For small to medium-sized buyers in today’s voluntary carbon market (VCM), purchasing carbon dioxide removal (CDR) credits poses a series of challenges – from limited supply and high prices to lack of clarity in the policy landscape. Luckily, opportunities for small buyers are multiplying as CDR technologies mature due to increased market participation. Companies can overcome many of the challenges facing the CDR market by building a diversified portfolio of nature-based and engineered removals alongside avoidance credits.

The obstacles and pathways to success for small buyers can often be illustrated by the experiences of the biggest participants in today’s CDR carbon credits market. Companies like Microsoft, Google, Frontier, JPMorgan and Stripe, to name a few, have all made major CDR investments in recent years. In fact, CDR demand is highly concentrated. In 2024, over 75% of durable CDR (dCDR) purchases came from Microsoft, Google and the Frontier buyers’ consortium alone.

In this post, we will explore the challenges and opportunities small-to-medium sized CDR buyers face through the lens of these large-scale market participants. We will dive into what these big corporates have to say about the market and the strategies they employ to avoid many of its pitfalls. 

As with any carbon credit purchase, wading into the removals market can require additional due diligence and careful planning. We will also discuss what makes a high-quality CDR credit. Independent due diligence and partnerships with organizations like carbon credit ratings agencies can help make buying high integrity carbon removals credits faster and easier.

How corporate investments are affecting the CDR market

Corporate CDR purchases have surged in recent years:

• Microsoft, currently the world’s largest buyer of CDR carbon credits, increased its removal investments five-fold in 2023 compared to 2022 and plans to procure five million tonnes of removals per year by 2030.
• Google made $100 million in CDR forward purchase agreements in 2024, roughly tripling its CDR purchases in one year.
• As of April 2025, Frontier, a coalition of tech companies Stripe, Alphabet, Meta and Shopify, had already contracted $550 million in CDR carbon credits, equating to ~1.43 million tonnes of carbon removals.

These ambitious investments may not have an immediate impact on small sustainability teams, but they could, in the long-term, de-risk removals technologies through increased market maturity and credibility. 

Technology-level considerations

Market maturity varies from technology to technology. Over 93% of all durable CDR purchases in Q1 2025 were carbon credits from biochar (BCR), as it is an older technology that has existed for many years. This is followed by technologies that involve other bio-mass based removals (BiCRS). All other project types made up only 1% of purchases.

It is, and will likely remain, essential to perform additional due diligence when purchasing CDR credits to understand quality and learn which project types are available and at what price per quality. Additionally, our analysis has found that removals are not necessarily always higher integrity than avoidance credits.

Challenges in scaling the carbon removal market

Supply constraints and cost

Despite the gaining momentum of large-scale CDR purchases, constrained supply and high prices remain bottlenecks for buyers. The 2023 State of CDR report estimated that technologies such as bioenergy with carbon capture and storage (BECCS), BCR, enhanced rock weathering (ERW) and direct air capture (DAC) will have to grow by a factor of 1,300 on average by 2050 to meet the Paris Agreement goal to keep warming below 1.5 degrees celsius above pre-industrial levels.  While prices dropped from $490 in 2023, CDR.fyi reports the average weighted price of a dCDR credit remained $320 per tonne at year end 2024, outside the reach of many small to medium-sized buyers.

Large buyers openly acknowledge these challenges in the market while continuing to invest in the future. In May 2023, JP Morgan Chase signed $200 million in long-term durable CDR offtake agreements. They also cited the lack of quality supply, market integrity and market maturity as interrelated and significant barriers to an effective removals market.

Smaller buyers can prepare for limited availability and higher initial costs by considering a diversified portfolio approach that includes not just the more expensive engineered removals, but also nature-based removals and high-quality avoidance credits. In this way, buyers can positively impact the climate today rather than wait for dCDR credit prices to fall.

Fragmented standards and uncertain policy outlook

The removals market is marked by a web of quality guidelines and recommendations for how and when companies can use removals in their net zero journey. Guidance bodies’ standards fluctuate over time, making it difficult for even the largest sustainability teams to set long-term removals goals and targets in line with industry best practices.

This can prove especially problematic for small buyers, who do not have the resources to pivot their strategies or take on long-term regulatory risk. Guidance bodies that impact demand for CDR credits include the VCMI, SBTi and Oxford Principles, all of which have different roles and stances on the usage of CDR.

A VCM guidance body comparison

Science-Based Targets initiative (SBTi)

The 2025 Science-Based Targets initiative (SBTi) Corporate Net-Zero Standard (CNZS) consultation draft is a salient example of how a guidance body can set new standards that are meant to lend clarity but which may also cause confusion. 

