Operational playbook: scaling Carbon removal procurement & offtakes from pilot to rollout

In the first half of 2025, carbon dioxide removal (CDR) offtake agreements reached 61.5 million tonnes of CO₂ equivalent—a volume that exceeded the entire 2024 annual total within just two quarters (CDR.fyi, 2025). Microsoft alone contracted 56.3 million tonnes during this period, representing 91% of all offtake activity, while the Frontier coalition deployed $279 million across 52 carbon removal projects since its 2022 inception. Yet beneath these headline figures lies a stark operational reality: actual deliveries against contracted volumes remain at approximately 12% historically, and the weighted average cost of durable carbon removal sits between $450–600 per tonne. For sustainability leaders navigating the transition from pilot programmes to enterprise-scale procurement, this playbook distils the implementation trade-offs, stakeholder alignment strategies, and hidden bottlenecks that determine whether carbon removal commitments translate into verified tonnes removed from the atmosphere.

Why It Matters

The Intergovernmental Panel on Climate Change's Sixth Assessment Report established that limiting global warming to 1.5°C requires between 6 and 16 gigatonnes of annual carbon dioxide removal by 2050—a scale three orders of magnitude beyond current operational capacity. As of late 2024, global CDR capacity across all technologies totalled approximately 2 million tonnes annually, with direct air capture contributing just 0.01 million tonnes (Carbon Direct, 2024). This supply-demand gap creates the central challenge for procurement professionals: how to catalyse an emerging industry toward gigatonne scale while maintaining fiduciary responsibility and regulatory compliance.

The regulatory landscape has shifted materially. The SEC's climate disclosure rules, while narrowed from initial proposals, require public companies to disclose material climate-related risks and, for large accelerated filers, Scope 1 and 2 emissions with attestation requirements. The European Union's Corporate Sustainability Reporting Directive (CSRD) mandates disclosure of transition plans including carbon removal strategies. These requirements transform carbon removal from a voluntary initiative into an auditable component of corporate strategy—procurement decisions now carry disclosure and liability implications.

Market concentration remains extreme. CDR.fyi tracked that Microsoft captured 80% of high-durability CDR pre-purchases in 2024, with the top 10 buyers accounting for 78% of all committed volume. For procurement teams outside the technology sector, navigating this landscape requires frameworks that translate climate science requirements into commercial specifications while competing for limited supply.

The unit economics present a stepwise challenge that procurement teams must understand:

CDR Technology Category	Cost Range ($/tonne)	Durability	Delivery Readiness
Direct Air Capture	$600–1,200	>10,000 years	Limited (36,000 t/yr capacity)
Enhanced Weathering	$100–250	>1,000 years	Scaling (first verified credits 2025)
BECCS (Bioenergy with CCS)	$150–300	>1,000 years	Project-dependent
Biochar	$80–200	100–1,000 years	Commercially available
Bio-oil Injection	$200–350	>1,000 years	Proven delivery track record
Ocean Alkalinity Enhancement	$100–400	>10,000 years	Nascent MRV protocols

Key Concepts

Advance Market Commitments (AMCs): The procurement mechanism that has proven most effective at accelerating CDR supply development. An AMC commits buyers to purchasing future output at predetermined prices before facilities are constructed, effectively transferring offtake risk from project developers to buyers. The Frontier coalition pioneered this approach in the CDR sector, committing over $1 billion through 2030 across founding members including Stripe, Alphabet, Meta, McKinsey, and Shopify. Analysis of Frontier's portfolio demonstrates that 85% of contracted volume originates from pre-commercial facilities that closed financing within 12 months of offtake agreement execution (Frontier Climate, 2024). For procurement leaders, AMC participation offers first-mover pricing advantages, shapes product specifications toward buyer requirements, and provides commercial validation that attracts follow-on financing to suppliers.

Portfolio Construction and Durability Tiers: Organisations achieving both volume targets and risk management have adopted diversified CDR portfolios spanning technology readiness levels and permanence classifications. Durability—the timeframe over which sequestered carbon remains isolated from the atmosphere—varies significantly by technology: geological storage offers permanence exceeding 10,000 years; enhanced weathering delivers 1,000+ years through mineral carbonation; biochar provides 100–1,000 years depending on application context; forestry faces reversal risks from fire, disease, and land-use change with effective durability of 20–100 years. The Integrity Council for Voluntary Carbon Markets (ICVCM) Core Carbon Principles establish durability tiers that increasingly influence credit valuation and regulatory acceptance. Frontier's requirement for greater than 1,000-year durability explicitly excludes forestry-based solutions from their procurement pool, focusing capital on engineered removal pathways.

