How CDR 2.0 may differ from the industry’s first several years

by Jason Grillo

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“The impediment to action advances action. What stands in the way becomes the way” -Marcus Aurelius

Well it’s been quite a 12-month news cycle these last few weeks! I don’t want to discuss national or international politics much here, but suffice to say that when Canadian Prime Minister Mark Carney in Davos remarks that  the international system is in a state of “rupture”, people take note. 

In that backdrop of turmoil, I’d like to discuss what the perhaps bumpy future of carbon removal might look like in the longer time horizon. I’m basing this off the behavior of other industries, past climate peaks and troughs, and my own experiences in the field since I started working in CDR in late 2019.

The Trough

I’ll repeat my assertion in my previous post that per the Gartner ‘hype cycle’ chart, CDR generally is past the ‘peak’, and is just about to begin sliding into the Trough of Disillusionment. 

Uncertainty in markets and policy will likely make the next few years a challenging time for carbon removal project developers, who could struggle to achieve funding and product sales. The “less than 5 percent of the potential audience has adopted fully” above, supports the market situation today: the universe of potential buyers has not panned out as expected, with Microsoft still dominant as the world’s biggest CDR buyer – hence this meme here created by the “Carbon Removal Memes” folks.

While the model above suggests venture may offer second or third rounds of funding to some lucky companies, best money may come from other sources of financing: project financing, debt financing, or product revenue. Venture funding in hardware is a tough slog, and may be the same for carbon removal project developers. There is a danger that when venture money is put into hardware projects that ultimately fail, venture may leave the sector altogether – hence the lapse of climate venture funding between Solyndra’s collapse in 2011 and 2019/2020.  This would mimic behavior in Cleantech 1.0, where venture funded A123, A Better Place, and (infamously) Solyndra all collapsed (1,2). 

In the ‘Trough’ startups may close, early stage funders may not follow on, personnel may leave the CDR industry or depart climate altogether and pursue other interests in different industries. 

Open questions: How long will this period last? How deep will it go? And what types of activities will spur a rally?

The Seeds of Recovery

Other industries offer a parallel course to what CDR could see in the 5 to 10 year time horizon. The first internet wave crashed in 2000-2001; Google was founded in 1998 but didn’t IPO until 2003; Facebook was founded in 2003, Apple had its own wild trajectory with, then without, then with, Steve Jobs at the helm.  Cleantech 1.0 had its bubble burst around 2011, only to have solar and wind and battery startup survivors grow and develop and outpace expectations. And then we witnessed a  wave of a few years of early stage investment starting in the early 2020s, renamed as “Climate Tech.”

I predict a similar model will happen in CDR with crisis, rework, and steady robust recovery as a pathway to the future. Several factors are to play into this:

First, CDR 1.0 survivors will carry the industry. Some companies founded before say 2025 will ride out the storm, either by securing the capital they need, achieving commercial success in a challenging market environment, or pivoting to a new business model altogether. Climeworks is pivoting with Climeworks Solutions, offering portfolios of both engineered and nature-based approaches that remove CO₂ from the atmosphere. And Heirloom is partnering with United Airlines to produce Sustainable Aviation Fuel. Biochar deployment in a funding landscape absent venture money can yield physical product for sale with economic value, in addition to delivering CDR credits. That method alone could represent the growth driver for durable CDR credit markets in the next coming years while other CDR methods begin their first commercial deployments.

Here again, Cleantech 1.0 provides a useful analog when wind and solar commercial deployments advanced during the 2011-2019 period between Cleantech 1.0 and Climate Tech 2.0 (roughly). Government support was part of that with German Feed-in tariffs, but the main product – energy – as well as voluntary market Renewable Energy Credits (RECs) provided funding to keep these industries growing. Large, if not industry leading, success stories are also able to weather this type of market adjustment: IBM moved to services rather than primarily manufacturing computers. Yahoo is still alive and kicking. As are Cleantech 1.0 companies First Solar and this Tesla outfit you may have heard a bit about. 

Second, standard consolidation. As of 2026, many, many organizations offer standards for “What Is Quality CDR.” In a new industry, it is natural that that will happen since nobody really has a sense of what “Quality” truly means. The problem is that none are truly comprehensive, and this set of fragmented standards hurts advancement of the field, since outsiders looking in are forced to choose between a multitude of unfamiliar rubrics for comparing projects. This XKCD comic that made the rounds in AirMiners a few years ago best captures this phenomenon. My personal take is that there’s probably room for only a handful of standards relative to the multitude we see today, and that achieving clarity on these will make for a better directed recovery of CDR.

The nature of the standards will depend on what voluntary carbon removal credit buyers want to see. Regardless of whether early catalytic buyers, project developers, and their venture backers believe 1,000 years durability is true “quality,” the mainstream buyers will bear out the case in the market. If say 200 years+ is what becomes the de facto standard, so be it.

That said, the EU’s CRCF voluntary standard for biochar, BECCS, and DAC could be a starting point for this consolidation.

Third, market infrastructure. For one thing, many marketplaces exist for carbon removal credits, each with their own vetting system for who gets in. Buyers have a multitude of channels to choose from, but there are no consolidated exchanges yet.

Contract agreements for purchases are also bespoke; making them more turnkey is the crux of the effort at OSCAR – standardizing contract language to ease friction in carbon removal transactions (3). 

Fourth, price discovery is a key hurdle as well. We are starting to see glimpses of it with broad price bands reported likely due to low numbers of reportable prices in transactions, but nobody can say “ERW is trading at this price”, or (per above) what the 200-year vs 1000 durability price differential may be in a geography of interest. Such clarity may come with greater transaction volume (read: liquidity), but buyers need better price visibility to buy! 

A secondary market of trading credits will advance price visibility as well. Right now there is not much of a market trading issued but not retired credits. Deliveries are, by and large, assumed to be retirements rather than tradable.