The Corporate Net-Zero Standard guides companies on setting near-term, long-term and net-zero emissions targets. The previous standard, published in 2021, recognizes the need for CDR to neutralize residual emissions, but does not suggest companies use CDR credits before reaching their net-zero target. This shift could be a positive demand signal for the CDR market, but in the meantime, it demonstrates a lack of clarity that may dissuade participants from entering the market.

There are currently three options under SBTI’s CNZS for setting corporate interim targets:

1. Companies must set removal targets every five years for all Scope 1 emissions.
2. Setting CDR targets is optional. The SBTi recognizes voluntary emissions targets.
3. Residual emissions can be covered by exceeding reduction targets, using CDR or a mixture of both.

Each option provides different paths forward for companies setting or adjusting net zero targets today and for the market as a whole, making it difficult to know how much CDR to buy, when and for what purpose.

Voluntary Carbon Markets Integrity Initiative (VCMI)

VCMI’s Claims Code of Practice lays out how companies can credibly use carbon credits – including both avoidance and removal credits – to support public climate claims. It strongly emphasizes the “reduce first” principle, meaning companies must prioritize internal emission reductions before relying on credits. VCMI also sets conditions for claiming net-zero alignment, requiring rigorous disclosure, emission reductions and credit retirement practices. While it does not currently set specific CDR volume requirements, it does stress that any credits used must be of high quality and transparently applied.

Oxford Principles for Net Zero Aligned Offsetting

The Oxford Principles, first released in 2020 and since updated, provide guidance for how carbon offsetting should evolve to support credible net zero goals. They advocate for a phased approach that starts with using more avoidance credits today and, over time, shifting towards a larger percentage of carbon removals. The use of removals may have a focus on nature-based CDR to start, but the proportion should shift over time to longer-term (100+ year) storage. They recommend that companies clearly differentiate between offset types and their respective durability. The Principles introduced a widely used “removals hierarchy,” encouraging companies to first reduce emissions, then offset residuals with the most permanent removals available. Transparency about offset durability and a long-term commitment to high-integrity solutions are core to this framework.

Navigating which of these frameworks to follow and for what purpose can be difficult. Buyers who maintain a strong carbon credit strategy philosophy and goal may find it easier to navigate the shifts that guidance bodies are undergoing at this time. Some companies are opting to focus on developing their own approach to meeting climate goals and a defensible justification for the approach rather than following one of the guidance bodies. Regardless of the objectives you prioritize, having a north star to return to may help keep you centered in times of uncertainty.

How leaders are overcoming CDR market challenges

Early stage agreements and long-term offtake contracts

The lack of high-quality credits in the marketplace has driven many large buyers to invest in early stage projects and nascent technologies. Some are also signing long-term offtake agreements to provide a more predictable supply of CDR credits into the future.

Over time, these long-term contracts can help reduce carbon credit prices and help with project viability, but they also come with associated risks. Many engineered solutions require large capital expenditures into new infrastructure projects. For example, Microsoft recently signed a contract to purchase 3.69 million tonnes of removals over 12 years from a project planning to attach a BECCS system to an existing pulp and paper mill.

However, there is a risk that these projects will not deliver on their estimated removals, which is not present in spot purchases of removals credits. This is often called “delivery risk” and requires special due diligence above and beyond the assessments needed for spot purchases.

The primary benefit and opportunity of these off-take agreements for smaller buyers is the possibility of lower prices and more supply. That said, one should consider the cost of the extra diligence, the risks of under-delivery, and the current shifting landscape with regard to acceptability on varying levels of quality.

Hybrid portfolio approach

Leading buyers are blending nature-based and engineered removals. This approach is in large part due to their dual goals of maximizing climate impact now while investing in scalable gigaton-level removals for the future. In a 2024 blog post on their efforts to support carbon removal, Meta stated they follow a “diverse portfolio of technological and nature-based carbon removal projects,” with the logic being that “each project type offers different pathways to impact at scale, on both immediate and longer-term timelines.”

Shopify follows a similar, but structurally distinct approach. The tech giant’s Sustainability Fund is split into the Frontier Portfolio (supporting long-term, permanent removals) and the Evergreen Portfolio (supporting nature-based and renewable energy projects). A quote from Shopify’s Head of Sustainability, Stacy Kauk, encapsulates their overarching logic: “No solution will single-handedly solve this problem.”

