Sustainability Atlas
Biology & Biotechnology·10 min read··...

Myths vs. realities: Climate biotech: carbon-negative processes — what the evidence actually supports

Myths vs. realities, backed by recent evidence and practitioner experience. Focus on KPIs that matter, benchmark ranges, and what 'good' looks like in practice.

Opening stat hook: The biochar carbon removal market alone exploded from $14.6 million in 2022 to $181.5 million in 2024—a compound annual growth rate of 131.6%—while Microsoft has contracted over 46% of all biochar carbon credits purchased globally, signalling that corporate demand for verified carbon-negative processes is no longer theoretical (CDR.fyi, 2025).

Why It Matters

Climate biotech—the application of biological systems to capture, sequester, or convert atmospheric carbon dioxide into durable products—sits at the intersection of the bioeconomy revolution and the net-zero imperative. Unlike traditional carbon capture technologies that rely on energy-intensive mechanical and chemical processes, biological pathways leverage photosynthesis, fermentation, and enzymatic catalysis to achieve negative emissions at potentially lower operational expenditure (opex).

The global carbon dioxide removal (CDR) market reached between $655 million and $3.4 billion in 2024, depending on methodology, with projections suggesting growth to $25 billion by 2034 (InsightAce Analytic, 2024). The broader climate tech market is forecast to grow from $25–34 billion in 2024 to over $218 billion by 2033, with North America commanding a 37% market share (Precedence Research, 2024). Within this landscape, carbon-negative materials—including biochar, carbon-sequestering concrete, and bio-based polymers—represent a $7.2 billion market in 2022 growing at 15.6% CAGR toward $22.6 billion by 2030 (Verified Market Reports, 2024).

For the UK specifically, the government's commitment to integrate CDR fully into the Emissions Trading Scheme by 2029 positions the region as a regulatory pioneer. Germany, Switzerland, and Sweden have already begun backing CDR directly through public procurement and subsidy frameworks, creating a policy tailwind that advantages early movers in climate biotech.

Key Concepts

Carbon-Negative Processes Defined: A process is carbon-negative when it removes more CO₂ from the atmosphere than it emits across its entire lifecycle, verified through rigorous life-cycle assessment (LCA). This includes biochar production from agricultural waste, bioenergy with carbon capture and storage (BECCS), enhanced rock weathering using microbial processes, and fermentation pathways that convert CO₂ into durable chemicals or materials.

Biochar Carbon Removal (BCR): Biochar—pyrolyzed biomass—dominates the CDR market, accounting for 86% of CDR purchases by volume in 2024 (CDR.fyi, 2025). The material sequesters carbon for centuries when applied to soils while simultaneously improving agricultural productivity and water retention.

Biomanufacturing and Fermentation: Companies are engineering microorganisms to consume CO₂ or methane as feedstock, producing proteins, bioplastics, and chemicals. Precision fermentation has demonstrated viability at pilot scale, though commercial economics remain challenging at costs of $80–200 per tonne versus direct air capture (DAC) at $600–1,000+ per tonne.

Traceability and MRV: Measurement, reporting, and verification (MRV) frameworks are critical for establishing credibility in carbon markets. Digital MRV platforms using satellite imagery, IoT sensors, and blockchain-based traceability have emerged to address historical concerns about offset integrity.

KPIBenchmark RangeWhat "Good" Looks Like
Cost per tonne CO₂ removed$80–200 (biochar) vs $600–1,000+ (DAC)<$150/tonne for commercial viability
Carbon permanence100–1,000+ years>500 years for high-quality credits
LCA-verified negativityNet negative after Scope 1–3Third-party verified, ISO 14064-compliant
MRV accuracy±5–15% uncertainty<10% uncertainty preferred
Delivery rate (contracted vs. delivered)22% delivered of contracted (biochar, cumulative)>50% delivery indicates operational maturity
Opex as % of revenue40–60%<50% for sustainable unit economics

What's Working

Biochar Scaling Rapidly

The biochar sector has demonstrated genuine commercial traction. Between 2022 and Q2 2025, 3.04 million tonnes of biochar carbon removal were purchased globally, with 683,000 tonnes delivered and 330,000 tonnes retired (CDR.fyi, 2025). This delivery-to-purchase ratio of approximately 22% reflects the youth of the market, but acceleration is evident: Q1 2025 saw 780,000 credits contracted—a 122% year-over-year increase.

