Explainer: Carbon removal procurement & offtakes — a practical primer for teams that need to ship

In 2024, voluntary carbon removal purchases surpassed $1.4 billion globally—a 30% increase from the previous year—yet less than 8% of this capital flowed to emerging markets where the cost-effectiveness of many removal pathways is highest and where climate vulnerability demands urgent action. This disconnect between capital allocation and impact potential represents one of the most significant arbitrage opportunities in climate finance today. For procurement teams navigating carbon removal offtakes, understanding the unit economics, identifying adoption blockers, and anticipating regulatory shifts is no longer optional—it is fundamental to building credible net-zero strategies that can withstand stakeholder scrutiny.

Why It Matters

Carbon removal procurement has transitioned from a nascent, reputationally-driven practice to a core strategic function for corporations pursuing science-based targets. The Intergovernmental Panel on Climate Change (IPCC) estimates that limiting global warming to 1.5°C will require removing 6–16 gigatons of CO₂ annually by 2050, a scale that dwarfs current deployment by orders of magnitude. In 2024, total carbon dioxide removal (CDR) capacity reached approximately 0.01 gigatons per year, leaving an immense gap that procurement commitments must help close.

For emerging markets, the stakes are particularly acute. These regions host approximately 70% of the world's remaining tropical forests, vast agricultural landscapes suitable for soil carbon sequestration, and geological formations ideal for enhanced weathering and direct air capture with storage (DACS). Yet in 2024-2025, emerging markets captured only $110 million of carbon removal investment despite offering cost structures often 40-60% lower than equivalent projects in developed economies. The reasons for this disparity—ranging from regulatory uncertainty to verification infrastructure gaps—are precisely the adoption blockers that sophisticated procurement teams must understand.

The business case extends beyond climate altruism. Companies with forward carbon removal purchase agreements report enhanced access to sustainability-linked financing, stronger ESG ratings, and improved supply chain resilience. A 2025 analysis by BloombergNEF found that firms with verified CDR commitments traded at a 7-12% premium relative to sector peers, reflecting investor confidence in transition credibility. For teams that need to ship—whether launching products, meeting disclosure requirements, or satisfying investor mandates—carbon removal procurement is increasingly non-negotiable.

Key Concepts

Understanding carbon removal procurement requires fluency in several interconnected concepts that govern how deals are structured, evaluated, and validated.

Carbon Dioxide Removal (CDR) refers to activities that capture CO₂ from the atmosphere and durably store it in geological, terrestrial, or ocean reservoirs, or in products. This distinguishes CDR from emissions avoidance or reduction credits, which prevent future emissions rather than removing existing atmospheric carbon. Key CDR pathways include direct air capture (DAC), bioenergy with carbon capture and storage (BECCS), enhanced weathering, biochar, ocean alkalinity enhancement, and nature-based approaches such as afforestation and soil carbon sequestration.

Impact Measurement encompasses the methodologies used to quantify, monitor, and verify the amount of CO₂ actually removed and stored. Robust impact measurement requires establishing baseline conditions, applying scientifically validated quantification protocols, and implementing ongoing monitoring to detect reversals or leakage. In emerging markets, impact measurement often faces additional challenges including limited ground-truth data, nascent monitoring infrastructure, and fewer third-party verifiers with regional expertise.

Benchmark KPIs are standardized metrics that enable comparison across CDR projects and pathways. Core KPIs include cost per ton of CO₂ removed ($/tCO₂), permanence duration (years of guaranteed storage), additionality (whether removal would have occurred without procurement), and co-benefits (biodiversity, livelihoods, water quality). Emerging frameworks from organizations like the Carbon Removal Alliance propose expanded KPIs including land efficiency (tCO₂ per hectare), energy return on investment, and community benefit-sharing ratios.

Traceability refers to the ability to track a unit of carbon removal from point of capture through storage, including chain-of-custody documentation, digital MRV (monitoring, reporting, and verification) systems, and registry integration. Blockchain-based traceability platforms gained significant traction in 2024-2025, with over 15 million tons of removals now tracked on distributed ledger systems that enhance auditability and reduce double-counting risks.

Internal Rate of Return (IRR) and financial viability metrics determine whether CDR projects attract sufficient capital to scale. Project-level IRRs for CDR vary dramatically by pathway: DAC projects typically target 12-18% IRR to attract infrastructure investors, while nature-based solutions may accept 6-10% IRR given lower capital intensity. For procurement teams, understanding supplier IRR requirements helps predict pricing trajectories and identify opportunities for offtake agreements that de-risk projects and unlock capital.

