May 23, 2024What's Next For Carbon Removal?2023 was marked as the hottest year on record for both the land and ocean. With average temperatures in 2023 now nearly 1.5 degrees warmer than pre-industrial temperatures, we are faced with the intensifying urgency to address the climate crisis. Alongside the continued calls for rapid decarbonisation and transitioning away from fossil fuels, Carbon Dioxide Removal (CDR) will be imperative in keeping warming below 2 degrees.By Poppy Russell

At Counteract, investing in the technologies that will shape the future of the Carbon Dioxide Removal industry is our north star, and each year feels more important than the last. Luckily, the industry is attracting incredible talent, and each year we see creative new solutions, technology iterations, and strategic business models for building the next generation of CDR companies.

Reflecting on 2023, the CDR industry made steps forward but also encountered new challenges:

  • Sales of durable CDR increased 5 fold amounting to 5.3Mt CO2 and deliveries also saw a notable rise, nearly doubling to 170 kt CO2.¹ This marks significant progress, yet it represents a tiny fraction of the 6-10Gt CDR per year required by 2050.

  • The climate investment landscape experienced a downturn. Carbon removal startups received over $1.2 billion, which represents a decrease by ~45% compared to 2022. However, analysis by PWC shows CDR is the only category of climate tech to see an absolute rise in investment over the past two years. Carbon removals represent only ~4% of all climate tech investments.

  • Carbon removals currently represent just 3% of the voluntary carbon market. However, while the emissions reduction credits in the voluntary market are stagnating, the removals credits have grown fivefold in the last two years, now standing at 15.1MtCO2².

  • Demand is expect to far outstrip supply according to a report from BCG. Demand for carbon removals could reach 40–200 million tons (Mt CO2) in 2030, whereas carbon removal projects are estimated to supply 15–32 Mt CO2.

  • 2023 marked the start of substantial forward purchase agreements, with leaders like Microsoft, Frontier, Airbus and other committing to over 6 MtCO2.

  • Counteract broadened its investment portfolio with six new companies. These span across CDR pathways including alkalinity enhancement, CO2 storage, efficient direct air capture, and carbon removal materials.

Looking back at last year, some of the key innovation areas that we focused our attention to included:

Low Impact Direct Air Capture (DAC). We believe that resource efficient DAC with lowest energy consumption will have a clear competitive advantage as the world decarbonises and there is increasing competition for low carbon energy (more thoughts here). Last year we saw advancements in electrochemical DAC moving closer to the theoretical minimum energy requirement, with line of sight to 300 kWh/tCO2.

Lots of rocks. Alkalinity plays a fundamental role in driving carbon removal, and fortunately, the Earth has an abundance of natural and waste alkaline minerals. The scientific community are making necessary steps to develop a robust monitoring and empirical frameworks for monitoring, reporting and verification of CDR rates³. For us, the critical question for 2023 was finding the most cost-efficient deployment methods, be it in soils, rivers, reactors, or oceans.

Peatlands covering just 2% of the Earth’s land surface, store 25% of it's soil carbon, making them the world's most carbon dense ecosystem. However, many of our peatlands have been drained for agriculture and now contribute to 5% of global emissions. We’ve been delving into how paludiculture (farming on rewetted peatlands) can be used to keep these areas productive and profitable for farmers, while turning them back to carbon sinksand benefiting from the wide range of ecosystem services⁴ .

We started thinking seriously about methane removal. Methane is a potent greenhouse gas, with a global warming potential 28-34 times that of CO2. This means reducing or removing methane can have a dramatic short term impact on warming, helping to a proportionally larger impact on shorter term warming goals. However, at only 2 ppm, it is 200 times more dilute in the atmosphere. We began exploring direct catalysis in methane hotspots and atmospheric methane reduction strategies. The field is in its early stages, with a need for more efficient catalysts and a better understanding of atmospheric feedback loops before deploying atmospheric methane reduction strategies safely.

As we look ahead into 2024, some of the team at Counteract provide their view on the next wave of CDR trends a solution spaces they are keeping an eye on:

ANDREW Shebbeare DAC That Gives Back.

Direct Air Capture is a tug of war with entropy and notoriously energy hungry as a result, so we are always on the lookout for lower energy solutions. However we also know that lowering kWh/tCO2 isn’t always everything. An emerging trend we’re excited to watch in 2024 is the rise of a new breed of Direct Air Capture (DAC) companies with broader value to offer. This might include saleable co-products, alternative go-to-market approaches and less capex-intensive deployment models which could significantly de-risk the path to scale and help reduce DAC companies’ heavy reliance on premium voluntary market purchases.

