Three main carbon removal technology approaches – biochar, direct air capture, and BECCS – dominate the growing market for atmospheric CO2 removal.
Record-breaking sales of carbon dioxide removal credits hit new highs in 2024, as businesses rush to purchase these environmental credits to reduce their carbon footprints. These credits represent real carbon dioxide that has been pulled out of the atmosphere and stored away, helping companies offset emissions they can’t eliminate from their operations.
Three main carbon removal technology approaches are leading this growing market: biochar, direct air capture, and bioenergy with carbon capture and storage. Each works differently, but serves the same goal: removing carbon dioxide from the air to slow climate change.
Biochar offers the most cost-effective option for companies seeking to purchase carbon credits. This carbon removal technology burns plant material, such as wood chips or crop waste, in a controlled process called pyrolysis, which traps the carbon dioxide that plants absorbed while growing. The resulting charcoal-like material can improve soil quality for farmers while keeping carbon out of the atmosphere.
Companies like Exomad Green, Varaha, and Carboneers are already selling biochar credits on a large scale. The credits cost less than other carbon removal methods because biochar provides additional benefits beyond carbon storage. Farmers can utilize biochar to enhance the productivity of their soil and reduce their reliance on fertilizers.
However, biochar has some limitations that worry buyers. Scientists debate how long carbon remains locked away in soil, and questions remain about whether these projects would occur without carbon credit sales. The carbon removal technology also faces challenges in scaling up to remove massive amounts of carbon dioxide.
Direct air capture (DAC) represents the most high-tech approach to pulling carbon dioxide from the atmosphere. These facilities use specialized equipment and chemical processes to grab carbon dioxide directly from regular air, then pump it deep underground where it stays trapped for thousands of years.
This carbon removal technology produces highly trustworthy carbon credits because the process is easy to measure and verify. Companies can feel confident they’re getting real carbon removal when they buy these credits. Major players include 1PointFive, Climeworks, Heirloom, and Carbon Engineering.
The downside is cost. Direct air capture requires enormous amounts of energy to run, making these credits extremely expensive. Some direct air capture credits sell for more than $1,000 per ton of carbon dioxide removed – roughly 10 times more than biochar credits.
Two different technical approaches dominate this carbon removal technology market. Companies like 1PointFive and Carbon Engineering use liquid chemicals to capture carbon dioxide. Meanwhile, Climeworks and Heirloom rely on solid materials that soak up carbon dioxide like a sponge.
The future of direct air carbon capture technology faces uncertainty. These facilities require massive amounts of electricity, putting them in competition with data centers for clean energy sources, and some have struggled to meet expectations regarding the amount of carbon they actually remove. Political changes could also affect government support for these technologies, especially with questions about climate policy priorities under the Trump administration.
Bioenergy with carbon capture and storage, known as BECCS, captures carbon dioxide from industrial processes that burn plant materials. Ethanol plants and biomass power stations are common sources. Since these facilities already produce concentrated carbon dioxide in their smokestacks, capturing it costs less than pulling it from regular air.
This carbon removal technology provides the same long-term carbon storage as direct air capture but at lower prices. BECCS currently removes more carbon dioxide than any other engineered approach.
Microsoft made headlines in April 2025 by signing the largest carbon removal deal in history – a $800 million purchase of roughly 7 million tons of BECCS credits from AtmosClear. This massive deal signals a growing corporate appetite for carbon removal credits.
Government support is building for BECCS projects. The United States, Denmark, and Sweden already provide significant financial backing for these technologies.
Beyond these three main approaches, other carbon removal technology options range from planting trees to using ocean-based technologies. Some experimental approaches involve adding minerals to seawater or sinking seaweed to store carbon in the deep ocean.
Scientists estimate the world needs to remove more than 1 billion tons of carbon dioxide annually by 2050 to meet climate goals. This target far exceeds what natural forests and other carbon sinks can handle alone.
The carbon credit market reflects growing recognition that reducing emissions isn’t enough – actively removing carbon dioxide from the atmosphere has become necessary to prevent dangerous climate change. Companies buy these credits to address emissions they can’t eliminate from their supply chains, often called Scope 3 emissions.
Many buyers purchase credits from multiple carbon removal technology approaches rather than relying on just one method. This strategy spreads risk across different technologies, each with unique strengths and weaknesses.
Industry experts expect carbon removal credits to eventually integrate into mandatory carbon markets like the European Union Emissions Trading System after 2030. This shift would create much larger demand and potentially drive down costs through increased scale.
For ordinary consumers, the growth of carbon removal technology could eventually affect everything from energy prices to food costs. As these technologies scale up, they may compete for the same renewable energy sources that power homes and businesses.
The success of carbon removal technology depends on continued investment from both private companies and governments. Without sustained support, these small but growing industries may struggle to achieve the massive scale needed to make a meaningful dent in global carbon dioxide levels.
