Carbon Dioxide Removal Market Size, Share, and Trends 2024 to 2033

Carbon Dioxide Removal Market Size and Forecast

The global carbon dioxide removal market size was USD 638.73 million in 2023, calculated at USD 733.52 million in 2024 and is expected to reach around USD 2,548.29 million by 2033. The market is expanding at a solid CAGR of 14.84% over the forecast period 2024 to 2033. The rising awareness of reducing CO2 emissions across the world is driving the growth of the carbon dioxide removal market.

Carbon Dioxide Removal Market Key Takeaways

• North America led the carbon dioxide removal market with the largest share in 2023.
• Asia-Pacific is expected to attain the fastest rate of growth during the forecast period.
• By product, the direct air capture (DAC) segment led the market in 2023.
• By product, the enhanced/carbon mineralization segment is expected to be the fastest-growing segment during the forecast period.
• By application, the technology sector segment dominated the market in 2023.
• By application, the finance sector segment is expected to grow with the highest CAGR during the forecast period.

Market Overview

The carbon dioxide removal market has grown rapidly with the developments in the chemical domain. This industry mainly deals with providing solutions for removing C02 from the environment using natural and artificial methods. The C02 removal strategy is mostly integrated into many climate policies, as CO2 is an important element of climate change. CDR includes several methods that are mainly used on land or in aquatic systems. Land-based methods consist of afforestation, reforestation, and other agricultural practices. The water-based methods include ocean alkalinity enhancement, ocean fertilization, wetland restoration, and some blue carbon approaches. There are several products that are used in the CDR process that mainly include Biochar, Direct Air Capture (DAC), Enhanced/Carbon Mineralization, Ocean Alkalinization, BECCS, Microalgae, and some others. The CDR mainly finds applications in the technology and finance sectors. This industry is expected to grow exponentially with the growth in chemical industries.

Carbon Dioxide Removal Market Growth Factors

• The growing developments in the chemical industry are expected to drive the growth of the carbon dioxide removal market.
• The rising government initiatives for lowering CO2 emissions have driven the market growth.
• The increasing demand for clean air across the world fosters market growth.
• The growing investments from public and private sector entities for developing the carbon dioxide removal industry propels the market growth.
• The rising awareness of a clean environment among the people boosts the market growth to some extent.
• Increasing adoption of reforestation across the world is expected to boost market growth.
• The rise in the number of DAC plants in several countries across the world boosts market growth.
• The ongoing research and development activities related to CDR methodologies have impacted the carbon dioxide removal market growth positively.

Carbon Dioxide Removal Market Scope

Carbon Dioxide Removal Market Dynamics

Driver

Growing investment and funding for the CDR industry

The CDR industry has gained prominent attention due to the rise in CO2 emissions around the world. This industry has received investments from public and private sectors along with funding from several governmental organizations, venture capitalists, and others. These investments and funding are mainly used for research and development of carbon removal technologies along with technological advancements related to CDR technologies. Thus, rising investments from various sectors are likely to drive the growth of the carbon dioxide removal market.

• In September 2023, the Fossil Energy and Carbon Management (FECM) branch of the U.S. Department of Energy (DOE) announced an investment of around US$35 million for removing CO2 from the atmosphere.
• In April 2023, Apple announced an investment of around US$200 million for developing high-quality nature-based carbon removal projects for the protection and restoration of critical ecosystems.

Restraint

High cost and environmental issues

The application of carbon dioxide removal has increased significantly in recent times. Although the advantages of carbon dioxide removal are noteworthy, there are several problems in this industry. Firstly, the cost of setting up a CO2 removal plant is very high as the raw materials prices and labor wages have increased rapidly. Secondly, the construction sites of DAC centers and their surrounding areas are negatively affected by the release of CO2. Thus, the increased cost of setting up a CO2 removal plant, along with negative impacts on the environment, is likely to restrain the growth of the carbon dioxide removal market during the forecast period.

Opportunity

Growing application of blue carbon and microalgae in CDR

The CO2 removal industry is growing rapidly with the advancements in chemical sciences and its related fields. The rising applications of blue carbon and microalgae have gained attention in recent times as they are found to be highly suitable for removing carbon dioxide from the atmosphere. Blue carbon helps remove CO2 by leveraging photosynthesis in seaweed, coastal plants, or phytoplankton, and microalgae finds applications in absorbing the excessive amount of CO2 from the atmosphere. Thus, the rising use of microalgae and blue carbon for carbon dioxide removal is expected to create ample growth opportunities for carbon dioxide removal market players in the future.

