Is the CDR market on track?

The durable carbon removal market is growing quickly, but what would it take to reach needed levels by midcentury?

Yesterday we launched the 2023 Year in Review at CDR.fyi, analyzing the market for CDR. I wrote a special analysis looking at whether we are trending on track or not.

We have seen a consistent growth of the CDR market, with the volume of purchases growing at least 5x three years in a row. A 4-500% annual growth is not unusual for a nascent sector but is not likely to continue for many years. How fast would durable CDR need to grow for us to meet midcentury needs?

This question is more complex than often recognized. The often quoted IPCC models include 6-10 gigatonnes (Gt) of CDR in the second half of this century. But this number is a mix of what is needed to reach net zero and halt warming, and what would be needed to bring temperatures back down to 1.5C after we have achieved net zero. It also mixes durable CDR and carbon stored in forests. Only durable CDR can neutralize ongoing fossil emissions to halt warming, reaching net zero CO₂. To offset other greenhouse gases, land-use change, and historic emissions, more short-lived removals could be used. It is theoretically possible to reduce CO₂ emissions to zero in all sectors; practically speaking, however, durable carbon removal is likely to be the most cost-effective and feasible option for reaching net zero for certain hard-to-abate sectors, such as aviation.

Thus, the scale needed for durable CDR at net zero by midcentury hinges on determining where it is the optimal choice, which remains uncertain with the limited analyses completed to date. The CDR.fyi CDR Calculator, aligning with SBTi pathways, models about 4 Gt of durable CDR by 2050, equating to approximately 10% of total annual CO₂ emissions today.

Are we on track to reach 4 Gt per year of durable CDR by 2050? Recent research led by Greg Nemet highlighted that we are in a formative phase for durable CDR where deployments in the next 10-15 years will determine if durable CDR will be available in the quantities needed.

Studying the scale-up of other technologies, the Nemet study suggests that at least around 3 Gt of CO2 need to be cumulatively removed between 2020 to 2040 for annual CDR capacity to be able to reach 4-5 Gt removals annually in the 2050s. 3 Gt in cumulative removals by 2040 could be reached with many different growth trajectories. What we feel confident saying is that if novel CDR has not reached tens of millions of tonnes removed per year by 2030 we will be far behind.

Current growth rates in purchases and deliveries put us well on track for reaching this - if we maintain them. Of course, the growth would grind to a halt without the number of big buyers increasing every year. Currently, there are only 6 buyers that purchased over 100,000 tonnes and 14 others that bought at least 10,000 tonnes. If we have a few hundred additional such buyers entering the market in the coming years we would feel a lot more confident about our collective ability to stay on track to meet durable CDR targets.

Read the whole year in review here to get a deep-dive into how the market has developed: https://www.cdr.fyi/blog/2023-year-in-review