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.
Great post, looking forward to Part 2. I would've guessed that corporates like Microsoft would be in the Visionaries category, but your reasoning for putting them in the Pragmatists makes sense. If there were 7-8 million tons sold to Enthusiasts, Visionaries, and early Pragmatists last year, I wonder how much we can expand the VCM by fully tapping into the Pragmatist category? That'd still leave us far short of the 5-10 gigatons likely needed annually, and I fear there may be an even larger chasm after that, so let's just hope we have some robust compliance markets by then!
Hi Ryan, fair point about Microsoft being a Visionary - they purchased 2,000 CDR tons from Charm Industrial in 2020, and 1,400 from Climeworks in early 2021. I'd argue that their 2023-24 larger deals are where they show more Pragmatist preferences: Stockholm Exergi, Ørsted , OnePointFive, and Heirloom in particular.
For expanding the market to 5-10 gigatons, at least in the VCM, that's where the segments after Pragmatists - Conservatives and Laggards - fit in, which is beyond my analysis today. To be sure, those customer groups also behave differently but are possible, eventually.
In the 5-10 year time horizon, most (myself included) believe compliance markets are where the greatest volume of CDR transactions would occur, dwarfing the VCM. Voluntary markets are important to support the industry until compliance markets integrate CDR.
Great post, looking forward to Part 2. I would've guessed that corporates like Microsoft would be in the Visionaries category, but your reasoning for putting them in the Pragmatists makes sense. If there were 7-8 million tons sold to Enthusiasts, Visionaries, and early Pragmatists last year, I wonder how much we can expand the VCM by fully tapping into the Pragmatist category? That'd still leave us far short of the 5-10 gigatons likely needed annually, and I fear there may be an even larger chasm after that, so let's just hope we have some robust compliance markets by then!
Hi Ryan, fair point about Microsoft being a Visionary - they purchased 2,000 CDR tons from Charm Industrial in 2020, and 1,400 from Climeworks in early 2021. I'd argue that their 2023-24 larger deals are where they show more Pragmatist preferences: Stockholm Exergi, Ørsted , OnePointFive, and Heirloom in particular.
For expanding the market to 5-10 gigatons, at least in the VCM, that's where the segments after Pragmatists - Conservatives and Laggards - fit in, which is beyond my analysis today. To be sure, those customer groups also behave differently but are possible, eventually.
In the 5-10 year time horizon, most (myself included) believe compliance markets are where the greatest volume of CDR transactions would occur, dwarfing the VCM. Voluntary markets are important to support the industry until compliance markets integrate CDR.