Fifth, financial innovation can yield a viable path to recovery as well. Consider the potential for CDR to be considered as an asset that can be collateralized, rather than an expense. The work of the Carbon Liabilities and Assets Initiative is particularly interesting in that regard. It  removes offsets of any variety from the P&L (which may affect executive compensation and stock price) and instead characterizes credits as an asset to be countered against a liability.

The Rebound: VCM 2.0 and Compliance Markets

Crucially, policy measures to support CDR – at times taking years of painstaking work – will enable the development of both voluntary and compliance markets.

Sylvera estimates that sometime in the next several years, compliance market volume of CO2e will surpass that of voluntary carbon markets. As CDR becomes better integrated into compliance markets, financing for projects may step in to support on the grounds of a more solid customer base (4). I agree with Robert Hoglund’s assertion first that “Carbon removal needs a new story”, and concur with his point that “[f]or compliance, the only real driver for durable carbon removal in the medium term is inclusion into the UK and EU ETS.” We also need to note his caveat that the high price of durable CDR would be too much to be viable in  those markets absent Contract for Difference (CfD) government support.

A common theory of change is that anticipating compliance markets will spur voluntary climate action. That way the buyers will grow beyond the courageous few maverick companies who have deep margins to spare. As compliance markets grow and incorporate carbon removal into their schemes, a new round of startups may spring up, spurring technological innovations that rival the monumental work that so many many startup founders to date have put into novel methods to remove carbon dioxide from the atmosphere.

Carbon removal can also achieve re-emergence through insetting and industrial value chain integration. The entrepreneur of CDR 1.0 may become the intrapreneur of CDR 2.0, working inside a company so that the industrial processes that remove carbon become part of the organization’s value chain. While entrepreneurial in its nature, ‘intrapreneurship’ offers its own challenges, risks, and advantages over a stand-alone startup – more to come on this. As a built-in part of an existing company, CDR can offer some way to solve a general business problem, raise revenue, reduce costs, or acquire customers for a larger business. So carbon removal projects can become a  ‘race to the top’ that yield economic benefits rather than being perceived as an add-on cost of doing business. 

The key risk in the CDR 2.0 world would be policy uncertainty – hence starting this piece off with the term “Rupture.” In a world where international cooperation is weakening, arriving at global standards – or at least a handful of accepted standards – will prove a challenge. The U.N., World Bank, WTO, climate COP and other international bodies could see their power and influence deteriorate, which would diminish the potential for international carbon markets as well. Carbon nationalism may rise as well, where governments assert greater control of the carbon emissions mitigation and sequestration activities within their borders.

Conclusions

Just as the tides wash in and out, the tide of fortune and misfortune cycles through. Such is the way with so many aspects of life; the fledgling durable carbon removal industry will seem no different from others in that regard. While there are significant obstacles in the path of durable carbon removal today, the failures of the market point to pathways for renewal after a time of turbulence. Pragmatism in the near term will lead to flourishing in the longer term.

Finally, my view is that Prime Minister Carney may very well be right about the state of rupture – he got a rare standing ovation from the Davos audience. As a carbon removal community, we would be blind not to listen to the broader context of global uncertainty that coincides with an uncertain time for our industry, and seek opportunities for recovery.  I believe a better world will ultimately emerge, whose achievements, both in climate and beyond, dwarf those of the old. It’s a future worth fighting for.

Endnotes:

1. Yes, Solyndra received a $535M loan from the DOE in 2009, and additionally had about $1 billion in venture money invested in it as well – see article here from 2011.
2. Fun fact: When I was working at a solar inverter company, I actually toured the Solynda factory in Fremont, California…just weeks before the company declared bankruptcy.
3. Utterly shameless plug directing you to a recent webinar discussing OSCAR, hosted by the illustrious Institute for Responsible Carbon Removal, American University.
4. Biopharma companies are able to IPO without product revenue simply for that reason: customers and health insurers will pay for potentially life-saving and disease-altering therapeutic interventions. See previous Substack on this situation here.

Jason Grillo is the Principal of Earthlight Enterprises marketing and carbon finance consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer, client, or associated organization. This post also appears on his Climagination Substack. 

How an industry that “makes ship happen” is poised to become a carbon removal pioneer

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“In innovations that are based on process need, everybody in the organization always knows that the need exists. Yet usually nobody does anything about it. However when the innovation appears, it is immediately accepted as ‘obvious’ and soon becomes ‘standard’ “

-Peter Drucker, Innovation and Entrepreneurship

Sometimes the solutions that we seek are just under our very noses, in seemingly innocuous places that only come into focus when you step back for a second. A case in point is exactly that for two industries: carbon removal and wooden pallets. 

In this post I’ll take up the case of why the wooden pallet industry may be such a ‘beachhead’ for scaling biochar by mainstreaming it into important sectors, adding an innovative solution to address a key process need.

Innovation in Action

On October 21 and 22, process innovation was on display for all to see at the National Wood Pallet and Container Association (NWPCA) fall plant tours in Houston, Texas. Truly it was a privilege to attend, with the highlight being a tour of industrial transformation through biochar at a pilot pyrolysis facility on the site of pallet remanufacturer, 48forty Solutions.

Meet ‘Audrey’,  the RAINMAKER™  pyrolyzer who came into the world just outside of Austin, Texas, as an induction-based pyrolysis machine from the environmental technology company, LOCOAL. She’s always looking for someone to feed her 8-10mm wood chip feedstock, and her favorite musical is Little Shop of Horrors. 

To fill in the picture further, Audrey is just getting her final checks done onsite. She can consume two tons of feedstock per hour and produce biochar, electricity from natural gas, and bio-oil, as well as wood vinegar. 

So this innovation is real, and happening now on the ground level. But let’s zoom out a minute to talk about why and how this moment is right for wooden pallet pyrolysis to create biochar.