Examples in our portfolio include Parallel Carbon (producing green H2 alongside CO2) and modular electrochemical DAC companies RepAir and Carbon Atlantis (with additional applications in CCS and chemicals manufacturing). We’re interested in companies finding new valorisation strategies for existing waste, teaming up with industries to scale together, offering low carbon alternatives to existing chemicals and materials, offering creative ways to store energy or even remediate environmental damage. Waste heat, waste minerals, industrial residues and brines are prime candidates. We’re still keen on low energy though :-)

POPPY Russell Insetting Sets In.

2023 was a year of reckoning for carbon offsets. Broad lack of regulation, alerts of widespread fraud, and an investigation revealing the majority of offsets are effectively worthless led to crash in carbon offset price. We believe more scrutiny is a positive for carbon removal overall, steering attention from low quality emissions avoidance to genuine net negative removals. We’re excited to see green shoots of regulatory change forcing emitters to improve the carbon footprints of their own supply chains through carbon insetting, rather than offset elsewhere.

Whereas pathways like soil carbon have been under-represented in voluntary removal markets, these shifts should be strong tailwinds for transformative change in 2024 and beyond. Leading companies like Nestle, IKEA, and Unilever have started to establish their own stricter standards for insetting. While regulation catches up and as more companies look to inset, careful oversight and strong MRV will be vital to prevent greenwashing. Supporting services that help companies inset, through producing low carbon alternatives or enabling transparent and robust measurement of carbon at scale, will be crucial. More empirical data, especially in agricultural and blue carbon ecosystems, is certainly needed. However that same data will also enable ever more powerful models so remote sensing can play an increasingly important role. More companies will start to consider not only carbon but broader ecosystem services such as biodiversity, water quality, and nutrient management when valuing their environmental impact.

RICHARD Barker Semi-Open System Solutions.

With the oceans containing approximately 93% of the world’s mobile carbon and covering over 70% of the Earth’s surface, the opportunity for CDR through, for example, Ocean Alkalinity Enhancement (OAE) in oceans is clear. However, detailed knowledge of the ocean’s complex carbon dynamics is still developing. This, together with the technical and commercial difficulties of operating in a marine environment, means that the development of high integrity Measurement, Recording and Verification (MRV) protocols are proving challenging. In the meantime, systems that are more contained like wastewater treatment plants, desalination, reservoirs or rivers, could be ideal locations whilst open-system MRV questions are being developed. In 2024 expect to hear more from Carbon Run, one of Counteract’s newest portfolio companies, who are leading the development River Alkalinity Enhancement (RAE)⁵. We consider this pathway and “semi-open” systems like it an exciting precursor and potential commercial forerunner to ocean based solutions. MRV protocols in river systems can be more straightforward together with the prospect of readily implementable technical and commercial solutions. Furthermore, by selecting the right location, the addition of alkalinity can deliver a broad range of measurable environmental benefits - restoring degraded river systems, enhancing biodiversity or reducing the carbon footprint of wastewater treatment.

ROBERTA Franchi Crunch Time For Concrete.

Construction materials represent one of the few gigaton scale carbon utilisation opportunities that offers durable carbon storage. It is also in urgent need of decarbonisation with incoming regulations and significant voluntary commitments on embodied carbon. The space is full of innovation; the last two years saw many new entrants propose promising new ways to store more carbon in concrete, including enhanced curing to fix more CO2, Supplementary Cementitious Materials (SCMs) that displace carbon intensive cement or additives like biochar that promise stronger, lighter concrete while locking away biogenic carbon.

Having looked hard at the field and evaluated dozens of approaches, we have made four investments so far. Crucially, our investments are in pioneering solutions that are easy and cost-effective for constructors to implement.

In 2024, these ideas and more will be put to the test as they progress from small scale tests to live trials on major projects. We are focused on the practical realities of deploying new technologies into tightly regulated industry operating with thin margins. What approaches, in what combination, offer the best carbon impact? Which can be “stacked” or even deliver more than the sum of their parts? Could a combination of techniques turn concrete carbon negative? Which can meet exacting regulatory requirements without creating impractical burdens for constructors?

As always, get in touch with us if you want to discuss the rapidly evolving CDR industry, or let us know the solutions that are on your radar for 2024.


  1. (22.01.24)

  2. Carbon Direct, The State of the Voluntary Carbon Market 2023

  3. Reershemius et al., 2023 Initial Validation of a Soil-Based Mass-Balance Approach for Empirical Monitoring of Enhanced Rock Weathering Rates,

  4. Barbier and Burgess, 2021 Economics of Peatland Conservation

  5. Pre-print Sterling et al. 2023 Addition of Alkalinity to Rivers: a new CO2 Removal Strategy