The Carbon Removal Arms Race Continues With Google’s First 2025 Offtake Agreements

The Carbon Removal Arms Race Continues With Google’s First 2025 Offtake Agreements

Google has kicked off its 2025 carbon dioxide removal (CDR) procurement campaign with a bang, signing two future purchase agreements of 100,000 tonnes with biochar providers Varaha and Charm Industrial (see Verdantix Buyer’s Guide: Carbon Dioxide Removal Technologies 2024), the two largest biochar purchases to date.

Back in March 2024, Google announced its commitment to purchase $35 million in carbon removal credits within twelve months, and subsequently signed deals for enhanced rock weathering removals (Terradot) and direct air capture (Holocene). Google began its CDR strategy in earnest back in 2023, signing deals through Frontier with some of the biggest names in the game, such as CarbonCapture and Lithos Carbon.

Google has set a target to neutralize all of its residual emissions through removals by 2030: a strategy which, in Google’s words, relies on ‘partnerships’ rather than straightforward procurement. This 2030 timeframe presents a huge challenge for Google, which must select providers with reasonable scalability prospects in the short term – hence Google’s move to acquire biochar offsets.

The CDR market is in an arms race, with technology giants competing for access to offsets in what is a supply-constricted market. Despite Google’s rapid moves over the past two years, Microsoft is the clear leader in the CDR race, contracting more than 4.5 million tonnes in 2024 alone. For context, the combined purchases of all other buyers accounted for 814,600 tonnes. This arms race has been propelled by AI-related emissions; Google’s emissions are currently 48% higher than its 2019 benchmark, driven by “increasing energy demands from the greater intensity of AI compute”.

Microsoft has first mover advantage but faces a significant challenge – it has already exhausted the market for carbon removals. For Microsoft, BECCS (bioenergy with carbon capture and storage) is the solution; by volume, 96% of Microsoft’s total 2024 purchases have been from BECCS providers. Big tech buyers are the biggest demand driver and investor in CDR, and they are sending clear signals that they want supply now. This is driving investment towards biochar and bioenergy technologies, raising questions about the future of more expensive, but potentially more durable, technologies like DAC.

The dominant image of CDR as removing carbon dioxide from the air and storing it underground is rapidly becoming antiquated. Instead, CDR is moving closer to conventional, nature-based removals, as the nascent market slowly matures.