• Surging AI-driven energy use from major tech firms has pushed demand for durable carbon-removal credits to levels that outstrip supply.
• High-quality removals are now almost four times more expensive than lower-cost forestry-linked credits, accelerating capital flows into next-generation projects.
• More than $10 billion has moved into the market through spot purchases and long-term offtakes, reshaping global expectations for carbon removal finance.
A Market Transformed by AI Expansion
Heavy demand from Big Tech for durable carbon-removal credits is tightening a market already struggling to keep pace with the emissions growth tied to artificial intelligence. Executives, registries, and buyers at COP30 said the scarcity is intentional and necessary, creating financial pressure that brings new projects online faster.
Microsoft and Google have been among the most aggressive buyers, with collective spending that runs into the hundreds of millions of dollars since 2019. Most of that capital has flowed in over the last two years as energy use from data-center buildout accelerates. Analysts at CDR.fyi estimate that more than $10 billion has now been committed through immediate purchases and long-term offtakes.
Durable carbon-removal credits — ranging from biochar to direct air capture — are priced far higher than forestry or land-preservation projects. Market participants say this widening spread reflects their stronger permanence and clearer climate value. With tech companies scaling AI models that still run largely on fossil power, demand for durable credits has surged.
Brennan Spellacy, chief executive of Patch, said the link between AI growth and investment in carbon removal is now evident. “The companies that are performing well are investing heavily, and the reason why these companies are performing well is AI. So AI’s driving profit and profit’s driving investment,” he said.
Tight Supply Meets Rising Corporate Pressure
The supply of high-quality credits has not kept up. Patch data showed that while a third of buyer requests were for biochar credits, the category represented less than 20% of actual sales because availability remains limited. Reforestation credits experienced a similar gap: requested 25% of the time but delivered 12% of the time.
“The desire for high quality is very real, and you can see it in the numbers. In 2024, there were 8 million tons of durable carbon removal purchased, and so far this year, it’s 25 million,” said Lukas May, chief commercial officer at the registry Isometric.
Market participants say this rise in durable credit demand is not only about corporate climate strategies, but also about investor expectations. AI-generated emissions are quickly becoming a material governance issue, especially as companies face scrutiny over expansion plans that rely on fossil-heavy grids. High-value credit purchases are one of the few near-term levers available to tech firms while they wait for clean power procurement and grid decarbonization to catch up.
Big Tech’s Decarbonization Playbook Evolves
Microsoft said its strategy hinges on long-term contracts that help project developers secure financing. “We send strong demand signals through long-term offtakes to unlock a virtuous cycle of innovation, financing, and deployment,” a company spokesperson said. “By anchoring large-scale projects, we both drive new supply while leaving headroom for other corporate buyers to enter.”
Alphabet declined to comment, but analysts expect its procurement behavior to remain aligned with the broader trend among tech majors: durable removals first, short-term offsets only where unavoidable.
The companies continue to pledge net-zero ambitions despite the United States having withdrawn from the Paris Agreement under President Donald Trump. With national policy uncertainty back on the table, corporate purchase agreements are becoming an even more central force driving the growth of removal technologies.
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Why Scarcity Is Part of the Strategy
Experts argue that the shortage of durable credits is not a market failure but a price signal. Developers need multi-year confidence to build high-capex facilities such as biomass-to-biochar plants or direct air capture hubs. Rising prices make that feasible.
For buyers, the scarcity requires compromise. As Patch noted, many firms must settle for a different category of credit than originally requested because top-tier projects cannot scale fast enough. Yet even this mismatch is drawing more capital into next-generation removals.
Investors tracking the trend say the current phase mirrors early renewable energy markets, where initial scarcity and high prices paved the way for rapid technology cost declines. If durable removal projects can follow a similar trajectory, the market could expand far beyond voluntary corporate buyers and into regulated national climate strategies.
The Global Stakes
The spike in AI-driven emissions is forcing a shift in how corporates, investors, and policymakers think about carbon markets. For countries still reliant on fossil-powered grids, the growth of energy-intensive AI infrastructure makes removal capacity more consequential. For emerging markets hosting early-stage projects, Big Tech’s procurement strategies are helping shape new finance pipelines.
As the world moves toward COP31 and an increasingly fragmented geopolitical landscape, demand from AI-heavy sectors is expected to remain one of the most powerful forces pulling carbon-removal technologies into commercial maturity.
The question for global climate governance is no longer whether high-quality removal markets will grow, but how fast they can scale before AI’s energy footprint expands even further.
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