Why Pallets? Why now?

For background, the pallet industry literally supports shipments of goods that we all depend on for daily living. Most goods that travel for mass delivery happen on the top of a wooden pallet – in the United States 1.8 billion pallet units are in circulation, 92% of which are wood, and 500 million are manufactured each year. The estimated value of the wooden pallet industry is $20 billion in 2025. Over 2500 firms are listed by the US Census as “Wooden Container and Pallet Manufacturers”¹; with a prevalence of small and mid-sized businesses. While there are several large firms, the data suggest that the industry is not highly concentrated relative to other industries.²

Sustainability is on the forefront of wooden pallet companies’ minds: though 95% of wooden pallets are recyclable, the industry generates 500,000 tons of landfill wood waste in the form of unusable, unrecyclable pallets.³ While a 2020 study concluded that wooden pallets have a (marginally) better carbon footprint relative to plastic pallets, the wooden pallet industry sees a need to innovate for sustainability. To that end the NWPCA achieved UL certification for a wooden pallet Environmental Product Declaration (EPD) in July 2020.

In that light, how to dispose of unusable wooden pallets is a key consideration. Some companies sell ground-up wood waste wood as mulch or use in fiberboard and boiler fuel. However, the economics of the market for these end uses may not be favorable depending on the recycling site dynamics – with over 2500 companies in various geographies, there is significant variability as to how viable those end-use markets are to any individual company. Sending large quantities of wood waste outright to a landfill requires paying a tipping fee as well, making that a less attractive option from a financial and climate perspective. 

With these trends in mind, additional revenue streams or opportunities to derive value from supply chain waste can confer a competitive advantage to pallet companies.

Enter biochar.

Why Biochar? Why now?

Biochar is having a moment as a high-growth field, and efforts are afoot to accelerate biochar carbon removal through industrial integration, with many sessions dedicated to that prospect at the US Biochar Initiative 2025 North American Biochar Conference.

The biochar production industry is growing rapidly worldwide, with deliveries of biochar carbon credits doubling each year from 2022 to 2024. As a consequence, biochar has become by far the most commonly delivering carbon removal method according to CDR.FYI.⁴

Biochar pyrolysis equipment manufacturers are benefiting from credit delivery growth, and are expanding their offerings to service more industrial biochar producing clients. With this future in mind, the market value of industrial scale equipment manufacturers is forecasted to grow at an over 11% combined annual growth rate from 2024 to 2028.

Integrating into existing industries by finding innovative use cases has been a key question for the biochar industry for many years (see this 2021 AirMiners event on exactly that topic). The difference now is that instead of biochar entrepreneurs looking at innovative use-cases for its end products, the industry could advance by creating innovative pathways to embed the practice of biochar production into existing verticals for developing projects.

Achieving an adequate return on investment for intrapreneurs and their companies is the key step.

The Business Case 

In short, biochar has the opportunity to turn a waste from a cost to a more substantial revenue generator. 

Pyrolysis that creates biochar from wood waste can rely on multiple revenue streams:

• • Energy generation revenue from the pyrolysis process, especially with Federal 48E tax credits for bioenergy in the US under certain conditions⁵
  • Sales of physical biochar for customers to use or build into their own products.
  • Tipping fees if the pyrolysis site is permitted to receive municipal solid waste (MSW) or construction and demolition wood waste (C&D)
  • Carbon revenue, from either
    • Offsetting where the carbon credit – and environmental benefit value – is sold to an entity separate from the physical char purchaser.
    • Insetting where the carbon benefit and the char are bundled together and sold to a single company to address their supply chain Scope 3 emissions 

As an added bonus, pallet producers as established businesses could have access to debt financing for project development that eludes many smaller biochar startups. 

In that light, biochar players can see a ready-made partner with wooden pallet companies for growth. Across the wooden pallet industry, pallet producers can ‘hire’ biochar for the job-to-be-done: sustainable wood waste management.

What is the Next Milestone?

Significant opportunity exists here at the intersection of these two industries, and innovation in business models is a key driver.  

On the one hand, larger pallet recyclers could purchase pyrolysis units themselves, and deploy at different sites where doing so is economically viable and technically feasible. Alternatively, groups of smaller local pallet companies may form joint ventures or special purpose vehicles (SPVs) which could pool financial resources and establish a mutual pyrolysis site to collect feedstock across several sites. They could also potentially coordinate with regional biochar networks to share best practices.

The most critical aspect of innovating within the industry at this point is to establish a core group of leaders dedicated to advancing the practice of pyrolysis. The ‘Early Adopters’ can provide examples and teaching for the industry, so that others can learn of the successes, challenges, and opportunities experienced at the early stages.

Fortunately we know many of those folks already:

A Final Word (for now)

The pallet story is only now starting to be written, and I will likely take this up in future writings. In this way, other industries interested in pursuing carbon financing can use the learnings here as an example of how to integrate carbon removal into their everyday business practices. For by doing so, I believe that the practice of removing excess carbon dioxide from the sky by any method can reach new heights.

More to come – onwards!

Many thanks to the NWPCA for hosting an excellent event, to Jess Bonsall at 48forty Solutions, Miles Murray and Matt “Petey” Peterson at LOCOALfor the site tour, and Kat Vasquez from Oxnard Pallets (an AirMiners BootUp graduate!) for making the many, many introductions to the wooden pallet community.

Jason Grillo is the Principal of Earthlight Enterprises marketing and carbon finance consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer, client, or associated organization. This post also appears on the blog of the Institute for Responsible Carbon Removal.

