2024 Q1 Durable CDR Market Update - Blossoming Biochar

Highlights

• Maintaining Momentum?: Q1 2024 sales of 531K tonnes were 14.8x of what they were in Q1 2023 and 1.2x of Q1 2022, but marked the third consecutive quarter of declining sales.
• The Biochar Quarter: Biochar led the durable CDR market in Q1, driven by large deals from Global South companies like The Next 150 and Exomad Green. It accounted for 81% of total sales and 91% of deliveries.
• Microsoft Leading the Way: Microsoft continued its undisputed lead purchaser role in CDR, including the largest biochar deal in history. Software and services, together with other high-margin sectors professional services and banking, represented over 90% of CDR purchases in Q1.
• Geographical Expansion: The market footprint expanded with Bolivia, Mexico, and Brazil joining Switzerland and the US to account for 72% of total sales collectively. Global South suppliers contributed 57% of Q1 sales volume, portending a potential shift in geographic dynamics and increasing diversity of supply.
• Concerns Over Market Transparency: The increasing trend towards non-disclosure in transaction details poses challenges to the market trust and transparency essential to grow the market.

Executive Summary

The durable CDR market remains nascent and highly dependent on large transactions. The overall trend is positive but has not yet achieved a solid foundation. Each quarter brings its own developments and surprises, underscoring the challenge of making long-term predictions based solely on short-term data.

The key to sustained growth in the CDR market lies in attracting more buyers and encouraging existing ones to increase their investments. Durable CDR is a market led by forward-thinking companies and executives who proactively invest without any legal or regulatory requirement.

This quarter, Biochar was the clear method leader, led by two large transactions from Global South companies: The Next 150 and Exomad Green. As in 2023, when it accounted for 67% of all durable CDR purchases, Microsoft was in a league of its own as a purchaser in Q1 2023, followed by Karbon-X, Shell Environmental Products, and BCG.

An increasingly concerning issue is the trend towards opaqueness in market transactions. Transparency is essential to building trust in the market, and trust is the foundation of relationships, increased business, and, thus, increased carbon removal. Transparency includes clear and robust measurement, reporting, and verification (MRV) and sharing progress with the community. Achieving multiple gigatonne output of CDR will take a village; let’s celebrate the progress and encourage the ongoing efforts of well-intentioned parties to advance CDR technologies.

Market Results

Sales

Q1 sales of 531K tonnes were 14.8x those of the same period a year ago. While that seems impressive at first glance, look back a bit further and it’s only 1.2x that of Q1 2022. Furthermore, it marks the third consecutive quarter of declining sales.

Biochar led all methods in Q1, claiming 81% of total sales and 91% of deliveries. With new studies showing biochar’s permanence being much longer than previously thought, one of the lowest prices per tonne of CDR methods, and a short purchase-to-delivery cycle, will biochar continue to dominate future quarters?

Suppliers

The Q1 2024 supplier leaderboard reflects the aforementioned influence of biochar, headlined by Exomad Green and The Next 150. Promisingly, it was the first-ever CDR sale for two of the top ten suppliers.

14% of transactions did not disclose the supplier. While that figure is not unusually high, we will revisit the implications of non-disclosure as we analyze purchaser trends in subsequent sections.

Purchasers

The Q1 2024 purchaser leaderboard showcased some familiar and emerging players making substantial contributions to the CDR market. Leading the pack, Microsoft reaffirmed its commitment to CDR with its six-year deal with The Next 150, representing the largest biochar transaction in history. As mentioned, Microsoft is in a class of its own among CDR purchasers, accounting for 67% of all durable CDR purchases in 2023.

Other notable climate leaders, such as BCG, JP Morgan Chase, and Swiss Re, continue to make significant contributions. The entry of new players, such as Karbon-X and Shell Environmental Products, is also encouraging. Just as revenue diversification is important in business growth, purchaser diversification is necessary for CDR market growth.

Deliveries

86K tonnes of durable CDR were delivered in Q1, with biochar accounting for 91% of the total. This significant concentration in biochar deliveries underscores its current technological and market readiness and highlights its growing acceptance as a scalable solution of sufficiently high permanence for carbon dioxide removal.

Deliveries were led by Exomad Green, which also took the top place in overall Q1 volume sold. Established biochar producers with a history of delivering in prior quarters and years also figured prominently on the list.

Thank you for exploring our 2024 Q1 Durable CDR Market Update report. Please note, this blog post includes only the summary of the comprehensive edition exclusive to our Data Partners and Platform Subscribers. For access to the full report or further information, kindly contact us at team@cdr.fyi

2024 Q1 Durable CDR Market Update was written by Alex Rink, Tank Chen, Nadine Walsh, Katya Larina, Roden Sherpa, and Robert Höglund.

Data analysis by Katya Larina, Nadine Walsh, and Tank Chen.

Appendix & Data Considerations

CDR.fyi tracks 100+ year permanence carbon removal purchases & deliveries. Data are drawn from public and private disclosures. See Methodology, Considerations & Limitations for additional details on the approach. For any corrections or questions, contact team@cdr.fyi. For data licensing & partnership inquiries, contact partnerships@cdr.fyi.

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