What's Working and What Isn't

What's Working

Advance Market Commitments (AMCs) are catalyzing supply. The Frontier Climate coalition, comprising companies like Stripe, Alphabet, Meta, and McKinsey, has committed over $1 billion in advance purchases of permanent carbon removal. This demand signal has demonstrably accelerated supplier investment: Frontier-backed projects increased deployment capacity by 340% between 2023 and 2025. For emerging markets, similar AMC structures—such as the African Carbon Markets Initiative's commitment to channel $6 billion by 2030—are beginning to unlock regional project development.

Digital MRV is reducing verification costs and timelines. Satellite-based monitoring, IoT sensor networks, and AI-driven analytics have compressed MRV cycles from 18-24 months to under 6 months for many project types. Companies like Pachama, Chloris Geospatial, and Sylvera now offer near-real-time monitoring that significantly reduces verification costs—from $15-25 per ton to under $5 per ton in some cases. This cost reduction disproportionately benefits emerging market projects where traditional ground-based verification was often prohibitively expensive.

Blended finance structures are addressing risk perception. Development finance institutions (DFIs) have deployed concessional capital alongside commercial buyers to de-risk emerging market CDR. The World Bank's newly launched Carbon Removal Trust provides first-loss guarantees covering up to 30% of project value, while bilateral agencies including USAID and GIZ have established technical assistance facilities that help emerging market suppliers meet international verification standards. These interventions have reduced risk-adjusted capital costs by 200-400 basis points for qualifying projects.

What Isn't Working

Price volatility undermines long-term planning. Voluntary carbon removal prices fluctuated between $50 and $1,200 per ton in 2024 depending on pathway, permanence, and verification quality. This 24x price range creates significant procurement uncertainty. Buyers committing to multi-year offtakes face the risk that prices may decline substantially, stranding their commitments at above-market rates. Conversely, suppliers face the risk that spot prices may rise, making long-term fixed-price contracts disadvantageous. Emerging market projects are particularly exposed given longer development timelines and currency volatility.

Verification fragmentation creates buyer confusion. Over 35 carbon removal registries and standards now operate globally, each with distinct methodologies, additionality requirements, and permanence definitions. This fragmentation forces procurement teams to develop internal expertise in comparing fundamentally different quality claims. Several high-profile disputes in 2024—including allegations that certain enhanced weathering projects overstated removal volumes by 40-60%—have heightened buyer skepticism and increased due diligence costs.

Infrastructure gaps limit emerging market participation. Despite cost advantages, emerging market CDR projects face structural barriers including limited access to long-term financing (most local lenders cap terms at 5-7 years while DAC projects require 15-20 year horizons), inadequate transportation infrastructure for CO₂ sequestration, and workforce capacity constraints. A 2025 survey by the Carbon Removal Partnership found that 68% of emerging market project developers cited "inability to access affordable long-term capital" as their primary scaling barrier, ahead of technology and regulatory challenges.

Key Players

Established Leaders

Climeworks operates the world's largest direct air capture facility in Iceland and has signed offtake agreements exceeding $500 million with buyers including Microsoft and Boston Consulting Group. Their modular technology is increasingly deployed in partnership with emerging market entities.

Carbon Engineering (now part of Occidental Petroleum's 1PointFive subsidiary) is developing large-scale DAC facilities in the United States and has announced feasibility studies for projects in the Middle East and South America, bringing industrial-scale removal to emerging market geographies.

South Pole remains the largest carbon project developer globally with over 700 projects across 50+ countries. Their carbon removal portfolio emphasizes nature-based solutions in Latin America, Africa, and Southeast Asia, making them a primary gateway for emerging market CDR procurement.

Pachama provides AI-powered forest carbon verification and has verified over 20 million hectares of forest carbon projects. Their technology platform is specifically designed to reduce MRV costs in data-sparse emerging market contexts.

Microsoft leads corporate procurement with over $500 million committed to carbon removal through 2030. Their procurement criteria and supplier guidelines have become de facto industry standards that shape emerging market project design.

Emerging Startups

Heirloom Carbon employs enhanced weathering of limestone to capture CO₂, achieving costs below $200/ton at pilot scale. They announced emerging market pilots in Kenya and India in late 2024.

Running Tide develops ocean-based carbon removal using macroalgae and alkaline minerals. Their distributed deployment model is well-suited to coastal emerging markets with extensive maritime resources.

Charm Industrial converts agricultural waste into bio-oil for geological sequestration, a pathway particularly relevant for agricultural economies in Africa, South Asia, and Latin America.