¹NAICS code 321920

²HHI value of 88.1 in 2022, per census.gov

³Source: NWPCA: https://www.palletcentral.com/page/LandfillAvoidance, assuming average of 40lbs per wooden pallet

⁴Disclosure: I am a voluntary contributor to CDR.FYI

⁵For an analysis of conditions of eligibility for 48E, see this from PWC: https://www.pwc.com/us/en/services/tax/library/pwc-final-regulations-clarify-rules-for-section-48-tax-credit.html#:~:text=The%20proposed%20and%20final%20regulations%20define%20qualified%20biogas%20property%20as,that%20is%20qualified%20biogas%20property.

… And what ‘Fight Club’ can teach us

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Greetings again after I took the summer off from writing! Here’s something lost in the discourse surrounding the One Big Beautiful Bill and its dire consequences for climate movement in the United States: the much-coveted 45Q tax credits remain intact. In fact for CCS purposes the value per ton of those credits increased to be at parity with DAC credits. Despite the many setbacks the climate movement saw in the OBBB passage, carbon dioxide removal seems to have escaped the worst of outcomes. Begs the question: why?

I’m not going to rehash the politics of how and why the OBBB itself came to pass. Rather, in this piece I’m going to explore some upstream reasons why I believe that carbon dioxide removal was spared the worst, with culture as a primary driver.  To be clear: I believe the bill’s repercussions for many climate solutions – especially the wind, solar, and electric vehicle industries – will hamper economic growth and climate progress. Think of this writing more as an opinion essay rather than a data-driven argument, drawing on experience as an entrepreneur, policy advocate, and community organizer.

There’s an adage that politics is downstream of culture. So it would follow that carbon removal culture is part of the reason that CDR has to date enjoyed downstream political support in the USA, . The nature of the industry and the policy advocacy efforts by many, many dedicated individuals to this point in time has provided something that regulators, civil servants, elected officials – and their constituents – can get behind, on both Left and Right, in conservative or liberal contexts.

Here are some of my observations on the advantages that CDR achieves in its general industry culture:

1 – Carbon removal represents a new type of climate solution, famously thrust into the spotlight in 2018 with the IPCC statement that removing excess atmospheric CO2 is going to be necessary to achieve the world’s climate targets. Being new has spared CDR from excess baggage of decades of fighting over environmental policy. This offers a contrast to renewable energy, or EVs which are making headway significantly now, but only after decades of opposition and foot-dragging.¹

Furthermore, the novelty of CDR is not in stopping emissions, but targeting what is existing in the atmosphere already – which makes for a different framing of climate solution. In short, there’s no incumbent industry that is going to resist the threat of being displaced!

2 – Because CDR features many different technological approaches, the industry as a whole can offer a diverse set of co-benefits to a wide variety of stakeholders beyond the all-important ton of atmospheric carbon dioxide removed. In other words, while industry insider participants may contend adamantly about advantages and drawbacks of particular CDR methods, there’s enough benefits to serve the additional needs of many interested parties. CDR is not biochar alone, Direct Air Capture alone, or BECCS alone – it is a set of widely varying solutions centered around one central problem.

3 – Third, branding. Excess atmospheric carbon dioxide is legally characterized as pollution as of the 2007 Massachusetts vs EPA Supreme Court decision. And pollution = bad. As such, the carbon removal industry strives to clean up this big carbon spill in the sky² – and do so in a way that does not threaten incumbent industries. And in doing so consider the non-climate aspects of a CDR solution – a climate solution which does not talk about climate per se, similar to how the first rule of ‘Fight Club’ is to “not talk about Fight Club”.

A corollary: Transforming a pollutant into a product that can provide value to a customer turns the climate conversation on its head. It tickles the imagination to think that a ‘bad’ can become a ‘good’. I’m particularly fond of the Reversing Climate Change podcast not just because of the content, but because of the mindset that leads us to think that reversing the worst of climate change is possible – it suggests agency rather than passivity.

These factors make conversations about carbon removal easy to enter into. The ‘ask’ in carbon removal is not so much asking people to change their lifestyles – that can lead to resistance. Rather to seek support for forward thinking solutions that truly tickle the imagination. To wit, anecdotally I’ll say that I’ve had many conversations with family, friends, and friends of friends about carbon removal, and I frequently hear:

“You can do that? Really??”

“Yes, really. We can turn a waste pollutant into a product or service of value.”

And when I tell people that if we stop emitting CO2 first and foremost, while scaling up carbon removal, then we can draw down the 425ppm of carbon dioxide³ to preindustrial levels over the course of decades, I get the same response: 

“This is possible? Really?” 

Yes. It. Is. Possible. 

This framing imbues the industry with a message of hope, which has enabled CDR (to date) to sidestep the culture wars that have led many climate solutions to fall victim to pitched on-again / off-again battles in the United States, depending on the whims of 2 or 4 year election cycles. A positive culture emerged from a blank slate, offering potential economic benefits while moving forward on a narrative of hope.⁴

I firmly believe we need an “all of the above” strategy for climate solutions – no one solution set alone is enough. Threading the needle of culture can lead to policy success downstream; some sectors of climate solutions have succeeded at that better than others. Carbon dioxide’s ability to avoid the worst of climate culture wars to date has to be considered a success in the early stages of the industry.

Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. This post appeared on the Institute for Responsible Carbon Removal blog. 

The opinions expressed in this writing are each author’s own and do not reflect the position of any employer or associated organization.

¹See GM’s EV1 which was on the US market from 1996 to 1999 

²Hat tip to Mike Robinson at Pacific Coast Legacy Emissions Action Network (PACCLEAN.org) for this metaphor

³As of August 2, 2025, per https://www.co2.earth/daily-co2

⁴And “hope is a good thing – maybe the best of things”

 

Markets move at the speed of trust. Durable carbon removal needs to create more of it to attract new customers and accelerate the market. 

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Hey folks, glad you made it here!

I’m going to say a quiet part out loud: if a customer doesn’t buy from you, it’s because they don’t trust you to deliver value for them for the price, relative to other options.