Measurement, Reporting, and Verification (MRV): The protocols enabling quantification of actual carbon removed and stored. MRV encompasses continuous or periodic monitoring of storage integrity, standardised disclosure of volumes and methodologies, and third-party attestation of claims. The CDR MRV landscape remains fragmented across technology-specific approaches: direct air capture facilities meter CO₂ flows directly; biochar projects use sampling and spectroscopy; enhanced weathering relies on geochemical modelling validated by field measurements. For procurement, MRV capability determines audit defensibility under SEC and CSRD disclosure requirements. Independent verification pathways from Isometric, Puro.earth, and the Carbon Business Council provide credible attestation, though protocol fragmentation means procurement teams must specify MRV requirements contractually rather than assuming market-standard practices.

Delivery Risk and Contract Structuring: Across the Frontier portfolio and broader market, actual tonnes delivered through 2024 reached only 12% of contracted volume—a delivery gap stemming from engineering delays at novel facilities, permitting bottlenecks averaging 24–36 months for US direct air capture projects, and technology scaling challenges. Procurement teams must structure contracts with realistic delivery schedules, price escalation provisions tied to delays, milestone payments linked to construction progress rather than output delivery, and alternative sourcing rights when primary suppliers underperform. Oversubscription strategies—contracting 4–5× target volume to account for attrition—have emerged as standard practice among sophisticated buyers.

What's Working and What Isn't

What's Working

Coalition-Based Procurement Reduces Transaction Costs: The Frontier model demonstrates that collective buyer action can reduce per-buyer diligence costs by 70–80% while aggregating demand signals that shape supplier development. With 60+ expert reviewers assessing technology pathways, individual member companies access evaluation infrastructure impossible to replicate internally. The coalition structure includes risk pooling (if one member defaults, others absorb pro-rata allocation), shared technical diligence (one assessment per supplier regardless of buyer count), and coordinated supplier engagement through quarterly reviews. As of December 2024, Frontier has contracted $713 million in offtake agreements covering approximately 1.9 million tonnes of removal.

Technology-Agnostic Portfolio Approaches Hedge Deployment Risk: Swiss Re's carbon removal programme applies actuarial frameworks to CDR, constructing portfolios targeting 60% high-permanence engineered removal, 30% enhanced weathering, and 10% vetted biochar. This diversification hedges against technology-specific deployment delays—direct air capture projects have averaged 18-month schedule slippages—while capturing cost improvement curves as technologies mature. Portfolio rebalancing quarterly based on supplier delivery performance provides operational flexibility absent from single-supplier contracts.

Standardised Contracting Frameworks Accelerate Execution: The Chancery Lane Climate Contracting Clauses and model contracts from the Carbon Removal Alliance have reduced transaction costs by 40–60% for repeat buyers. Standardised terms addressing delivery shortfall remedies, MRV obligations, permanence warranties, and force majeure provisions enable procurement teams to evaluate suppliers on substance rather than negotiating bespoke legal structures. The emergence of carbon removal-specific insurance products covering delivery risk and reversal liability builds on this standardisation.

Linking Removal to Residual Emissions Establishes Credibility: Leading buyers have tied carbon removal procurement to measured residual emissions after maximum feasible reductions, positioning removal as complement rather than substitute for decarbonisation. This framing aligns with the Science Based Targets initiative's Corporate Net-Zero Standard and pre-empts criticism of removal as offset greenwashing.

What's Not Working

Volume Delivery Remains the Critical Gap: The 12% historical delivery rate against contracted volumes complicates emissions accounting and disclosure timelines. Pre-commercial technology procurement inherently carries construction and scaling risks that cannot be eliminated through contract structure alone. Procurement teams must model delivery probability distributions rather than point estimates, build contingency sourcing into programmes, and set internal accounting policies for recognising contracted versus delivered removal.

Price Discovery Challenges in Thin Markets: With fewer than 500 disclosed transactions globally, carbon removal lacks liquidity for transparent price formation. Reported prices range from $50 per tonne for biomass burial to $1,200 per tonne for direct air capture, with actual transaction prices varying ±30% based on durability specifications, volume commitments, and payment timing. Procurement benchmarking against published market prices proves unreliable; buyers must develop internal cost models based on technology fundamentals.

MRV Fragmentation Creates Due Diligence Burden: While third-party registries provide project-level verification, no standardised rapid-assessment methodology exists for procurement teams evaluating dozens of potential suppliers. Typical supplier evaluation requires 40–80 hours of technical and commercial review, creating barriers for procurement teams lacking specialised carbon expertise.

Regulatory Treatment Remains Unsettled: How procured carbon removal interacts with emerging compliance obligations remains unclear. California's cap-and-trade programme excludes engineered removal from offset eligibility; the EU Emissions Trading System has no current CDR integration pathway. This regulatory fragmentation prevents confident structuring of purchases for dual voluntary and compliance purposes.