Example 1: Microsoft and Exomad Green — Microsoft signed a landmark 10-year agreement with Exomad Green for 1.24 million tonnes of biochar carbon removal, representing one of the largest corporate offtake agreements in the sector. This deal provides the demand signal that enables Exomad to finance capacity expansion across multiple production facilities.

Corporate Procurement Driving Scale

In the first half of 2025, CDR credit sales reached 16 million tonnes—the strongest start ever recorded. Notably, 50% of Q1 2025 buyers were first-time participants in the CDR market, indicating broadening corporate adoption beyond early leaders (Carbon Herald, 2025). Financial services firms now represent the most unique buyers by count, while technology companies command the highest purchase volumes (50+ million credits cumulatively).

Example 2: Stockholm Exergi BECCS Project — Microsoft contracted 5.08 million tonnes of CO₂ removal from Stockholm Exergi's bioenergy with carbon capture and storage facility. This project captures CO₂ from biomass combustion at a combined heat and power plant, injecting it into geological storage—demonstrating that BECCS can achieve commercial-scale operations when supported by long-term offtake agreements.

Policy Tailwinds Accelerating Adoption

The US Inflation Reduction Act provides up to 40% capital cost reduction through tax credits (45Q provisions), fundamentally altering project economics for BECCS and biochar facilities. The EU Fit-for-55 package mandates 4.3% annual emissions cap reductions, creating compliance-driven demand for CDR credits. The UK's 2029 ETS integration timeline provides regulatory certainty that de-risks investment.

What's Not Working

Delivery Bottlenecks

Despite explosive contract growth, the gap between purchased and delivered carbon removal remains a sector-wide challenge. Of 3.04 million tonnes purchased cumulatively, only 683,000 tonnes have been delivered—a 22% fulfilment rate (CDR.fyi, 2025). This reflects infrastructure constraints, feedstock logistics, and the time required to scale production.

Verification and Credibility Concerns

Historical carbon offset markets have suffered from quality scandals, including overcounting, non-additionality, and impermanence. While biotech-based CDR offers more measurable and durable removal than nature-based offsets, the industry must rigorously maintain MRV standards to preserve buyer confidence. Third-party verification remains inconsistent, with some registries applying looser methodologies than others.

Example 3: Enhanced Rock Weathering Milestone and Challenges — While enhanced rock weathering reached a milestone of 1 million tonnes delivered in 2024, scaling remains challenged by logistics costs and the need for distributed application across agricultural land. The technology's effectiveness varies significantly by soil type, climate, and rock mineralogy, requiring site-specific calibration that complicates standardisation.

Unit Economics at Scale

Precision fermentation and engineered microbial systems show laboratory promise but face substantial scale-up challenges. Enzymatic depolymerization achieving 90% PET recovery at 70°C represents a breakthrough, yet commercial facilities require significant capital expenditure and consistent feedstock supply chains that remain underdeveloped.

Key Players

Established Leaders

  • Microsoft — Largest purchaser of CDR credits globally (46% of biochar market), carbon-negative commitment by 2030, pioneering corporate procurement frameworks
  • CarbonCure Technologies — Injects CO₂ into concrete during mixing, deployed across 700+ plants globally, validated carbon savings of 150,000+ tonnes
  • Stockholm Exergi — Operating one of the world's largest BECCS facilities, contracted for 5+ million tonnes of removals
  • Charm Industrial — Converting agricultural waste into bio-oil for geological injection, one of Frontier's flagship offtake partners