As it is still a young industry, carbon removal struggles with finding new customers; in a new market, and new offering, to a new customer who has never purchased the class of product before, trust is crucial. “New” can generate attention, but “trust” makes business happen, and carbon removal project developers  – and the intermediaries they work with – have to overcome many, many barriers to earn that trust. 

This operates on three levels:

1. Enticing customers to trust the class of product or service 
2. Reaching mutual understanding of terms that the customer trusts under a contract
3. Demonstrating operational credibility to deliver based on that agreement

I want to talk about how the market for durable carbon removal can advance through reducing risks and making trust happen. 

Symptoms

The chart presented here at Carbon Unbound East Coast from Alexander Rink at CDR.FYI¹ shows the problem: a slowing rate of new customers entering the market to purchase credits, with more than 70% of the purchase volume from Microsoft alone.

Durable CDR is running out of early adopters and has not yet broken through to a different group of more mainstream customers – who have a lower risk tolerance and are less likely to trust novel methods to achieve their business goals.

Bluntly, this represents a failure to achieve trust among new customers who have never purchased durable carbon removal credits.

Digging deeper, the story is a bit more nuanced. Operational credibility (#3 above) is there: Microsoft purchases that are breaking through with large multimillion ton deals by large scale project developers, who have resources to execute well using carbon removal technologies that are well understood such as BECCS and biochar. Considering the agreements strictly within durable CDR, this is low risk / high trust.

For both Microsoft and non-Microsoft customers, volumes per purchase are increasing – showing that yes they trust that the carbon removal works well if they have purchased already.

Beyond Microsoft and the Frontier group of companies, customers who have never purchased carbon removal are not seeing value for the price required by suppliers, even when factoring in co-benefit narratives. “No sale” is more trustworthy than a purchase. Not that new customers necessarily believe that any particular project might fail – I don’t believe that trust is absent, there’s just not enough of it for a new customer to address their own business risks. For sustainability managers with limited internal political capital, their trust is best placed in projects outside of carbon removal, or even outside of offsets generally, or with inaction.

Even in setting a Net Zero target, the unknowns for any future technology are a challenge, as suggested in this chart from SBTi:

Though this data is from March of 2024, in 2025 placing trust for new technologies is even more difficult in a macroeconomic environment that today is rife with uncertainties.

For existing CDR customers: Continue to improve trust in CDR

Right now the remedy for a lack of trust are a host of diligence exercises at the project by project level. Registries, marketplaces, insurance, ratings agencies, and external consultants hired by purchasers all will look at a project before final signatures go on paper. To say nothing of legal teams who would review new types of contracts covering a new class of credit.

I’m *not* arguing that we should throw these diligence activities out the window at all: they are necessary to build trust for those who already want to pursue a carbon removal purchase. But as the current best practice for trustbuilding, their existence represents table stakes for transactions to occur for those who are interested in going forward, however aren’t inspiring more new customers to place their trust in durable CDR.

This establishes a good baseline of trust at the level of convincing those who are interested to begin with to trust that a project is credible.

Prospective customers: Increase trust to purchase 

My recommendation: look to higher systemic activities that fit into existing frameworks for new customers. We know from a survey of sustainability professionals by Verdantix that firms do not pay much of a financial penalty for missing net-zero targets, and that the chief risk is reputational.

So lean into ways that enable a customer to build reputational credibility in durable carbon removal as a class of product.

• First, gain acceptance of CDR methodologies among standards bodies who evaluate registries. Based on data from the Patch marketplace, the most influential is the Core Carbon Principles approval, from the Integrity Council for the Voluntary Carbon Market, which has started to apply the CCP label to millions of issued credits.

• Second: Encourage formal forums or informal peer-to-peer experience sharing among potential customers. Sustainability professionals speak with each other, yet networks of people who have made purchases of carbon removal represent an untapped resource. This would take place in the context of a broader offset conversation where durable carbon removals are a specific class of offset. Decision makers may or may not trust CDR suppliers, or if they do, it’s after many rounds of diligence. 

Fence sitters are more likely to become interested in durable CDR if a colleague can vouch for the practice in the first place. Formal or informal connections among sustainability offices can create social proof among trusted peer sets for best practices – building trust in durable carbon removal.

The need is especially acute for sharing how to work with corporate procurement teams, financial leadership, and legal departments surrounding contracting. Bespoke contracts lead to bespoke contracts; systematizing standard forms of contracting for durable carbon removal leads to trust.

• Third: Find a way to deliver business value beyond carbon removal. This opens up another avenue to build trust: yes the sustainability claim, but showing a return on investment more clearly. This came through clearly in the CDR.FYI / Sylvera market survey of potential purchasers:

Conclusion, and Prognosis

I believe that the problems behind carbon removal markets are solvable, by employing new methods of winning trust among new customers. Today, gaining trust takes a great deal of effort on behalf of carbon removal suppliers, such that fewer new purchaser organizations are coming to CDR relative to previous years. Third party standards, peer networks among fence-sitting purchasers, standard contracting, and greater publication of successes are ways to improve credibility of CDR and make markets expand.

 

Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer or associated organization.

¹ Thanks to Alex Rink and my voluntary contributor colleagues at CDR.FYI for their work on the presentation. To request the full presentation, see this link here

Methane and Super Pollutants: A New Pillar to Support Carbon Markets

Controlling super pollutant emissions can have a rapid, outsized impact on climate change, while offering high quality carbon credits. Markets are taking notice.

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Hello once more, and thank you for reading!

Good things often come in fours – the ancient Greeks believed in four elements of earth, air, fire, and water; The Three Musketeers had Athos, Porthos, Aramis, and D’Artagnan; and the Beatles were a (Fab) Four.

