reflects the facilities’ nameplate capacity, so actual tonnage removed - might not perform as well. 

Second, as with all company estimates, delayed and canceled project deployments may diminish future results. 

Contributions by Biochar in 2030  

Per CDR.FYI we know that Biochar is delivering the vast majority of CDR tonnage today and is selling well now, and is poised to grow in future years. By how much is an open question. For the 2030 estimate, I am going to assume linear growth of tons of biochar produced based on the 2023 Market estimates from the International Biochar Initiative/US Biochar Initiative 2023 Global Market report. 

Growing from ~96,000 tons to ~352,000 tons represents a 3.6x increase in physical char produced over two years from 2021 to 2023. Assuming this trend of linear growth continues, then in the year 2030, 31 million tons of biochar worldwide would be produced. And since one ton of biochar contains ~2.8 tons of CO2 (source: 2023/24 European Biochar Market report), that figure represents approximately 87 million tons of CO2 stored in the year 2030.

Note that this figure is the tons of physical biochar produced rather than the quantity of registered carbon credits from them - regardless of whether a biochar producer is selling credits, the physical char stores embodied carbon and represents carbon removed from the atmosphere. Adapting a phrase, if a tree gets pyrolyzed in a forest, and nobody registers the credit, it still does reflect removed carbon1 

Contributions by Enhanced Rock Weathering in 2030

For ERW, the data are a bit more scant, though the Boston Consulting Group offers insights from their 2023 report on carbon removal. With a forecast that 33 megatons will be removed by the entire CDR industry in 2030, 9% of which is ERW, BCG’s result is that ~3 Megatons of CDR will be achieved by enhanced weathering in that year.

That said, I offer that there could be some upside to this - weathering rates and CO2 uptake rates are still under research. And it is possible that deployments may outpace estimates as of now.

The estimated gap

The sum total of those four methods that we have credible 2030 estimates for is 204 megatons to be removed in that year, leaving a gap of 56 megatons to be fulfilled by other methods or by outpacing the projected trajectories of the methods mentioned above.

How to make up a gap? 

1. Bring additional methods to scale.

Marine CDR in 2030 could contribute to reducing the gap mentioned above, however it is challenging to estimate since most startups are not (yet!) reaching volume at the time of this writing. However, I agree that a suite of marine solutions could be enough to fill the gap (and more on that below) however, projecting into the future is a challenge.

Fundamental research now in mCDR would set the stage for significant deliveries to take place in the year 2030 - particularly for Ocean Alkalinity Enhancement, or macroalgae sinking. BCG suggests a 100Mt in 2050 figure across all ocean methods, rather than offer a 2030 estimate.

Biomass burial and storage is also just now starting to gain a foothold, with over 180,000 tons sold and over 3,000 tons delivered at the time of this writing per CDR.FYI. This solution is scaling rapidly. Assuming that 75% of the 180k tons sold to date are delivered in 2024, and this grows at the same rate as biochar 3.6x every two years (yes, a big IF), then burial solutions would contribute 3M in 2030. 

2. Keep pushing to outpace the estimate of the four methods that I included above (BECCS, DAC, Biochar, and ERW). Growing any field of carbon removal is not inevitable, but rather the result of people researching, deploying, and learning how to efficiently advance the practice of removing excess atmospheric greenhouse gas. The ability to advance faster than forecasts is not fanciful - but happening for key climate technologies already. 

It is my belief that carbon removal can model the systemic adaptations present in these industries - innovations in financing, policy advancements, improved social license to operate through awareness and endorsement - leading to deployment and expansion beyond linear estimates. 

In other words, we can close the carbon removal gap - and despite the many challenges that carbon removal faces, that can happen sooner than anyone thinks today.

Opinions expressed here are the author’s own and do not represent the position of any employer.

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“History Doesn't Repeat Itself, but It Often Rhymes” – Mark Twain

So I’m going to let you in on an open professional secret: I’ve not always been working in climate! Most of my professional experience prior to 2019 was in biopharmaceuticals and healthcare. So 20+ years of lessons from my previous experiences shape how some of my thinking about problems that face early stage companies across the sectors of carbon removal. 

While flying back from a marine CDR (mCDR) conference in my native city of Boston - literally drafting this at 37,000 feet - I came away impressed by the vast potential for mCDR to restore the climate to greenhouse gas equilibrium. But it struck me that many unique features of mCDR hinder a viable product development lifecycle model - moreso than other methods of CDR - which could jeopardize many promising startups in this space. 