Product Insights

The direct air capture (DAC) segment held the largest market share in 2023. The growth of this segment is generally driven by the rising developments in the chemical industry around the world. Also, the growing awareness of the need to prevent CO2 emissions, along with developments in electrochemical processes, boosts market growth. Moreover, the rise in the number of government investments related to the research and development of DAC is likely to drive market growth.

Additionally, several advantages of DAC, such as reduction of CO2, carbon recycling, smaller footprint, negative emissions, and some others, are likely to boost the growth of the carbon dioxide removal market. Furthermore, CRD companies are announcing several direct air capture and storage (DAC S) plants in various parts of the world, which is likely to drive market growth.

• In November 2023, Heirloom Carbon Technologies announced the opening of a direct air capture plant in the U.S. This plant was opened with the aim of removing excessive CO2 from the atmosphere.
• In August 2023, the U.S. Department of Energy (DOE) announced an investment of around US$1.2 billion. This investment is made for the development of two commercial-scale direct air capture (DAC) facilities in Louisiana and Texas.

The enhanced/carbon mineralization segment is the fastest-growing segment during the forecast period. This segment is generally driven by the rising demand for lowering CO2 emissions in the environment. Also, the rising application of the natural weathering process for converting atmospheric CO2 into rocks is boosting the market growth. Moreover, several applications of enhanced/carbon mineralization in stabilizing and permanently storing CO2 waste from mining industries boost market growth. Additionally, carbon mineralization helps prevent the biosphere and reduce CO2 emissions much more quickly than other methods, which in turn drives market growth. Furthermore, the rise in the number of research and development activities related to enhanced CO2 weathering, along with growing government initiatives for the development of carbon mineralization, fosters carbon dioxide removal market growth.

• In June 2023, the governments of Australia and Saudi Arabia announced a partnership to launch the enhanced mineralization workstream of the CDR Mission. This partnership is done to exchange knowledge between participating countries to develop the work plan that is needed to know the global CDR potential.

Application Insights

The technology sector segment dominated the market in 2023 and is expected to continue its dominance during the forecast period. The growth of this segment is generally driven by the rising number of research projects related to C02 removal. Also, the rising technological developments in the C02 removal methodologies, along with numerous enhanced oil recovery (EOR) projects in developed countries such as the U.S., Canada, Russia, Oman, Saudi Arabia, and others, are likely to boost the growth of the carbon dioxide removal market.

• In November 2023, the Petroleum Development Oman (PDO) launched a pilot project for utilizing CO2 for Enhanced Oil Recovery (EOR) in northern Oman. This initiative aims towards environmental sustainability and carbon neutrality.

The finance sector segment is expected to be the fastest-growing segment during the forecast period. This segment is generally driven by rising demand for a low-carbon economy and a sustainable future around the world. Also, the growing role of financial institutions towards climate change, along with supporting pricing, inter-temporal accounting, risk management, and cross-border investments for attaining net zero emission, is likely to drive the growth of the carbon dioxide removal market.

• In February 2023, the World Bank signed an agreement with the government of Ethiopia to lower CO2 emissions. Through this agreement, the World Bank announced an investment of around US$ 40 million in a sustainable landscape management program for mitigating carbon emissions.

Regional Insights

North America held the largest carbon dioxide removal market share in 2023 and is expected to maintain its dominance throughout the forecast period. The growth of this region is mainly driven by rising government initiatives in countries such as the U.S., Canada, Mexico, and others to strengthen the chemical industry. The rising investment from the public and private sectors for developing CO2 removal technologies drives market growth. Also, the rising advancements in science and technology, along with several government initiatives for carbon storage, are likely to drive market growth.

• In 2023, the U.S. Energy Department invested around US$ 93 million in 11 carbon storage projects that involved capturing & storing carbon below the seafloor in the Gulf of Mexico with an aim to store about 50 metric tons of CO2 in the next 30 years.