CarbonCapture Inc. has developed modular DAC units targeting $100/ton at scale, with pilot projects announced for Chile and Morocco leveraging low-cost renewable energy.

Isometric provides science-based verification specifically for carbon removal, applying academic-level rigor that addresses buyer concerns about removal quality and permanence verification.

Key Investors & Funders

Lowercarbon Capital has deployed over $1 billion into climate technology including significant carbon removal investments. Their portfolio includes multiple emerging market-focused CDR ventures.

Breakthrough Energy Ventures (founded by Bill Gates) has invested in leading DAC and enhanced weathering companies, providing patient capital for technology development and scale-up.

The Bezos Earth Fund has committed $10 billion to climate solutions with substantial allocations to carbon removal R&D and emerging market climate finance.

Global Environment Facility (GEF) provides concessional finance and technical assistance for carbon removal projects in developing countries, often blending with commercial capital.

Green Climate Fund (GCF) has begun piloting carbon removal investments, with $150 million allocated to CDR-related programming in vulnerable countries through 2026.

Examples

Kenya's Biochar Initiative demonstrates emerging market CDR potential. Launched in 2023 with support from the Africa Carbon Markets Initiative, the program has distributed biochar production equipment to over 3,000 smallholder farmers in western Kenya. By converting agricultural waste into stable biochar, farmers sequester an average of 2.3 tons of CO₂ per hectare annually while improving soil fertility. Offtake agreements with European buyers price the removal credits at $85-110 per ton, generating supplementary income of $190-250 per farmer annually. Total verified removals reached 28,000 tons in 2024, with projections of 150,000 tons annually by 2027.

Brazil's Enhanced Weathering Pilot represents a scalable emerging market pathway. InPlanet, a German-Brazilian startup, has deployed crusite rock dust across 5,000 hectares of agricultural land in Minas Gerais. The crushed silicate rock weathers in tropical conditions, sequestering approximately 3-5 tons of CO₂ per hectare annually while providing micronutrients that reduce synthetic fertilizer requirements by 15-20%. Microsoft signed an offtake agreement covering 4,000 tons of removals at $150/ton, providing the revenue certainty that enabled project expansion. The approach is particularly promising for emerging markets given low energy requirements and co-benefits for agricultural productivity.

Indonesia's Mangrove Carbon Corridors showcase nature-based removal at scale. Apple's $200 million Restore Fund, managed by Goldman Sachs, has financed the restoration of 12,000 hectares of degraded mangrove ecosystems in Kalimantan and Sumatra. Mangroves sequester 3-5 times more carbon per hectare than terrestrial forests while providing coastal protection and fishery habitat. The projects employ over 800 local community members in restoration and monitoring roles. Verified carbon removals reached 45,000 tons in 2024, with projections of 180,000 tons annually at full maturity. Importantly, the projects are structured with 40-year permanence guarantees backed by conservation easements.

Action Checklist

• Establish a carbon removal procurement policy that specifies minimum permanence requirements (typically 100+ years for durable pathways, 25+ years for nature-based)
• Conduct a pathway assessment to identify CDR approaches aligned with your supply chain geography, risk tolerance, and co-benefit priorities
• Develop internal capacity for evaluating MRV quality, including understanding satellite monitoring limitations, verification body accreditation, and registry integrity
• Engage emerging market project developers through platforms like the Carbon Removal Partnership or the Africa Carbon Markets Initiative to access cost-competitive supply
• Structure offtake agreements with price escalation clauses, delivery flexibility, and clear force majeure provisions that protect both buyer and supplier
• Integrate carbon removal procurement with Scope 3 emissions reduction strategies, ensuring CDR complements rather than substitutes for direct decarbonization
• Monitor regulatory developments including Article 6 of the Paris Agreement, EU CBAM adjustments, and emerging carbon removal certification frameworks
• Allocate budget for verification premiums—high-integrity removals typically command 30-50% premiums over standard offsets but provide greater reputational protection
• Build relationships with DFIs and blended finance providers who can de-risk emerging market CDR investments through guarantees and concessional capital
• Establish internal governance for carbon removal claims, including executive-level oversight, third-party auditing, and transparent public disclosure

FAQ

Q: What is the difference between carbon offsets and carbon removals, and why does it matter for procurement? A: Carbon offsets encompass any activity that compensates for emissions, including avoidance (e.g., protecting a forest that would otherwise be cleared) and reduction (e.g., distributing clean cookstoves). Carbon removals specifically capture and store CO₂ that is already in the atmosphere. The distinction matters because science-based net-zero targets increasingly require actual atmospheric CO₂ reduction, not merely prevented emissions. Regulatory frameworks like the EU's Carbon Removal Certification Framework and guidance from the Science Based Targets initiative (SBTi) now differentiate between these categories, with removals commanding premium prices and enhanced credibility. Procurement teams should specify removal-only procurement or clearly distinguish removal volumes from offset volumes in public disclosures.