Key Players

Established Leaders

Microsoft has committed to becoming carbon negative by 2030, allocating over $200 million annually to carbon removal procurement since 2021. Through 2025, Microsoft has contracted over 8.2 million tonnes from 25+ suppliers spanning direct air capture, biochar, enhanced weathering, and BECCS. Their published methodology documentation, including per-technology cost curves and permanence assessment frameworks, has become an open-source resource for corporate procurement. In H1 2025 alone, Microsoft contracted 56.3 million tonnes, including a 7 million tonne deal with Chestnut and 6.75 million tonnes from AtmosClear.

Frontier Climate operates as a public benefit subsidiary of Stripe, coordinating advance market commitments from founding members Alphabet, Meta, McKinsey, Shopify, and H&M Group. Through 2024, Frontier deployed $279 million across 52 suppliers, prioritising technologies with greater than 1,000-year durability at pre-commercial stages where offtake commitments most effectively derisk project financing. Their published supplier assessments provide the most transparent view into corporate CDR due diligence.

Swiss Re has integrated carbon removal into actuarial-informed climate strategy, procuring 15,000+ tonnes annually through portfolios balancing permanence tiers. Their risk quantification frameworks—modelling permanence as probability distributions and applying Value-at-Risk approaches—have introduced insurance industry rigour to removal procurement.

Emerging Startups

Climeworks operates the world's largest direct air capture facilities, including the Orca plant in Iceland (4,000 tonnes/year) and the Mammoth plant (36,000 tonnes/year, operational 2024). Per-tonne pricing has declined from $1,100 in 2022 to $600–800 projected for 2025 through engineering iteration. Microsoft and Frontier contracts underpin major facility financing.

Vaulted Deep has emerged as a leading durable CDR supplier, executing a 4.9 million tonne deal with Microsoft in Q3 2025—the second-largest Microsoft CDR deal ever recorded. Their bio-waste geological injection technology has achieved consistent delivery against contracted volumes.

Heirloom Carbon operates enhanced weathering using limestone-based direct air capture, with costs projected below $150 per tonne at commercial scale. Their passive mineralisation process requires 80% less energy input than conventional DAC. Frontier's offtake contract enabled their first commercial facility in Tracy, California.

Charm Industrial converts agricultural waste into bio-oil injected into geological storage, achieving removal at $200–350 per tonne with verified 1,000+ year durability. Charm's logistics-intensive model has achieved 85% on-time delivery versus the industry average of 40%, establishing them as a reliability benchmark.

Key Investors & Funders

Lowercarbon Capital, Chris Sacca's climate-focused venture firm, has invested $800+ million across CDR technology companies including Charm Industrial, Heirloom, and Running Tide. Their portfolio companies have received preferential Frontier allocation, linking venture backing to commercial traction.

Breakthrough Energy Ventures has invested in Climeworks, CarbonCapture Inc., and multiple enhanced weathering startups. Their 15-year fund life matches CDR technology development timelines, providing patient capital that typical 7–10 year VC funds cannot offer.

US Department of Energy represents the largest single capital source for engineered removal through the $3.5 billion Regional Direct Air Capture Hubs programme and $100+ million in ARPA-E funding. Hub designations in South Texas, Louisiana, and California create geographic anchors for CDR supply chains with subsidised pricing opportunities for proximate buyers.

Examples

1. Frontier's Collective Procurement Model: When Frontier launched in 2022, founding members committed $925 million over nine years—an unprecedented demand signal for a nascent industry. The coalition's structure reduced individual buyer risk while aggregating purchasing power. By December 2024, Frontier had contracted with suppliers including Charm Industrial ($53 million for 112,000 tonnes), Heirloom/CarbonCapture ($46.6 million for 72,000 tonnes), and Lithos Carbon ($57.1 million for 154,240 tonnes of enhanced weathering). The model's innovation—collective diligence, shared risk, and coordinated engagement—has become a template for industry buyers lacking internal CDR expertise.

2. Microsoft's Portfolio Approach: Microsoft's carbon removal programme demonstrates scaled portfolio construction. Their 2024 procurement allocated 70% to nature-based solutions addressing near-term volume needs and 30% to engineered removal building long-term permanence. Delivery experience revealed that nature-based suppliers achieved 95% delivery while engineered removal suppliers delivered 8% of contracted volume through 2024. This informed their 2025 pivot toward BECCS and geological sequestration, evidenced by the 10 million tonne AtmosClear BECCS contract and expanded enhanced weathering allocations.

3. InPlanet's Verified Enhanced Rock Weathering: Brazilian startup InPlanet achieved the world's first independently verified enhanced rock weathering credits in January 2025, with Isometric certifying 235.53 credits from their 12,000+ hectare operations. Microsoft subsequently contracted for 28,500 tonnes of removal through InPlanet's crushed basalt application on agricultural land. This example demonstrates how procurement commitments can accelerate MRV protocol development and create replicable verification pathways for emerging CDR technologies.