Image source: https://www.shopify.com/news/going-all-in-to-get-carbon-out-shopify-s-commitment-to-climate-entrepreneurs-reaches-32m

Finally, Google’s removals strategy has evolved over time from dCDR only to a blend of nature-based and more innovative solutions. In 2022, Google pledged $200 million to Frontier, an advanced market commitment consortium, focusing solely on dCDR technologies. In 2024, Google began to embrace nature-based solutions as well and co-founded the Symbiosis Coalition, which pledged to contract up to 20 million tons of nature-based removal credits by 2030. Today, Google has gone even further, taking on hard-to-abate super-pollutants like hydrofluorocarbons and methane.

Smaller sustainability teams can also develop balanced, diversified portfolios to spread the risks and benefits of engineered and nature-based solutions effectively. Companies like CNaught provide buyers with blended portfolios off the shelf to do this easily. Additionally, as mentioned above, removals credits do not inherently have higher greenhouse gas (GHG) integrity than avoidance credits.

Just as engineered and nature-based solutions can be blended to mitigate price and spread impact over time, a hybrid portfolio of avoidance and removals credits can result in high climate impact at lower prices than removals-only strategies. Ultimately, some big buyers may invest heavily in existing and nascent solutions, but a blended portfolio can sometimes save smaller buyers money while still providing high-integrity impact. 

Ensuring quality and integrity in your carbon removals investments

GHG Integrity

Regardless of whether you are buying reductions or removals, the same principles of carbon credit quality and integrity apply. According to the ICVCM Core Carbon Principles, four measures define the GHG integrity of carbon credits.

• Additionality: The GHG emission reductions or removals from the mitigation activity shall be additional (i.e., they would not have occurred in the absence of the incentive created by carbon credit revenues).
• Permanence: The GHG emission reductions or removals from the mitigation activity shall be permanent, or, where there is a risk of reversal, measures shall be in place to address those risks and compensate for reversals.
• Robust quantification of emission reductions and removals: The GHG emission reductions or removals from the mitigation activity shall be robustly quantified based on conservative approaches, completeness and scientific methods.
• No double counting: The GHG emission reductions or removals from the mitigation activity shall not be double counted (i.e., they shall only be counted once towards achieving mitigation targets or goals). Double counting covers double issuance, double claiming and double use.

SDG impact

For some buyers, the climate impact is the most important characteristic of the credits they buy. Others also prioritize carbon credit co-benefits. Removals can have a meaningful impact on sustainable development goals (SDGs). Removal project types that provide high SDG impact include blue carbon, reforestation, agroforestry & plantation and grassland conservation & reforestation projects.

Image source: https://unosd.un.org/content/sustainable-development-goals-sdgs

Although durable engineered solutions often do not report SDG contributions, they have potential for SDG impact as well through technological development (SDG 9), the creation of green jobs (SDG 8) and the enhancement of climate resilience (SDG 13).

Environmental and social risk

Finally, like all carbon projects, CDR projects are also susceptible to environmental and social risk (ESR). Ensuring high quality of a credit requires evaluating if adequate safeguards and management measures are in place to prevent harm to people and the environment in which the project operates.

In CDR projects for instance, it is important to assess whether an environmental impact evaluation has been conducted, whether safety measures have been implemented for both those operating the technologies and the neighboring communities, or if the project is ensuring transparency and genuine engagement with those potentially affected by the project (on their health, safety or livelihood). Each project is unique, and these assessments must be made on a case-by-case basis as risks and contexts can vary significantly.

Whether it is SDG impact, ESR or something else, each company comes to the carbon credit purchasing process with their own goals and priorities. Regardless, particularly if credits are being used for offsetting, robust GHG quantification is key. Carbon credit ratings agencies can make great partners in evaluating which carbon credits best match a company’s goals. The Calyx Global Platform includes ratings, assessments and screenings for GHG integrity, SDG and ESR considerations.

Getting started in CDR

With the current concentration on the demand side of the CDR market, it can be helpful to listen and learn from the experiences of the biggest buyers in the industry. These buyers tend to be multinational corporations, often in the finance, energy and tech sectors. Smaller companies might not see themselves reflected at scale in the market yet, but understanding the challenges that currently exist and how some are tackling them can be helpful to taking next steps.

For many, those steps may include reaching out to a trusted partner that can amplify the resources of small sustainability teams, making high-integrity carbon removals purchases easier and faster. Independent due diligence from carbon credits ratings agencies like Calyx Global can give companies access to the removals market by helping them build diversified portfolios that avoid the risk of long-term contracts and offtake agreements. To learn more about the current state of carbon removals, sign up for our upcoming webinar on what’s real, what’s hype and what’s available in the carbon removals market.