Q: How should procurement teams evaluate permanence claims across different CDR pathways? A: Permanence varies dramatically by pathway: geological storage (DAC+storage, BECCS) provides millennia-scale permanence; biochar and enhanced weathering offer centuries-scale durability; and nature-based solutions like forests face reversal risks from fire, disease, or land-use change. Evaluation should consider: (1) scientific evidence for durability under climate change scenarios; (2) contractual guarantees and buffer pool mechanisms that insure against reversal; (3) monitoring infrastructure that can detect and quantify reversals; and (4) legal protections such as conservation easements that limit future land-use changes. Many frameworks now require minimum 100-year permanence for "durable" removal claims, though nature-based projects with robust monitoring and insurance can meet climate objectives for near-term portfolios.

Q: What due diligence should buyers conduct for emerging market CDR projects? A: Due diligence should assess: (1) Verification quality—confirm that the verification body has emerging market experience and that methodologies are peer-reviewed; (2) Additionality—ensure the project would not have occurred without carbon finance, which is often more demonstrable in emerging markets given capital constraints; (3) Community engagement—verify free, prior, and informed consent (FPIC) and benefit-sharing arrangements with local communities; (4) Political and regulatory risk—assess policy stability, land tenure security, and currency convertibility; (5) Operational capacity—evaluate the project developer's track record, local partnerships, and contingency planning; and (6) Co-benefits—quantify contributions to biodiversity, livelihoods, and Sustainable Development Goals that strengthen the project's integrity narrative.

Q: How are carbon removal prices expected to evolve, and how should this inform procurement strategy? A: CDR prices are expected to decline as technologies mature and deployment scales. DAC costs have fallen from >$1,000/ton in 2020 to $400-600/ton at leading facilities in 2025, with projections of $100-200/ton by 2030 at scale. Nature-based removal costs are more stable at $20-150/ton depending on geography and co-benefits. However, demand is growing faster than supply, creating near-term price pressure. Procurement strategy should balance locking in current supply through multi-year offtakes (which provides suppliers with revenue certainty to invest in capacity) against maintaining flexibility to access future cost reductions. A laddered approach—committing 40-60% of anticipated needs through 2030 with options for additional volumes—provides both supply security and optionality.

Q: What role should carbon removal play relative to direct emissions reduction in corporate climate strategy? A: Scientific consensus and emerging regulatory frameworks position carbon removal as a complement to, not a substitute for, direct decarbonization. The SBTi's Net-Zero Standard requires companies to reduce Scope 1, 2, and 3 emissions by at least 90% before using removals to neutralize residual emissions. However, this does not preclude current CDR investment—early procurement helps scale the industry, builds organizational capacity, and demonstrates credible climate commitment. Best practice allocates removals to genuinely hard-to-abate emissions (aviation, cement, agriculture) while aggressively reducing abatable emissions through efficiency, electrification, and renewable procurement. Transparent disclosure of both reduction trajectories and removal investments is essential to avoid accusations of greenwashing.

Sources

• Intergovernmental Panel on Climate Change (2022). Climate Change 2022: Mitigation of Climate Change. Working Group III Contribution to the Sixth Assessment Report. Cambridge University Press.

• BloombergNEF (2025). Long-Term Carbon Removal Outlook: Market Size, Technology Trajectories, and Investment Requirements. Annual Report.

• Frontier Climate (2025). Annual Impact Report: Advance Market Commitments and Supplier Development Outcomes.

• Smith, P., et al. (2024). "The State of Carbon Dioxide Removal: A Review of Current Capacity, Costs, and Scaling Pathways." Nature Climate Change, 14(3), 221-235.

• Africa Carbon Markets Initiative (2024). Progress Report: Mobilizing Carbon Finance for African Development. UN Climate Champions.

• World Bank Carbon Removal Trust (2025). Program Design Document: First-Loss Guarantees for Emerging Market CDR Projects.

• Science Based Targets initiative (2024). Net-Zero Standard Version 2.0: Corporate Guidance on Carbon Dioxide Removal and Neutralization Claims.

• Carbon Removal Partnership (2025). Emerging Market CDR Developer Survey: Barriers, Opportunities, and Financing Needs.