According to a report by management consultancy Oliver Wyman, the global market for carbon dioxide (CO2) removal credits has the potential to soar to $100 billion annually between 2030 and 2035, up significantly from $2.7 billion in 2023. The report, released in collaboration with the City of London Corporation and the UK Carbon Markets Forum, highlights the urgent need to address barriers hindering the market's growth to effectively combat climate change.
“Current efforts to cut emissions are insufficient, necessitating the removal of billions of tons of carbon annually to meet global climate goals,” the report states, echoing concerns raised by U.N. scientists.
Demand for CO2 removal credits is on the rise across various sectors including technology, finance, chemicals, and aviation. However, the scale of projects required remains constrained by several challenges, including the absence of universally agreed standards and guidance on utilizing removals to achieve climate targets.
“With the market projected to reach $10 billion annually by 2030-2035 based on current growth rates, strategic interventions are crucial,” the report emphasizes. Recommendations include integrating removals into emissions trading systems, establishing financial frameworks, and promoting their use in corporate net-zero strategies.
Globally, investments in CO2 removal projects have totaled $32 billion to date, with engineered solutions like direct air capture (DAC) receiving $21 billion and nature-based solutions such as reforestation attracting $11 billion. Despite these investments, critics caution that over-reliance on removals could divert focus from essential emission reduction efforts.
The findings underscore a pivotal moment for policymakers and businesses to accelerate efforts in scaling up CO2 removal technologies and integrating them effectively into broader climate mitigation strategies.
