New Report Confirms Corporate Interest in Carbon Removal Credits

The voluntary carbon market (VCM) is evolving and capturing the interest of corporate actors, Nasdaq found in its newly released 2024 Global Net Zero Pulse report. 

Corporate carbon credit buyers are continuing to rely on their existing carbon credit purchasing strategies while requiring additional education on carbon credits before purchasing—both trends that continued from last year’s survey findings. They also feel uncertain about the regulatory landscape, which has delayed carbon credit procurement decisions. 

Here are a few of the key takeaways from the survey, which included responses from 120 corporate professionals across a variety of sectors: 

1. Demand for Carbon Removal Projects—but Limited Supply

One goal of the survey was to understand the supply and demand dynamics in the carbon credit market. It found that just over half of respondents plan to invest in carbon dioxide removal (CDR) credit solutions, while only 13% plan to use other carbon credits for carbon reduction and avoidance and 10% plan to reach net zero without using carbon credits at all. 

However, the supply of VCM projects is inverse to demand. Whereas 80-88% of VCM projects were for emissions reduction and avoidance, only 12% of projects were conventional CDR. This demand for carbon removal projects becomes clearer when considering that 87% of respondents believe carbon removal credits are important to a net zero strategy, with around 40% indicating that CDR is very or extremely important. 

2. A Need for Better Education

Although respondents indicate a clear desire for more carbon removal credit options, they report uncertainty about the role CDR plays in their sustainability strategies. 

“There is an overwhelming need for more education across a wide spectrum of needs,” said Steve Vargas, Co-Founder and Global Head of Nasdaq’s ESG Advisory practice, who co-authored the report. “This includes case studies, general information on how carbon removal credits work, how to integrate carbon credits into ESG strategy development, and how to set a carbon budget.” 

For example, over half of respondents were unsure about the composition of their current carbon credit portfolios, and roughly the same number didn’t know how much of their Scope 1 and 2 emissions could be reduced using CDR today and in the future. 

“This suggests that better emissions measurements will be required for sustainability professionals to push their organizations further toward carbon credit efforts,” said Vargas. 

Most of the corporate buyer respondents point to a lack of appropriate education on CDR and carbon markets as a primary hurdle for making carbon credit purchase decisions. Buyers currently rely on carbon credit advisors and independent governing bodies, as well as carbon registries such as Puro.earth and third-party carbon credit rating agencies. 

But they’re seeking more education, given the importance of general information, case studies, and advice on carbon credit integration in meeting ESG goals. 

3. Pressure From Regulators

In addition to lacking sufficient education on carbon credit decision-making, companies are feeling external pressure to use carbon credits. However, about one in five are excluding CDR from their net zero strategies as they await more regulations and guidance. 

About 72% of respondents report they’re feeling pressure from a suite of policies by regulators, such as the Securities and Exchange Commission (SEC), California Air Resources Board (CARB), Federal Trade Commission (FTC), and European Commission (EC)—in particular, the SEC’s Climate Disclosure Rules and California’s AB-1305. 

4. A Durable Removal Strategy

The long-term impact of CDR credits is becoming clear, with companies seeking more durable options for their portfolios. While only 10% currently plan to use CDR for significant emissions abatement, that percentage is expected to double by 2050. 

Regarding carbon sequestration time periods, they’re more optimistic about the future. 

“Interestingly, most companies currently prefer carbon removal credits that sequester carbon for up to 200 years, which bodes well for several carbon removal credit types in the market today,” said Vargas. “Over time, companies indicated a preference for longer-duration carbon removal credits—between 600 and 1,000 years—suggesting a shift toward technology-based credits.” 

As companies navigate the evolving and complex VCM landscape , these survey findings highlight their needs and expectations as they increasingly commit to carbon removal strategies. With further education and more regulatory certainty, corporate buyers can feel confident in their long-term investment in carbon removal strategies. 

In the short term, Vargas sees a secondary wave of CDR buyers arriving soon—particularly with regulation and business-to-business engagement accelerating the creation of first-time greenhouse gas corporate reporters. 

“Longer term, I see the compliance markets and voluntary carbon markets converging,” Vargas said. “But we’re still several years away from that.” 

For more survey findings and insights about how the VCM has changed and how companies are approaching carbon credit procurement on their journeys to achieve net zero, download the full report here: Nasdaq 2024 Global Net Zero Pulse.