With that in mind, my 20+ years in biopharma business came rushing back as a potential analog to think about mCDR; per the Mark Twain quote above, history doesn’t repeat itself, but in the case of mCDR it might rhyme enough with biopharma to provide insights to solutions. To that end, I’m going to make the case that several specific traits of marine CDR make the lessons of pharmaceuticals relevant to developing impactful startups in that method.

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First, some similarities between biopharma and marine carbon removal

• High upfront expenses to unwind technical risks: First off, research in both ocean systems and human physiology involve working to understand the fundamentals of extremely complicated systems and how interventions might operate. Furthermore research in each of these endeavors is anything but cheap: Remote operated vehicles or autonomous underwater vehicle operations are quite expensive, to say nothing of costly time spent on a scientific research vessel. Similarly, in biopharma, it is not uncommon for startups to spend several hundred million dollars annually without any commercial revenue, contracting with clinical research organizations with worldwide reach to conduct trials of experimental human therapeutics.

This graph of a pharmaceutical product lifecycle sums it up well:

Both pharma and mCDR are highly risky, where underlying scientific principles are still unknown for solutions that are undergoing field testing outside of a laboratory setting. In biopharma, this leads to the hallmark long development timelines of most biopharma development - usually 7 to 10 years (or longer!) of clinical trials until FDA approval for commercialization.  The development pathways of field testing and clinical trials are necessary to unwind those technical risks, offering a pathway to scaling once the smaller scale tests are completed.

• High sales volume potential Projections for marine carbon removal startups depend very heavily on the scale of CO2 removal possible through oceans. Marine CDR proponents tout that 70% of the surface area of the planet are covered by oceans, to the potential to use that vast resource, suggesting a sizable potential to create carbon removal credits. Achieving more than $1B per year globally (‘blockbuster drug’ status) is the goal of many clinical development programs, with a payout over the life of the drug to recoup the operational expense of the development program. 

• Closely regulated pathways: Both industries have a VERY highly regulated pathway with important government gatekeepers holding authority over the ability to move forward with testing, development, and commercialization.  The US Food and Drug Administration watches over clinical trials and provides the license to commercialize. In mCDR, interventions under development require approval from multiple regulatory agencies, which leads to a dizzying array of government bodies to navigate:

• Commercial registration hurdle: Submitting data to a carbon credit registry carries the same gatekeeping function weight for registering a pharmaceutical product.1 As one who worked in clinical data management, the need for high data quality in mCDR - really across all CDR - is a key aspect of this. Note too that FDA can take 6 to 10 months to approve a drug, assuming the testing data package is complete; mCDR companies applying to registries often experience similar timelines when applying for their projects to achieve approval. Key difference: FDA and EMEA in Europe are government entities; leading registries for carbon removal credits are private organizations.

Important differences - not an exhaustive list, but important for the next steps

• Market maturity: The biopharma sales representatives’ pathways to doctors offices are well-worn, and marketing channels are extremely well developed. Also, distribution through a retail or specialty pharmacy provides a way for the product to arrive to the user. To be fair, none of this exists in marine carbon removal - and in carbon removal at large. Sales and delivery are bespoke arrangements, while buyers of the credits are highly coveted in a market that approaches a state of monopsony2

• Customer stakeholders for getting product to market : Pharma features three different stakeholder comprise the decisionmakers for drugs: the user (i.e. the patient), the prescriber (licensed medical professional), and the insurance payer (private insurance, or government). For carbon removal credits, the user, payer, and gatekeeping decisionmaker are the same organization, with a Chief Sustainability Officer, Chief Financial Officer, and CEO among the people within the purchasing company who jockey over which carbon intervention to employ.

• Project deployment is different - mCDR would launch its carbon removal credit generating activities project-by-project, whereas regulatory approval in biopharma means a company can market and sell a standardized product nationwide.

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Pathways forward

With this in mind, mCDR companies and those who support them can consider the following ideas as methods to get to market more quickly:

• Compliance markets to support mCDR development. The path of an IPO for a precommercial biotech company is well known, because the market is well known and large ($1.48 T in 2023). In contrast, Marine CDR is sold on a voluntary carbon market which in 2023 was $723 million, while compliance markets for carbon credits nearly reached $1T in value. I’m not suggesting that mCDR companies pursue IPOs to fund research; rather, that solid compliance markets would offer a backstop for securing growth capital, project financing, or debt financing - all of which seek the certainty from compliance customers’ high volume of marine CDR credit demand. Policy advocates can focus on jurisdictions where compliance markets exist or are likely to exist in the future, to provide a market to unlock marine carbon removal. Any signal for a compliance market to accept a marine CDR protocol would represent a major step forward to offering a market commitment.

