Carbon Dioxide Removal Market is Likely to Experience a Tremendous Growth by 2031

Approaches to removing carbon dioxide (CO2) from the atmosphere are referred to as carbon dioxide removal (CDR). Direct air capture (DAC) combined with durable storage, soil carbon sequestration, biomass carbon removal and storage, improved mineralization, ocean-based CDR, and afforestation/reforestation are just a few of the many methods that fall under the umbrella of CDR. Growth in the carbon dioxide removal market is being driven by increasingly favorable government policies for carbon removal, investments, and collaboration among market players.

The global carbon dioxide removal market is projected to reach $2,083.4 million by 2031 from $462.0 million in 2022, growing at a CAGR of 18.2% during the forecast period 2022-2031. The growth in the carbon dioxide removal market is expected to be driven by increasingly supportive government policies and growing investment and collaboration among industry players. However, high energy costs for some technologies and lack of monitoring, reporting, and verification are some of the factors hindering the growth of the market.

Direct Air Capture to Dominate the Carbon Dioxide Removal Market (by Technology Type)

Among different types of technology, biochar led the market in 2021. However, direct air capture is expected to have the highest growth during the forecast period. There are various investments being the done toward the deployment of DAC at scale in major economies across the globe.

Additionally, other major factors driving the growth of the PEM electrolyzer market are the growing demand for sustainable and green technologies, investment from the government and private sector companies toward renewable energy, rising sales of fuel cell vehicles, and increasing focus on decarbonization and controlling greenhouse emissions.

Major challenges faced by the PEM electrolyzer industry are high investment costs, costly renewable energy, and a lack of hydrogen infrastructures such as hydrogen storage and hydrogen transportation. Additionally, the use of platinum group metals (PGMs) in water electrolyzers is another major bottleneck for the market, as PGMs have limited availability and cost a fortune. For instance, iridium is used as a catalyst in PEM electrolyzers, and it is one of the rarest metals on Earth and is also the most corrosion-resistant metal known.

North America to Lead the Carbon Dioxide Removal Market (by Region)

North America led the carbon dioxide removal market in 2021 and is anticipated to uphold its dominance throughout the forecast period, owing to the numerous government initiatives and investments by industry stakeholders to adopt carbon dioxide removal technology at scale.

Analyst View

According to Pooja Tanna, Lead Analyst, BIS Research, “Carbon dioxide removal technologies are expected to be the way forward for achieving net zero targets in the coming years. The increasing focus by governments across the globe toward adoption of CDR technologies and private and public funding are the major factors propelling the growth of the industry.”

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Recent Developments in Carbon Dioxide Removal Market

• In October 2022, Carbon Engineering Ltd. and Occidental Petroleum Corp. started the construction of a carbon removal plant in the Permian Basin, U.S. The plant would have the capacity to draw 500,000 tons of carbon dioxide from the atmosphere per year using direct air capture technology.
• In October 2022, Climeworks completed the commercial operations of its first-generation technology at its world’s first commercial direct air capture facility in Hinwil, Switzerland. The operation would help the company to sharpen the focus and achieve gigatons of CO2 by 2050.
• In April 2021, Thermostat signed an agreement to supply DAC equipment to the Haru Oni eFuels pilot plant situated in Chile. The plant will be utilized for capturing carbon dioxide with electrolytic hydrogen for producing synthetic gasoline. The plant is designed to capture nearly 250 kilograms of CO2 per hour.
• In July 2021, Carbfix announced a partnership with Aker Carbon Capture of Norway. This partnership will help combine the companies’ complementary technologies to offer the full CCS value chain in the global fight against climate change.
• In this report, market segmentation by technology type and carbon credit buyer has been considered. Soil carbon sequestration, carbon capture utilization and storage (CCUS), and afforestation/reforestation have been excluded from the study.