Is carbon removal in trouble?

Microsoft, the undisputed kingpin of the carbon removal market, has reportedly paused new purchases of carbon removal credits, creating a crisis of confidence in the fledgling industry. The tech giant has single-handedly purchased an estimated 80% of all contracted carbon removal, making it the primary customer for technologies like direct air capture (DAC) and bioenergy with carbon capture (BECCS). This move, first reported by Heatmap News and Bloomberg, is linked to internal financial considerations and comes despite Microsoft's public pledge to become carbon-negative by 2030. Industry experts like Robert Höglund of CDR.fyi note Microsoft was crucial for getting large-scale projects off the ground, and its sudden shift leaves developers in limbo.

The pause exacerbates existing turmoil in the US carbon removal sector, which is already grappling with recent policy shifts and funding cuts. Microsoft's Chief Sustainability Officer, Melanie Nakagawa, stated the company is not permanently closing its program but may "adjust the pace" of procurement. However, with Microsoft's own emissions rising 23.4% since 2020, the pause raises questions about the viability of corporate-led climate action. Wil Burns of American University's Institute for Responsible Carbon Removal criticized the move as "extremely irresponsible," arguing that a company positioning itself as a paragon of the industry has a duty to provide clarity. The incident highlights the sector's fragile dependence on a few major tech buyers and the unresolved challenge of creating a sustainable economic model for pulling carbon from the atmosphere.