The same can be true for carbon markets. To date voluntary and compliance sectors have stood on three major pillars of credit classes: avoidance (including RECs and REDD+), nature based solutions, and durable carbon dioxide removal.

Today I’m going to provide an overview on what I believe to be the fourth ‘pillar’ of carbon markets: methane and super pollutant elimination credits. Controlling emissions of these non-CO₂ gases are crucially important for shaving off near-term temperature increases as they have an outsized impact on global warming relative to CO₂. While I’m going to synthesize from a wide variety of sources, most of my focus will be on methane as the super pollutant most responsible for warming to date.

This is not to say that we don’t need crediting for CO₂ – rather that a portfolio approach that includes the all important “e” in CO₂e for ‘equivalent’, which can change the shape of carbon markets and provide an important tool for supporting climate action.

Here’s three questions I’m going to address briefly:

1. 1. Why are Super Pollutants so important?
   2. How are solutions for them created today?
   3. What makes this new category ‘real’ in carbon markets?

Why are Methane and Super Pollutants so important?

Methane, nitrous oxide, and ozone depleting fluorocarbons account for a significant portion of climate change forcing that we are experiencing today. Methane emissions are responsible for about 30% of recent warming , and nitrous oxide has caused about 10% of warming.

Even though super pollutant concentrations are much lower than CO₂ in the atmosphere (e.g. methane is at around ~2ppm vs CO2’s 420ppm), super pollutant gases have a high global warming potential as measured over a 100 year time period relative to CO₂:

Eliminating these emissions are a huge opportunity for impactful climate action to manage as outlined in the US National Academy of Science Engineering and Math report in 2024. Targeting non-CO₂ greenhouse gases can shave off significant risks from climate change before 2050:

The speed of change by managing methane emissions is striking. Because the CH₄ molecule is active and unstable, it breaks down within 15 years – so stopping emissions now could lead to a rapid decline in atmospheric concentrations. To use the famous ‘bathtub’ metaphor, it’s not just that stopping water entering the tub means that the water doesn’t rise anymore: it means that the excess water (i.e. ambient atmospheric methane) will disappear in a fraction of the time relative to CO₂.

The result, per Dr. Gabriel Dreyfus et al:

“non-CO₂ targeted measures when combined with decarbonization can provide net cooling by 2030 and reduce the rate of warming from 2030 to 2050 by about 50%, roughly half of which comes from methane”

In other words, we can slow down global warming by focusing activity on methane and other non-CO₂ super pollutants.

How do we create solutions for Super Pollutants?

To start, the atmospheric science community is advancing rapidly to pinpoint hotspots now visible through satellite imagery or other detection solutions. Turning off these excess emission sources at the metaphorical spigot enables businesses to generate emissions avoidance credits. Destroying these gases as well is a credit generating project.

Considering methane, major emission sources include but are not exclusively:

• • Oil and Gas extraction, transport, and distribution
  • Livestock enteric methane emissions
  • Landfill emissions
  • Wastewater processing emissions
  • Agricultural emissions, particularly rice farming
  • Permafrost emissions
  • Wetland emissions

Businesses are springing up to develop solutions for reducing Super Pollutant emissions, building revenue streams on emissions mitigation or destruction credits. Crediting mechanisms for these activities are coming online as well, especially as new projects deploy to manage the different classes of super pollutants.

Note: Methane credits today are emission avoidance credits. While the prospect of ambient methane removal is quite exciting, the technology may be many years away from field deployment and commercialization at the time of this writing.

In the voluntary carbon market, several crediting methodologies are in place already, and their registries have been issuing credits. Projects for landfill methane emissions have been in existence for several years, using Climate Action Reserve and Verra for methane management crediting based on activities with landfills, livestock, and coal mines.

Other registries and registry endorsing bodies are taking notice as well, with American Carbon Registry and the International Carbon Registry (ICR) creating methodologies for capping orphaned, abandoned, or marginally producing oil and gas wells – noting that ICROA granted unconditional endorsement to ICR in January 2025. Furthermore, in June 2024, the Integrity Council for Voluntary Carbon Markets approved using the Core Carbon Principle label on 27 million issued methane and ozone-depleting substance destruction credits. These quality labels are crucial for establishing trust in the credits and projects that they issue from.

For nitrous oxide, 40% of emissions are from human activities, primarily from agriculture, per the IPCC, so efforts at stopping emissions in that economic sector would be a path forward – enough to warrant a methodology for crediting nitrous oxide photocatalysis.

Ozone Depleting Substances (ODS) such as CFCs and HCFCs typically come from leaking older refrigerant systems. Collecting and destroying these containers to create carbon credits is painstaking project work, but which offers financial incentives to build a business.

Beyond voluntary markets, compliance markets have protocols as well for projects that collect and destroy Ozone Depleting Substances, with projects generating credits that have been traded systems in California and Washington State. Based on voluntary market price points for non-CO2 credits (more on this shortly), these credits trade at or below Washington and California compliance market clearing prices¹, as well as below UK and EU ETS prices at the time of this writing.²

What makes the Super Pollutant opportunity real for carbon markets?

Several factors are key drivers, including price, co-benefits profile, and third-party rated quality measures.

Price points. These projects are coming into the market at a price that is within the range conducive to adoption in voluntary and compliance markets. The table below that summarizes the four major pillars, with price points, supplied by Robert Cheesewright and Tom Fallows at Pinwheel:

The price point of the ‘second generation avoidance’ credits stands out, sitting between first generation avoidance and higher priced durable carbon removal, and roughly at the same level as Nature-based solutions. Considering strictly price and quantity of credits, this price point would suggest that methane and super pollutant projects would be able to command the same transaction volume as large quantity nature based projects. In fact, there are some hints at this already with Guacolda Energia retiring 2.3 million methane credits in February 2025.