Emerging Startups

  • Exomad Green — Biochar producer with 10-year Microsoft offtake, operating across multiple geographies
  • Vaulted Deep — Deep geological sequestration of organic waste, 4.9 million tonnes contracted with Microsoft
  • AtmosClear/Fidelis — BECCS operators in the 6+ million tonne offtake category
  • Loam Bio — Microbial soil carbon enhancement, agricultural applications at commercial pilot scale

Key Investors & Funders

  • Breakthrough Energy Ventures — Bill Gates-backed fund investing across CDR technologies including biochar and DAC
  • Frontier — Advance market commitment from Stripe, Google, Meta, and others, over $1 billion committed to CDR offtakes
  • Lowercarbon Capital — Climate-focused VC with significant exposure to carbon removal startups
  • UK Infrastructure Bank — Providing debt financing for domestic BECCS and biochar facilities

Action Checklist

  • Conduct LCA audit of current operations to identify carbon-negative opportunities in feedstock and waste streams
  • Evaluate biochar integration for agricultural or industrial applications where soil amendment co-benefits apply
  • Engage with MRV platform providers (e.g., Pachama, Sylvera, Isometric) to establish credible verification frameworks
  • Assess eligibility for IRA 45Q tax credits (US) or equivalent UK/EU incentive schemes
  • Initiate dialogue with CDR credit registries (Puro.earth, Gold Standard) for pre-registration of projects
  • Review procurement policies for voluntary carbon removal integration alongside reduction efforts
  • Establish internal carbon pricing mechanisms to drive adoption of carbon-negative inputs

FAQ

Q: How does biochar carbon removal compare to direct air capture on cost and permanence? A: Biochar costs $80–200 per tonne CO₂ versus $600–1,000+ for DAC, making it significantly more cost-effective today. Both achieve high permanence—biochar sequesters carbon for 100–1,000+ years when applied to soils, while DAC with geological storage achieves near-permanent sequestration. Biochar also delivers agricultural co-benefits (improved soil health, water retention), whereas DAC provides pure removal without secondary effects.

Q: What distinguishes high-quality carbon removal credits from low-quality offsets? A: High-quality removal credits demonstrate additionality (would not have occurred without the credit purchase), permanence (centuries of sequestration), accurate MRV with low uncertainty (<10%), and third-party verification under recognised standards (Puro.earth, ISO 14064). Low-quality offsets often rely on nature-based projects with reversibility risk, inflated baselines, or non-additional activities. Biological CDR with rigorous LCA and traceability occupies the premium tier.

Q: Is climate biotech scalable enough to matter for net-zero targets? A: The Intergovernmental Panel on Climate Change estimates that achieving 1.5°C requires removing 10–20 billion tonnes CO₂ annually by mid-century. Current CDR capacity delivers approximately 2–3 million tonnes annually—orders of magnitude below requirements. However, the 131% CAGR in biochar alone demonstrates rapid scaling potential. Corporate procurement commitments (Microsoft's 18 million tonnes with Rubicon Carbon) and policy frameworks (IRA, EU ETS integration) provide the demand signals necessary for continued exponential growth.

Q: How should organisations evaluate biotech CDR providers? A: Key evaluation criteria include verified carbon negativity through independent LCA, delivery track record (contracted vs. delivered ratios), MRV methodology transparency, registry certifications, financial stability to honour multi-year contracts, and co-benefit verification where applicable. Request detailed methodology documentation and third-party audit reports before committing to offtake agreements.

Q: What role does policy play in climate biotech commercialisation? A: Policy is decisive. The US IRA's 45Q credits reduce BECCS capital costs by up to 40%, transforming previously uneconomic projects into viable investments. The UK's 2029 ETS integration creates a regulated market for CDR credits, providing price certainty. EU mandates drive compliance-based procurement. Organisations should monitor regulatory developments closely and position for early compliance to secure preferential pricing and supply agreements before demand-driven competition intensifies.

Sources

Topics

biotech:carbonbioeconomyLCAtraceabilitybenchmark KPIsopex

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