• The AMC option.  In the absence of such a compliance signal, an Advanced Market Commitment specifically for marine carbon removal would be a fund vehicle that could provide a guarantee of a market for marine CDR, in similar fashion to how an AMC worked with vaccines. Countries which already have significant interest in marine climate solutions (e.g. Japan) might be leaders in this effort.

• Beyond Value Chain Mitigation. Private companies wishing to support mCDR could look to the Beyond Value Chain Mitigation guidance as well, which cites R&D funding as a potential outlet for carbon removal spend. A contribution model could pool resources that would offer a gateway for marine carbon removal, as the funds could be used for R&D or commercialization at scale. 

Oceans have such vast potential to heal the planet, and to fulfill that promise a new model is needed for funding new ventures. Biotechnology could be a useful analog, where publicly traded private companies execute on long, expensive research timelines - with the caveat that market need and sales channels for a pharmaceutical are extremely well defined. 

Readers, what do you think? Feel free to comment here:

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Opinions in this post are the author’s own, and do not represent the position of any employer.

I like jam. It’s delicious and an excellent complement to peanut butter. Plus, since strawberries and blueberries in jam are fruits, it counts as one of the four food groups, amirite?

But…being ‘jammed up’ is not good - which could describe Voluntary markets for carbon removal credits at the moment: many suppliers are stuck with a challenging value proposition for the price, technical risk, and difficulties branching out from a limited set of initial buyers for offsets - which is how carbon removal credits are classified per the Oxford Offsetting Principles.

That’s why I’m considering insetting here - as opposed to offsetting - and how that practice provides a way out of said jam. Many carbon removal suppliers are not as familiar with how that process works; for that audience, I am offering a some thoughts on a definition of insetting, why it merits consideration as a path forward, and reasons to pursue sooner rather than later.  

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What is insetting and how is that different from offsetting?

First, the working definition of insetting I’ll use here refers to a company - usually a larger one - bringing a carbon removing activity into its own supply chain (i.e. setting it in) rather than contracting with an external supplier to purchase carbon removal credits as an offset to emissions. For insetting, the company brings these activities in-house and then accounts for them in their own emissions reporting. For those who want to dive in further, here’s a link to a Beginners Guide to Insetting by the 3Degrees consultancy, and an excellent post by the always brilliant Peter Olivier.  

Two paths for an insetter to account for the activity: coupled to the supply chain of a particular product, or decoupled and attributed to general company operations - sharing this 2x2 matrix by Tristan Springer at CarbonPilot (thanks for letting me share!). We’ll get to the accredited vs nonaccredited distinctions (and MRV) further below.

For coupled activities, here are some examples of insetting for specific industrial processes:

Agricultural supply chain integration seems a step that would unleash the climate impact of this method of storing carbon and enable an insetting company to improve its bottom line. While the carbon removal potential of biochar or spreading rock dust are widely studied, farmers who already use industrial fertilizers are reluctant to adopt these practices - to the point that the glut of the physical biochar is a major problem for biochar producers. A large agricultural company could use biochar or enhanced rock weathering application as not just a soil additive but a fertilizer sparing material (NOTE: not wholesale substituting). Large growers with Scope 3 emissions targets - particularly arid regions where water is most crucial – could inset biochar to a supply chain, which would spare water and . First target could be high value crops – apples, blueberries, strawberries (all of which make excellent jam…)  

Uncoupled products can have an impact on a corporate value chain as well. As US Biochar Initiative Program Director Myles Gray indicated in a recent Nori “Carbon Removal Newsroom” podcast, “decoupled biochar that is physical biochar sold without its carbon credit, which is the norm, can be considered a “zero carbon” product in value chain emissions counting frameworks. Because you’ve already counted all of the emissions from it - you’ve sold off the negative attributes, that is the removal attributes - and you’re left with zero.”

