Concentration of corporate demand in carbon removal markets

The global carbon removal market remains heavily shaped by the dominant purchasing power of a single corporate buyer—Microsoft—yet recent developments in market infrastructure signal emerging shifts that could influence its future trajectory.

Microsoft’s Overwhelming Market Concentration Persists

As previously reported, Microsoft continues to purchase approximately 93% of all carbon removal credits worldwide, an extraordinary concentration that effectively makes the company the linchpin of this nascent market. This outsized role has several ongoing implications:

• Market Dependence and Stability Risks: With Microsoft underwriting nearly the entire demand for carbon removal credits, the market’s health is precariously tied to its procurement decisions. Any reduction or strategic shift by Microsoft could destabilize suppliers and slow the sector’s growth.

• Pricing and Negotiation Power: Microsoft’s dominant position grants it significant leverage over pricing, which can shape the financial incentives for carbon removal projects and influence the pace of innovation and technology development.

• Barriers to Entry and Competition: The market concentration constrains other corporate buyers from participating at scale, possibly limiting competition and slowing diversification of supply and demand.

Emerging Market Infrastructure and Growing Transaction Volumes Beyond Microsoft

Despite this concentration, the carbon removal ecosystem is beginning to mature with the rise of marketplaces and intermediaries that facilitate broader transactions and improve market liquidity. A prominent example is Supercritical, a marketplace platform that has recently transacted the largest volumes of carbon dioxide removal (CDR) credits issued by Puro.earth for the second consecutive year.

• Supercritical’s Role: By enabling significant volumes of Puro.earth-delivered credits to change hands, Supercritical is expanding transactional activity beyond direct corporate purchases by Microsoft. This reflects a growing ecosystem where intermediaries and marketplaces increase transparency, accessibility, and efficiency.

• Market Expansion Signals: The activity on platforms like Supercritical suggests that other buyers and sellers are starting to participate, albeit at smaller scales compared to Microsoft’s dominant share. These developments represent early but promising steps toward diversifying demand sources and improving market liquidity.

Implications for the Carbon Removal Market’s Future

While Microsoft’s commitment remains critical to sustaining the market, these new developments underscore both the progress and challenges ahead:

• Need for Broader Corporate Engagement: To achieve sustainable scaling, the market must attract a wider base of buyers. Diverse demand will foster competition, encourage innovation, and reduce systemic risks linked to reliance on a single buyer.

• Importance of Marketplaces and Intermediaries: Platforms like Supercritical are key enablers for a more dynamic and accessible market. They help lower transaction costs, standardize credit quality, and create opportunities for smaller corporate buyers to enter the space.

• Continuing Concentration as a Vulnerability: Despite growing market infrastructure, the concentration of demand remains a central vulnerability. Stakeholders—including policymakers, project developers, and investors—must collaborate to incentivize diversified purchasing commitments and develop supportive frameworks.

In Summary

Microsoft’s overwhelming purchase of nearly all global carbon removal credits has jumpstarted the sector but also created a fragile market ecosystem heavily dependent on one buyer. The rise of intermediaries such as Supercritical, which has transacted the largest volumes of Puro.earth credits for the second year running, signals a maturing market infrastructure and modest diversification of transactions beyond Microsoft. However, the market’s future growth and resilience hinge on broadening corporate demand and fostering a competitive, liquid marketplace that can sustain scaling and innovation in carbon removal technologies. Without these shifts, the carbon removal market risks stagnation and instability despite its critical role in global climate mitigation efforts.