Action Checklist

• Conduct residual emissions analysis to quantify removal volumes required after maximum feasible reduction, establishing purchase magnitude and timeline aligned with disclosure obligations
• Establish durability policy specifying minimum permanence thresholds (e.g., 100+ years, 1,000+ years) based on regulatory framework requirements and internal risk tolerance
• Evaluate coalition membership options (Frontier, First Movers Coalition) to access shared diligence infrastructure and preferential deal flow
• Develop technology-diversified portfolio strategy allocating across durability tiers and technology readiness levels to hedge deployment risk
• Structure contracts with milestone payments, delivery bonds, oversubscription provisions, and alternative sourcing rights to manage delivery risk
• Specify MRV requirements contractually, including third-party verification standards, monitoring protocols, and audit rights
• Integrate removal procurement with Scope 3 supply chain decarbonisation to position removal as complement rather than substitute for reduction

FAQ

Q: What is the minimum viable budget to launch a carbon removal procurement programme? A: Entry-level participation in collective procurement vehicles like Frontier's Stripe Climate pathway enables businesses to allocate as little as 0.5% of revenue toward CDR purchases. For direct procurement, meaningful portfolio construction typically requires $500,000–$2 million annually to access diverse supplier relationships and negotiate reasonable per-tonne pricing. Microsoft's programme operates at $200 million annually with approximately $8 million in operational costs supporting a 12-person team.

Q: How should organisations handle the delivery gap between contracted and delivered volumes? A: Sophisticated buyers employ oversubscription strategies, contracting 4–5× target volume to account for expected attrition and delays. Portfolio diversification across technology readiness levels provides delivery probability hedging. Contracts should include milestone payments tied to construction progress, delivery bonds or parent guarantees from pre-revenue suppliers, and alternative sourcing rights triggered by underperformance thresholds. Internal accounting policies should distinguish between contracted volumes (forward commitments) and delivered volumes (verified removal).

Q: Which CDR technologies offer the best value proposition for procurement in 2025–2027? A: Enhanced weathering and biochar currently offer the most attractive cost-durability tradeoff for volume procurement, with verified removal at $80–250 per tonne and 100–1,000+ year permanence. Bio-oil injection (Charm Industrial model) provides proven delivery reliability at $200–350 per tonne. Direct air capture remains essential for portfolio permanence certainty but at $600+ per tonne should comprise 10–20% of allocations. BECCS projects reaching final investment decision in 2025 (Stockholm Exergi, Gaia ProjectCo) may offer competitive pricing at scale.

Q: How do SEC climate disclosure rules affect carbon removal procurement decisions? A: SEC rules require climate disclosures to meet materiality and accuracy standards equivalent to financial reporting. Procured removals lacking robust MRV documentation create liability exposure. Procurement specifications should mandate third-party verification through recognised registries (Isometric, Puro.earth), contractual audit rights, and monitoring protocols that satisfy attestation requirements. The distinction between contracted versus delivered volumes has disclosure implications—forward commitments are not equivalent to realised removal.

Q: What role should government offtake programmes play in procurement strategy? A: Government programmes in the UK, Sweden, and through the US DOE Regional Hubs are creating anchor demand that reduces supplier risk and may enable preferential pricing for private buyers in adjacent allocations. Procurement teams should monitor hub-proximate suppliers for subsidised pricing opportunities and consider blended public-private procurement structures. Government offtake participation also provides regulatory credibility that may influence future compliance framework treatment of CDR.

Sources

• CDR.fyi. (2025). 2025 Q3 Durable CDR Market Update. Retrieved from https://www.cdr.fyi/blog/2025-q3-durable-cdr-market-update
• Carbon Direct. (2024). Ten Insights for Buyers from Our 2024 Voluntary Carbon Market Report. Retrieved from https://www.carbon-direct.com/insights
• Frontier Climate. (2024). Frontier's Carbon Removal Portfolio. Retrieved from https://frontierclimate.com/portfolio
• Fastmarkets. (2025). CDR Offtakes Reach 61.5 Million tCO2e in H1; Tech Giants Continue to Drive Demand. Retrieved from https://www.fastmarkets.com/insights
• IPCC. (2022). Climate Change 2022: Mitigation of Climate Change. Working Group III Contribution to the Sixth Assessment Report.
• Integrity Council for the Voluntary Carbon Market. (2023). Core Carbon Principles. Retrieved from https://icvcm.org
• Precedence Research. (2024). Carbon Dioxide Removal Market Size 2025 to 2034. Retrieved from https://www.precedenceresearch.com/carbon-dioxide-removal-market
• Science Based Targets initiative. (2023). Corporate Net-Zero Standard. Retrieved from https://sciencebasedtargets.org