Global Carbon Removal Market Could Reach $100 Billion Annually from 2030 to 2035, Report Reveals

By Susanna Twidale

LONDON (Reuters) – The global market for carbon dioxide (CO2) removal credits could potentially grow to $100 billion a year between 2030 and 2035, a significant increase from the $2.7 billion reported last year, if the current barriers to growth are addressed, according to a report from management consultancy Oliver Wyman released recently.

The escalating climate crisis and insufficient efforts to reduce emissions have prompted U.N. scientists to estimate that billions of tons of carbon must be extracted from the atmosphere each year, utilizing both natural and technological methods to achieve global climate targets.

Interest in CO2 removal credits is increasing across various sectors, including technology, finance, chemicals, and aviation. However, the current demand is still insufficient to propel the scale of projects that experts deem necessary, as stated in the report by Oliver Wyman, the City of London Corporation, and the UK Carbon Markets Forum.

The report estimated total sales of CO2 removals at $2.7 billion for 2023, with the potential to expand to as much as $100 billion annually by 2030-2035.

Among the challenges hindering the market’s growth are the absence of universally accepted standards for CO2 removal credits and insufficient guidance on employing these removals to meet climate objectives. Based on current growth trends from 2020 to 2023, the market is anticipated to reach $10 billion annually by 2030-2035.

To facilitate market growth in the UK, the report suggests that the government include removals in its emissions trading system, establish a supportive financial framework, and endorse CO2 removals as part of corporate net zero strategies.

To date, $32 billion has been invested globally in carbon dioxide removal initiatives, with $21 billion allocated to engineered solutions, such as direct air capture (DAC) technology that extracts CO2 from the air, and $11 billion in nature-based solutions like tree planting.

However, critics caution that an overemphasis on carbon removals could lead companies to reduce their emissions less aggressively.