What is carbon dioxide removal (CDR) and what types of credits are available?

The Voluntary Carbon Market (VCM) currently boasts over 1,200 carbon dioxide removal (CDR) projects that are in some stage of development. Nearly 350 projects have issued over 80 million credits, and over 40 million of those credits have yet to be retired. 

The different types of CDR

The VCM tends to distinguish two types of CDR: technology-based and nature-based.

Technology-based removals are often referred to as ‘durable CDR.’ These tech-based removals include geologically stored carbon such as direct air capture (DAC), biomass carbon removal and storage (BiCRS), terrestrial storage of biomass (e.g., underground burial of wood), biochar, and wooden building elements. Bioenergy with Carbon Capture and Storage (BECCS) is a subset of BiCRS and is under development at over 50 facilities, but it is unclear how many will contribute to the VCM. As a group, these project types claim that stored carbon will be kept out of the atmosphere for hundreds to thousands of years. 

Nature-based removals originate from activities such as afforestation and reforestation, agricultural land management, grassland management, wetland restoration (including ‘blue carbon’), and improved forest management. These project types deliver what are sometimes considered “impermanent removals” because carbon storage could theoretically be reversed at any time within or beyond the project's lifetime. Simply cutting down the trees or tilling the soil can result in CO2 being released back into the atmosphere. While biological storage is less “durable” than geological storage, projects often engage in mechanisms that reduce this risk. The credit issuer requires some projects to participate in and contribute to a kind of insurance mechanism (called a “buffer reserve”) used for reversal events. 

Often, nature-based projects invest in the people that surround the project area and directly share project benefits with communities to incentivize continued conservation activity. These elements of sustainable design can considerably reduce reversal risk while adding substantially to a project’s non-carbon benefits. 

What fraction of the CDR market is ‘durable’?

As of mid-2024, 17% of CDR projects (58 of 344) currently issuing credits in the major registries can be categorized as durable. Including projects in the pipeline (i.e., not yet issuing credits), the fraction of durable CDR projects declines to 8% (79 of 970) because nature-based removal projects are growing more rapidly. The volume of carbon credits produced by these project types tends to be smaller than the volumes produced by other types of removal projects. As such, the fraction of current carbon credit issuances from durable CDR is less than 1% of the total removals market. These statistics do not include bilateral deals between suppliers and purchasers that never enter the registries. Technology-based removals are currently a small fraction of the market and their share is not set to grow without more investment. 

Which technology-based removal types are delivering the most credits?

While direct air capture (DAC) gets a lot of attention, this nascent technology currently produces far fewer removals than processes that capture and store carbon concentrated in industrial gaseous waste streams. Only two projects are geologically storing carbon captured from either concentrated streams or the air. Together, these projects have produced 157,000 tons of carbon credits. Less than 200 of these carbon credits came from DAC facilities. 

The biggest producer of durable removals is biochar. In total, 38 biochar projects have issued 361,000 carbon credits. Projects designed around wooden building elements have issued 110,000 carbon credits (all retired). Four projects based on concrete and other carbonated materials have issued 75,000 carbon credits. Another 13 projects are under development, and one carbon-absorbing concrete project promises to deliver over 640,000 carbon credits per year. We include concrete projects here because the market at times considers them ‘removals and reductions.’ We note, however, that concrete projects may actually be delivering more emission reductions than new removals.  

To date, 721,000 carbon credits have been issued for durable CDR. Future production is estimated to be at least 1.3 million tons of carbon credits per year, mostly due to the growth in CO2-absorbing concrete projects[1].  

Are there any differences between carbon stored in trees and carbon stored in soil? 

Nature-based removals account for 83% of CDR projects and 99% of the volume of CDR issuances. They store carbon in vegetation and soil. Those carbon reservoirs differ in their risk profile due to the way they respond to human and natural disturbances. Soil carbon may be more resilient to natural disasters such as hurricanes or fires than carbon stored in trees. On the other hand, cessation of the improved practice that produces soil carbon storage results in a slow, inexorable loss of that previously accumulated carbon. By contrast, after tree-based ecosystems have been established, human neglect does not necessarily result in the immediate loss of previously accumulated carbon; carbon storage could continue (almost) indefinitely. One wildfire, however, may eliminate the stored carbon in a matter of days. Because the risks vary, it is worth separating these two types of biologically stored carbon projects. 

What types of projects store carbon in trees versus soils?

Afforestation and reforestation dominate nature-based removals available on the major registries by volume, and they store carbon primarily in trees. Over 60 million credits (94% of all tree-based issuances) have been issued by 121 afforestation and reforestation projects[2]. Improved forest management (IFM) projects in Mexico using the Climate Action Reserve’s protocol are the only IFM projects considered in the analysis because only removals (not avoided emissions) are credited[3]. IFM in Mexico has the greatest number of active projects (151 of the 286 nature-based removal projects currently issuing credits) but they have issued only 3.7 million carbon credits. The total number of tree-based removal projects (afforestation and reforestation plus IFM) could reach over 650 in the coming years, based on the number of projects currently listed in the major registries.