Co-Benefits. The co-benefits narrative behind methane and super pollutant credits are more challenging to tell in comparison to more compelling stories surrounding other types of credit projects. Put bluntly, nature-based, carbon removal, REDD+ or REC credit projects have found an easier time to weave their story into ESG reporting and speak to the community story behind projects. Qualitatively, as noted by Calyx Global ratings, methane and Super Pollutant credits are not as ‘charismatic’ as many other classes of credits, and as such may be undervalued by carbon markets.

Credit Quality. Building on the co-benefits stories, Calyx notes that these ‘uncharismatic’ super pollutant projects tend to have a higher credit rating than their more ‘charismatic’ counterparts:

This is not to say that ‘charismatic’ projects are bad – far from it – or that their quality ratings won’t improve – they likely will over time with more rigorous methodologies and enhanced project management practices and technologies. That said, in the current carbon market environment which is seeing a preference to quality measures, credit purchasers are demanding more Super Pollutant credits.

Market results. In light of the trends above, the methane and super pollutant credit purchases and retirements are expanding rapidly. To wit, 2024 methane credit retirement volume increased 70% over 2023. Reaching nearly 4.4 million credits in that calendar year³, methane alone representing about 2.5% of the 175 million voluntary carbon market retirements in 2024.⁴

This trend is continuing in 2025 as well, with Q1 non-CO₂ retirements seeing the largest number of non-CO₂ gas credit retirements on record per MSCI.⁵

The market conditions for this growth are making for a methane and super pollutant moment. The growth of retirements in voluntary markets suggests that corporates prefer highly rated quality credits at a price point approximately akin to nature-based ARR, IFM, or soil carbon credits. The advent of new technologies, new projects, new crediting methodologies and (most importantly) the endorsement of registries themselves by quality monitoring bodies is a key driver of this trend. These are reasonably priced, high quality credits, though project co-benefits outside of emissions reduction is a hindrance.

Conclusion

Methane and Super Pollutant Elimination credits are an unheralded and rapidly growing segment of the market. These projects offer clear and direct climate benefit in the near term, and are settling in at prices and volumes that suit the needs of voluntary and compliance markets. As such, they slot in nicely to a portfolio as a fourth ‘pillar’ alongside traditional avoidance offsets, nature based credits, and durable carbon removal.

My take:

• • Super pollutant emissions represent a clear and actionable, though overlooked, focus area in climate.
  • Action to reduce methane emissions in particular can lead to significant climate impact in short order.
  • Several solution pathways are in place already with more under development.
  • Carbon credit markets are expanding rapidly for these emission reducing or destroying activities.

What do you think?

Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer or associated organization.

¹Washington State March 2025 auction settled at $50 per allowance, California + Quebec combined markets auction in February 2025 settled at $29.27 USD.

²65 EUR/ton for the EU ETS, $47 USD/ton for UK ETS. Source: https://carboncredits.com/carbon-prices-today/ accessed April 19, 2025

³Thanks to ClimateWells for posting this data on their blog and their CEO Reid Calhoon for placing Q1 charts on LinkedIn. 

⁴Sylvera, The State of Carbon Credits 2024

⁵Posted on LinkedIn by ClimateWells CEO, Reid Calhoon, here

Getting to a mainstream market is possible in carbon removal; here’s some thoughts on how

“A bit of advice given to a young Native American at the time of his initiation: 

‘As you go the way of life, you will see a great chasm. 

Jump. 

It is not as wide as you think.”

― Joseph Campbell

---

Welcome back! I’m writing this as a companion post to Part 1 where I proposed that CDR is at a ‘chasm’ point between an early market and a more mainstream class of customer. In this post (Part 2 of 2), I will offer some suggestions on how a carbon removal project developer might make that transition. Once again, I’ll adapt key principles from Geoffrey Moore’s Crossing the Chasm to durable carbon removal, this time talking about specific actions which early stage companies can take that might yield success.

As a reminder, here is a graphic of Moore’s technology adoption lifecycle curve:

And a shorthand reminder of the three segments most in play for CDR now: 

1. 1. 1. Enthusiasts (AKA Innovators) who are most interested in technology for technology’s sake.
      2. Visionary customers who want to be the first to implement new solutions as the start of revolutionizing the way businesses operate.
      3. Pragmatists who are Mainstream customers less interested in being the first to lead, desiring lower risk products at higher volume, with more sensitivity on price.

Because these Mainstream customers are qualitatively quite different in their needs from Early Adopters, succeeding with that group is akin to bridging a marketing Chasm.

Achieving product adoption in this third, Pragmatist group requires a different set of tools compared to the first two. To that end, based on my reading of Moore’s principles here are some strategies that I have adapted to durable CDR.

A: Target a segment of customers, not a whole market. 

Moore talks a bit about finding a market larger enough to be A) financially meaningful but B) small enough that a company can achieve at least 50% of market share among those customers. Pragmatist customers are seeking ‘the market leader’ no matter what that market might be – this group might be geographically defined, or psychographically defined, but the critical point is to define a small enough segment that you can dominate while still making meaningful financial gains. 

Many companies fail by trying to define their market too broadly: “We’ll target all of forestry with our innovative CDR solution!” is, for a startup, an impossible task. Venture investors do like a 10-year ‘hockey stick’ growth curve showing how the company (and its investors) could be zillionaires…in 2037; but they also really like a startup who shows how the initial, well-defined, smaller market segment will get the company through the next 2-3 years. Defining and dominating a tiny segment of the market and getting your business started among mainstream customers in that group is a way to win.

Examples: Carbicrete is manufacturing cast concrete pieces using CO2 as a feedstock. It would be one thing if they were to target “all concrete producers” – a daunting task. Rather, they fixate on a specific starting point that would likely yield success, and then build from that initial group of customers in which the solution you provide is the dominant one.  Example 2: Goal300 is targeting Christmas Tree farms in the Pacific Northwest as customers who would apply enhanced rock weathering to soils. It’s a specific type of customer, who has a customized set of needs, but large enough to get the business started to bridge later to a more mainstream market.

