CDR at 'The Chasm' - Part 1 of 2
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.
“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!
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.
Disclosure: I was a voluntary contributor to that effort
Corroborated by Andre Sobolewski here: Stockholm Exergi had experience with carbon capture per se prior to developing BECCS projects whose credits Microsoft purchased.
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!