Moreover, the presence of several market players such as Blueplanet, Carbon Engineering, CarbonCure, CarbonFree, and some others are constantly engaged in developing CDR technologies and adopting several strategies such as launches, collaborations, and acquisitions, which in turn drives the growth of the carbon dioxide removal (CDR) market in this region.

• In April 2024, CarbonFree announced a partnership program with United States Steel Corporation. This partnership is done to capture carbon emissions generated from the U. S. Steel’s Gary Works Blast Furnaces.

Asia Pacific is expected to be the fastest-growing region during the forecast period. The growth of this segment is mainly driven by the rising demand for a carbon-free environment in this region. Also, the rising initiatives by public and private sector entities for developing the CDR industry are boosting the market growth. The growing number of research institutions engaged in research and development of CO2 removal technologies in countries such as China, India, Japan, South Korea, and others is likely to boost the market growth in this region. The growing investment by several chemical companies to maintain carbon neutrality is also driving carbon dioxide removal market growth.

• In April 2024, South Pole announced a partnership with GenZero. Through this partnership, both the companies aimed to launch the Asia Centre of Carbon Excellence (ACCE) that is a new hub of international experts for focussing on innovative and novel carbon project development, capacity-building and carbon policy.
• In January 2024, Sumitomo Corporation announced an investment of an undisclosed amount to Inherit Carbon Solutions to lower CO2 emissions. This investment is made with the aim of enabling the removal of several million tons of CO2 from the atmosphere in Japan in the next ten years.

The presence of several market players such as Greenovate Solutions Pvt Ltd, UNAKTI, KARDLE Industries, Gohemp Agroventures, Mitsubishi Heavy Industries, Sinopec, Caliche Inventions Private Limited, Organic Ledger and some others are constantly engaged in developing CDR technologies and adopting several strategies such as launches, collaborations and acquisitions, which in turn drives the growth of the carbon dioxide removal (CDR) market in this region.

• In June 2023, Mitsubishi announced a partnership with the South Pole. This partnership is done to permanently remove CO2 from the atmosphere in order to achieve net-zero emission norms by 2050 to meet the Paris Agreement.

Carbon Dioxide Removal Market Companies

• Climeworks
• Global Thermostat
• Carbon Engineering Ltd.
• Arca
• Cella Mineral Storage Inc.
• Bussme Energy AB
• Carbofex Ltd.
• Oregon Biochar Solutions
• Wakefield BioChar
• Novocarbo GmbH
• Carbicrete
• Neustark Ag
• Ebb Carbon
• CarbonCure Technologies Inc.
• CarbonFree
• Carbfix hf.
• HEIMDAL
• Blue Planet Systems
• Pacific Biochar Benefit
• Charm Industrial

Recent Developments

• In May 2024, Climeworks inaugurated the world’s largest operational direct air capture (DAC) plant in Iceland. This opening aims to release excessive amounts of CO2 from the atmosphere.
• In May 2024, CarbiCrete announced a partnership with 3Degrees. This partnership is done to remove carbon dioxide from the atmosphere to attain a sustainable future and emission-free environment.
• In April 2024, Drax Group announced a partnership with C-Zero. This partnership aims to lower CO2 emissions in the environment.
• In February 2024, Equatic announced plans to construct the world’s largest ocean-based carbon removal plant in Singapore. Through this announcement, the company aims to remove 109,500 tonnes of CO2 and generate 3,600 tonnes of carbon-negative hydrogen every year starting in 2026.
• In November 2023, Arca Climate Technologies launched a pilot project for capturing CO2 from mine waste in Australia.
• In April 2023, Global Thermostat announced the inauguration of the largest Direct Air Capture machines in Colorado, U.S.
• In August 2022, Carbon Engineering announced a partnership with Occidental Petroleum Corp. This partnership was done to initiate the construction of a carbon removal plant in the Permian Basin, U.S., that is capable of removing 500,000 tons of carbon dioxide annually from the atmosphere.
• In January 2022, Veolia joined hands with Carbon Clean. This joint venture is done for reducing industrial carbon dioxide emissions in India.

Segments Covered in the Report

By Product

• Biochar
• Direct Air Capture (DAC)
• Enhanced/Carbon Mineralization
• Ocean Alkalinization
• BECCS
• Microalgae

By Application

• Technology Sector
• Finance Sector

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa