By Jan-Willem Bode, President, Puro.earth
There has long been a perception in voluntary carbon markets (VCM) that the buyer base needs to be wider and deeper. Carbon finance funds innovative climate solutions, and without more buyers deploying capital at greater volumes, many of these solutions aren’t reaching the output needed to meaningfully address climate change.
Durable carbon dioxide removal (CDR) is no different. For CDR to scale at the pace the climate requires, while we wait for meaningful government action to fall into place to support it, there needs to be a diverse buyer-base that is providing innovative CDR businesses with the finance they need.
Recent news around Microsoft’s CDR purchasing has prompted the inevitable questions about buyer concentration. But the picture beneath the surface is more complex – and more encouraging – than the headlines suggest.
Retirement data from our own registry – representing 74% of durable CDR deliveries – shows that Microsoft retirements account for just 6% of total retirements across the period 2024-2026.
Take biochar, the fastest-growing CDR pathway that has bought the most corporate buyers into the CDR market, more than 150 distinct end-buyers retired CO2 Removal Certificates (CORCs) in 2025, with 80 making retirements in 2026 as of mid-April. That is a vibrant, diversifying market.
Demand is growing and the buyer base is diversifying. But realising the scale CDR requires depends on a specific type of capital entering the market: from financial intermediaries, institutional investors and investment businesses that bring not just money, but the liquidity and market depth that can transform CDR into a global asset class. Institutional-grade infrastructure is being built to support what this kind of buyer needs.
Historic hurdles
There have naturally been concerns from buyers in the voluntary market around trust and transparency. From 2022, in face of various quality and mis-selling scandals, carbon credit buyers in the VCM broadly began losing faith in what they were purchasing.
Efforts to reinvigorate trust and transparency in the VCM are underway and making good progress. The ICVCM is bringing standardisation that was much needed. Standards, like our own, continue to be updated in line with the science, technology and issuance realities on the ground.
The premise is that greater trust will build scale. But for CDR – with capital-intensive pathways that demand significant upfront investment – corporate credit buyers alone will not be enough. Capital from financial institutions and investment businesses will be critical.
This kind of finance will only flow at the required levels if trust and transparency is there. Is this pathway understood? Is the credit seen as a 100% solid investment? These are the sort of questions that are naturally at the front of minds of investors.
Overcoming concerns
Institutional finance doesn’t just need confidence in the asset – it needs the kind of operational infrastructure it is familiar with. Settlement processes. Issuance calendars. Audit trails. Delivery certainty. These are the building blocks of markets that these organisations already participate in, and they will expect the same from CDR.
We’ve seen that high-quality project developers – such as Exomad Green, the largest biochar producer – can create demand precisely because their business is understood and potential buyers can count on their ability to deliver.
Rating agencies and integrity bodies are helping buyers decide what to buy – but a quality mark alone is not enough. Investors also need the operational infrastructure that makes a market legible and liquid: the systems, data, and delivery certainty that transform a promising asset class into one they can actually underwrite.
Several practical innovations are already closing that gap. Business intelligence tools allow us to identify trends, share learnings from audits, and accelerate the development of new methodologies. For a CDR investor, a credit is only as credible as the process behind it – and that process is becoming increasingly legible.
Two years ago, we were doing less than 30 audits per year, but last year more than 150 projects went to audit. Tools like our own audit calendar, that allow suppliers to book an audit based on buyer demand, will help to increase this. Issuance trackers are coming to market that transparently indicate when there will be new credit issuance taking place. It’s exactly the kind of infrastructure and transparency you see in the world’s largest and most liquid financial markets.
Tools that support faster issuance are important too, both for the suppliers who generate the credits, and for investors. Predictability and timing matter just as much as volume in a maturing market.
Sophisticated finance
As this infrastructure takes root, it is already enabling more sophisticated financial structures to flow into the market.
Developers can now borrow against an offtake agreement, lowering the cost of capital and improving project returns. This is relevant not just for larger projects that tend to have heavier balance sheets, but also for smaller projects that are starting to build out their operations.
Mechanisms are emerging that give developers without an offtake agreement access to a floor price, improving coverage ratios and the terms of future deals. It supports project insurance underwriting and could further catalyse finance into the market as projects become more investable when supported by insurance products with premiums informed by dynamic pricing.
We are starting to see the emergence of an asset-backed security market that you already see in finance. One where suppliers will start putting a forward stream of credits into bundles, leading to more secure pricing.
Finally, there are more financial intermediaries entering the market to take speculative positions. This is improving liquidity, and something that will only increase as we move to a more regulated state under developments such as the EU’s Carbon Removals and Carbon Farming regulation (CRCF).
Taken together, these developments are the hallmarks of a market that is building on proven project finance structures – not reinventing them. The result is a CDR market that is increasingly legible, investable and resilient. One that is no longer dependent on any single buyer, and is the kind of market in which institutional capital plays an essential role.
Jan-Willem Bode is President of Puro.earth.
Any opinions expressed in this commentary reflect the views of the authors and not of Carbon Pulse.
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