As the world grapples with the accelerating impacts of climate change, 2024 emerged as another landmark year for the carbon dioxide removal (CDR) industry. Advances in technology, increased financial backing, and regulatory momentum have pushed the sector closer to becoming an essential cornerstone of global climate strategy.
But despite mounting enthusiasm, valid questions about scalability, cost, and regulatory frameworks remain. Pre-purchases are essential, but the industry must start delivering carbon removal credits in order to grow. For example, CDR.fyi reports that despite 12 million tons of CO2 being sold, only 4% of purchases have been delivered.
Below are the top five developments that defined the space this year.
1. Expansion of Direct Air Capture Plants Worldwide
Direct air capture (DAC) technology took a major leap forward in 2024 with the opening of new facilities and the expansion of existing ones. Climeworks inaugurated its Mammoth facility in Iceland, capable of capturing 36,000 tons of CO₂ annually. Powered by geothermal energy, it represents a significant upgrade from Climeworks’ earlier Orca plant. Meanwhile, Canada saw the establishment of the Deep Sky Alpha facility, a 3,000 ton per year DAC pilot testing and innovation center funded by a $40 million grant from Breakthrough Energy. These developments underscore the increasing feasibility of scaling DAC solutions, with global capacity for planned and announced projects surpassing 1 million tons annually for the first time.
2. Governments Increase Policy Support
Government support for carbon removal technologies reached new heights in 2024. In the United States, the Department of Energy announced $1.8 billion in new funding for DAC testing platforms, pilots, and commercial projects – providing a significant boost to scalable CDR solutions. At COP29, governments agreed to rules on how countries can create, trade and register carbon removal credits, creating more certainty in the market. Canada made waves with its carbon removal procurement commitment, pledging to directly purchase at least $10 million in carbon removal credits to offset government emissions to reach net-zero goals.
3. Record-Breaking Capital Raises
The CDR industry saw continued and increasing levels of private investment in 2024. Heirloom raised $150 million in Series B funding to scale its innovative DAC technology that uses robotics and rocks to capture CO2 from the air. CarbonCapture Inc. secured $80 million in Series A financing, with backing from Amazon’s Climate Pledge Fund and Aramco Ventures. Vaulted Deep closed a $32.3 million Series A round to expand its biomass carbon removal and storage operations. These investments highlight the growing confidence in the industry’s potential to achieve meaningful climate impact.
4. Landmark Purchase Agreements From Private Buyers
Corporate commitments to carbon removal ramped up significantly in 2024, with long-term purchase agreements marking a key trend. Morgan Stanley signed a deal with Climeworks to purchase 40,000 tons of CO₂ removals by 2037, supporting the expansion of DAC facilities like Climeworks’ Project Cypress in Louisiana. Google announced a landmark deal with startup Holocene to forward purchase 100,000 tons of CO2 removal at a record low price of $100 per ton by the early 2030s. Similarly, Microsoft and Royal Bank of Canada partnered with Deep Sky to pre-purchase 10,000 tons of carbon removal credits over 10 years, with an option for an additional 1 million tons. According to CDR.fyi, carbon removal credits passed 2.1 million tons sold for the first time. These agreements not only provide critical funding for new projects but also reflect increasing corporate accountability for carbon emissions.
5. Challenges in Delivery Remain
Despite these successes, the CDR industry continues to grapple with a significant delivery gap. According to CDR.fyi, only 4% of the 12 million tons of CO₂ removal credits sold worldwide have been delivered. This shortfall highlights the challenges of scaling operations, ensuring permanence, and meeting the growing demand for verified carbon removal. For example, CarbonCapture Inc. paused the development of its Project Bison in Wyoming because of increasing competition for renewable power driven by AI data centers. Bridging this gap will require innovations in project deployment and stricter quality assurance measures.
Looking Ahead
The developments of 2024 represent both progress and potential for the CDR industry. While challenges remain, the rapid expansion of direct air capture plants, robust policy support, record-breaking investments, and high-profile purchase agreements signal that carbon removal is on the cusp of transformative growth. As stakeholders work to address delivery gaps and improve scalability, CDR is poised to become a cornerstone of global climate strategy in the years to come.
Disclaimer: Phil De Luna is the Chief Carbon Scientist and Head of Engineering at Deep Sky