Soil-based CDR can occur under afforestation and reforestation projects, but soil carbon generally represents a small fraction of the total carbon credits claimed. Most of the carbon credits in afforestation and reforestation projects come from carbon stored in trees. The same is true for IFM projects. Soil organic carbon (SOC) removals occur in mature forests, but they represent a small fraction of the total pool of (newly) sequestered carbon. SOC is generally not included in IFM carbon credits, which typically focus on removals associated with tree growth and reduced emissions from avoided harvest. 

Soil-based removals occur primarily in agricultural land management and grassland management projects focusing on improvements to cultivation or grazing practices in croplands or grasslands. However, SOC is also a major fraction of removals in wetland restoration projects. These categories are not perfect. Agricultural land management projects may credit for emissions avoided by changing fertilizer management, and wetland restoration can result in an increase in carbon stored in aboveground biomass. To ease the discussion, these types are analyzed together here as soil-based CDR and compared with the (primarily) tree-based removals in afforestation and reforestation and in IFM projects in Mexico.  

Soil-based CDR accounts for only 5% of nature-based removal projects that are currently issuing carbon credits – six wetland restoration projects (including some ‘blue carbon’) and 8 agricultural or grassland management projects. This number is set to rise to over 25% (a total of 238 projects) should all projects in the pipeline become active. 

What is the track record of CDR methodologies?

Nature-based methodologies dominate the CDR category. Methodologies for afforestation and reforestation were developed in the early years of the Clean Development Mechanism (CDM), before methodologies for grassland and agricultural land management. Therefore, afforestation and reforestation projects have built a longer track record (some good and some bad). The market is still forming an opinion about the methodologies that support soil-based carbon sequestration. Some of the major methodologies for both tree-based and soil-based removal projects have recently been updated, suggesting improvements are still underway to define best practices for claiming removals from nature-based activities. Technology-based removal methodologies are still very new. Many have been released in the past year or two. 

What types of CDR projects does Calyx Global rate?

Currently, the Calyx Global platform includes ratings of over 600 carbon projects. Among these are ratings for 120 CDR projects representing over 84 million tCO2 of issuances. Project types represented include:

• Afforestation and reforestation
• Agricultural land management
• Biochar
• Blue carbon (wetland restoration)
• Grassland management
• Improved forest management

The distribution of removal-based GHG integrity ratings to date is provided below. The lack of A-ratings is notable. This is due to the high number of nature-based projects, which come with non-permanence risk.

As mentioned, CDR projects can also benefit local communities and ecosystems, particularly those that are nature-based. For instance, at Calyx Global we rate the certified Sustainable Development Goal (SDG) contributions of carbon credit projects.

Below is the distribution of Calyx Global CDR carbon credit SDG Ratings from highest (a rating of +5) to lowest (a rating of +1). The ratings in this chart are predominantly represented by forest and land-based projects. Other CDR project types can provide SDG benefits but often do not pursue certification. For example, DAC projects promote technological innovation for sustainable industrial development and can support the circular economy through the reuse of captured CO2, contributing to SDGs 9 (industry, innovation, and infrastructure) and 12 (responsible consumption and production). However, to date, durable CDR projects have not been certified for such benefits. 

Calyx Global Research on technology-based removals

Calyx Global has been following the development of new protocols to generate credits from technological removals. We have assessed a range of technology-based removal protocols (see chart below). 

Our research on “durable” removals has been driven, in part, by our support for Frontier Climate, including both the coalition and its individual members, as well as requests from other Calyx Global customers[4]. In the last year, we have seen increased interest in durable CDR.

Once credits are issued under these protocols, we will assess specific projects and provide ratings on the Calyx Global platform. We only rate credits fully verified and issued by carbon crediting programs that pass our initial screening. Technology-based removals that meet these criteria are only starting to emerge. We expect new ratings this year for a variety of new project types, such as concrete, bio-oil, and DAC. 

Are CDR carbon credits higher quality than avoidance credits?

Calyx Global’s research has shown that not all credits in a category are created equal. While some may view CDR credits as less risky than their avoidance counterparts, our analysis shows a broad range of quality in both project categories.

Sign up for our newsletter to stay current on our latest developments and analyses regarding carbon dioxide removal projects.

[1] These figures do not include future concrete projects which may produce up to 4.2 million tons because much of this may be classified as emission reductions rather than (additional) removals.

[2] Another 47 AR projects registered with Plan Vivo and Cercarbono have issued over 30 million credits.

[3] Note that almost 290 IFM projects exist outside of Mexico. The active projects have issued at least 37 million credits that represent some removals and some avoided emissions.

[4] Frontier is an advanced market commitment to purchase durable carbon removal, founded by Stripe, Alphabet, Shopify, Meta, McKinsey.