Generating reference customers through word of mouth is the goal here. One mainstream Pragmatist customer will talk to other Pragmatist customers about their product experience: as they are more risk averse relative to Visionary customers, they value the assurance of having another person’s opinion on a product before buying it. Cast concrete purchasers who speak to other cast concrete purchasers. Christmas Tree farmers who talk to other Christmas Tree farmers in a particular region. 

Talk to a variety of customers in different segments when thinking through which one to target. And also listen for the needs of various internal stakeholders within that customer company (more on this coming up in Part ‘B’ below!).

A great way for such customer discovery is to attend the industry conference for that particular customer segment! Learn who they talk to, and how they relate to each other, and what their common needs are. Because insofar as a market exists, it moves at the speed of word of mouth from reference customer to reference customer, building momentum for success among the first mainstream segment to target, so that the product can get adopted by other segments after establishing itself as the market leader in that initial ‘beachhead’ segment.

B: Figure out how to satisfy three crucial stakeholder roles in your target customer. 

Those influencers within the customer entity, per Moore, are:

1. 1. 1. The end-user: who uses the product you sell
      2. The technical buyer: who evaluates the qualifications of your product
      3. The economic buyer: who provides the financial resource to pay for the product

To illustrate, I’ll use the best non-climate example from my professional experience in pharmaceuticals:

• • • The end-user is the patient, who uses the product to combat a disease
    • The technical buyer would be the physician prescribing the pharmaceutical, based on their expert evaluation of the attributes of the product
    • The economic buyer is the private or government insurance company – a ‘Payer’ in pharma industry terms – or in some cases the patient themself who pays for the pharmaceutical intervention.

For durable CDR companies in a voluntary carbon market, the end user could be the corporate sustainability professional who uses the carbon removal credit to report on the Net Zero goal achieved through offsetting (or insetting). The carbon removal purchase itself serves a useful purpose to that individual.

The technical evaluator could be an outside consultancy or internal group of technical people hired for the purpose of understanding the project(s) in play. Unlike pharmaceuticals, there’s no state-mandated licensure for prescribing CDR tonnage! A select few companies have large numbers of in-house technical staff who evaluate CDR projects as they come in. Most mainstream companies will not have these resources, and as such would rely on an intermediary, such as a marketplace, broker, or consultancy to provide that technical diligence. 

The economic buyer is typically the Finance department, where price for tonnage would be paramount relative to other projects that are recommended by the sustainability department – and external or internal evaluation teams. As I wrote previously, one way to convince a CFO is to demonstrate tangible economic value by pursuing the carbon removal project. Bundling the CDR credit through insetting with a physical product, or otherwise selling the physical product of carbon removing activity alongside a separate unbundled offset represents a revenue-generating prospect for the CDR company who can sell a physical product while removing excess atmospheric greenhouse gas. Note that there are many different types of projects, and not just offset projects, that the end-users and technical buyers would recommend. So valorizing the ROI is a pathway to be persuasive to the economic buyer audience, per CDR.FYI’s 2025 Market Survey.¹

C. Market the whole product, not just the core product

An early stage Visionary buyer typically has performance expectations for the core product itself, and is willing to forego the supportive services that would make the purchase easier to handle. Pragmatist customers’ view is the opposite: they need surrounding product or service offerings that make the purchase easy to integrate into their existing business. 

For a Pragmatic class of CDR customers this could mean: insurance services, credit ratings, or even marketing materials that enable the sustainability office to feature the project in an ESG report. 

In particular, one big concern among Pragmatist customers is that the CDR supplier will go out of business, leaving them with an unsupported amount of CDR tons that they would have to answer questions about. Demonstrating post-sale customer support and contingencies would address this risk. 

Selling a ‘whole product’ could also mean working with a broker or other intermediary who would package the durable CDR credit with other credit types, such as lower priced nature-based carbon removal, avoidance/REDD+/Renewable Energy offsets, or industrial waste gas destruction credits. That would lower the average price per ton of the entire ‘market basket’ while providing different qualities of offset to the buyer. Rather than competing for a vanishingly small attention span for CDR, the offset would be considered alongside other types of projects on offer for a Sustainability office.

So how can a CDR project developer start to make the leap?

While these three tactical suggestions could be useful for durable CDR companies to make inroads into a market of Pragmatists, the greater issue could be making the internal leap of faith required to adjust to these market forces.

The thinking surrounding pursuit of an early stage customer – heaving a technically less polished, core product over a RFP Visionary transom and, well, praying – is not a strategy that would work to gain market traction among Pragmatists. Adjusting one’s own approach to understand the mindset of the mainstream customer, respect their needs and motivations, and meeting them where they are at will be the way to success. That’s why identifying that one small niche of a Pragmatist market is so important.

Oftentimes in other industries this has meant that the visionary startup founder does not have the skills or interest to speak on equal terms to an otherwise risk-averse customer. Visionaries are great at speaking with other visionaries; pragmatists with pragmatists. So it follows that bringing in new talent to meet broader mainstream needs might have the uncomfortable task of replacing a founder for the sake of company survival.

Getting across a Chasm is not an easy task. But, a necessary one in order for an early stage company to achieve its potential. In carbon removal the results can be worldchanging, provided the durable CDR company has the right tools and, more importantly, internal mindset to adjust and make the leap. It’s a challenge to be sure but one that is possible to achieve.

Jason Grillo is the Principal of Earthlight Enterprises marketing consultancy, Co-Founded AirMiners, and is a voluntary contributor to CDR.FYI. The opinions expressed in this writing are the author’s own and do not reflect the position of any employer or associated organization.

¹Disclosure: I was a voluntary contributor to help that effort.