According to a report by management consultancy Oliver Wyman, the global market for carbon dioxide (CO2) removal credits could reach up to $100 billion a year between 2030 and 2035, a significant increase from the $2.7 billion recorded in 2023. This growth is driven by worsening climate change and the need to remove billions of tons of carbon from the atmosphere annually to meet global climate goals.
The report, co-authored by the City of London Corporation and the UK Carbon Markets Forum, states that demand for carbon removal credits has begun to increase across various sectors, including technology, finance, chemicals, and aviation. However, the current market size is not yet large enough to drive the scale of projects that experts say are required.
Barriers to growing the carbon removal market include a lack of universally agreed standards on CO2 removal credits and a lack of guidance on how these removals can be used to help meet climate targets. To address this in the UK, the report suggests the government should include removals in its emissions trading system, set out a financial framework to support the market, and endorse the use of removals within company net zero strategies.
Globally, the report found that $32 billion has been invested in carbon dioxide removal projects to date, with $21 billion going towards engineered solutions such as direct air capture (DAC) and $11 billion in nature-based solutions like tree planting. However, critics warn that a focus on carbon removals could deter companies from reducing their emissions as much as possible.