In building materials, concrete and asphalt production are prime candidates. Many, many, (many!) view insetting in concrete production as a method for achieving Net Zero in the supply chain for concrete deliveries. Adding CO2 from DAC, or biochar, to concrete would be a way of doing so, leaving the concrete purchaser to buy both a carbon credit and the physical product itself. To say nothing of the work that Carbon Upcycling Technologies has done to pioneer consumer products; the real estate industry could also have an interest insetting as part of emissions related to the build environment.

What about MRV?1 The Monitoring Reporting and Verification burden would fall on the insetter to track, leading to a situation where that entity would be both the carbon remover and reporter of the results - creating a problem of misaligned incentives. The insetter could use external consultant would analyze the activities and account for the carbon removal - with verifiers and auditors to that process - creating credible reporting in ESG statements that cover Scope 3 emissions.

Registries can use insetting to their advantage.  Though most registries at the time of this writing only consider offsets rather than insets, the opportunity to track insets for reporting offers another service to a company removing atmospheric greenhouse gas. Verra is starting to look into this, but it’s early days still. This means that a registry that creates mirror protocols for insetting and offsetting activities would be able to create additional volume of credits sold. 

And opportunity abounds: if an insetter uses a registry for insetting and removes a surplus CO2 that covers their own targets, the extra quantity of CO2 removed could become an offset to sell. Noteworthy that per the International Biochar Initiative/US Biochar Initiative 2023 market report, about half of biochar activities are not registered for carbon credits, suggesting that unregistered carbon removal is already happening without being tracked (insert tree-falling-in-forest riddle here).

What about financial additionality? Pure insetting gets around this challenge since it is the activity of removing tons that would get validated and thus marked on the insetter’s value chain emissions. without having to go through obtaining . If a company emits 1,000 tons and removes 200 of them through an internal project, additionality is implied: if not for the company’s desire to integrate into operations, they would not have done so. The activity happened! There’s 200 less tons of CO2 floating around!  

What does this mean for those developing CDR solutions? Put simply, it’s a way around sometimes-skittish Voluntary Carbon Markets, provides opportunity to deploy technologies in a smoother fashion. An insetting company with a more robust balance sheet than a CDR startup has the ability to procure capital more easily than a startup would that is pursuing offsetting credits. The trick is to get an insetter to buy in to the tech solution itself, assuming that it has a place in their supply chain.  

In our AirMiners events, we have explored a wide range of MRV solutions over the last 18 months, many of which can be adapted to insetting. A global brand keen to undertake insetting for reduced cost purposes could employ any of the MRV approaches discussed there so that they could improve their bottom line – even without selling carbon credits. 

Why now? In a world where the benefits of carbon removal might be unclear to sustainability officers relative to historical avoidance offsets, or renewable energy offsets, insetting offers a path forward. (Example CFO and Chief Sustainability Officer conversation: “Yeah I hear you about our company’s Net Zero target, but a ton is a ton is a ton dammit – why are we going to buy a ton at $300 when we can get the same for $3??”) Insetting offers a way around that objection by offering value in a more profound way to executives at organizations who are mindful of their shareholders, board concerns, and CEO desires to make their companies (and jobs) financially viable. 

To the above concern, if an insetting project offers value to the insetter greater than its cost of creating (CAPEX) and operating (OPEX) – or otherwise finds a way to clear internal hurdle rates for capital and operational spend –that could get greenlighted. For coupled insetting that makes product manufacturing better/faster/cheaper, the conversation becomes easier for a Chief Operations Officer - in addition to a Sustainability executive - to get on board as well rather than viewing the carbon removal activity as an expense only. 

This would be true for a company with an internal carbon tax that offers a source of funding for these types of operations; there is also Beyond Value Chain Mitigation potential here - more on that in a later post.

In the end, insetting offers an opportunity for scaling carbon removal as a pathway remove the first billion tons of CO2 from the atmosphere – sooner than any might think possible. The climate and financial benefits suggest that it is a so far unheralded option that deserves more attention so that companies supplying carbon removal project solutions to insetters can survive a sometimes rocky Voluntary Carbon Market.

Then we can all afford to buy more yummy jam! 

Onwards!

-Jason

PS: Thank you to Tristan Springer at CarbonPilot for guidance on insetting for this post.

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Views expressed in this writing are my own and do not represent the position of any employer.

Let me know your thoughts on this post below! Since it is early days for the ‘Climagination’ Substack, any and all comments are welcome - content, formatting, style - it’s all fair game in service of the readership.

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