In 2025, buyers contracted nearly 30 million tons of carbon removal, more than triple the previous year, yet actual delivery remains a fraction of what global climate targets require. David Babson of XPRIZE underscores the crucial role of creating market demand alongside innovation to accelerate impact.
- Contracted carbon removal soared to 30 million tons in 2025, led by Microsoft.
- XPRIZE blends monetary prizes with advance purchase agreements to spark market growth.
- Fusion energy and wildfire response prizes adopt similar buyer-incentive strategies.
What happened
In 2025, nearly 30 million tons of durable carbon removal contracts were secured, marking a tripling from 2024’s totals. The majority of these contracts—about 90%—came from a single company, Microsoft, highlighting that demand for these critical climate solutions remains concentrated. However, less than half a million tons were actually delivered during the year, a small fraction compared to the billions of tons experts say will be needed by mid-century to meet global climate goals.
David Babson, executive vice president of Energy, Climate, and Nature at the XPRIZE Foundation, identifies this mismatch between technological capabilities and market uptake as a market failure. To address this, XPRIZE designs competitions that incentivize not only innovation but also create demand signals by pairing prize money with buyer agreements. For example, their Carbon Removal prize saw over 1,300 teams compete and successfully pushed participants to raise billions in funding, with a shift toward models that secure advance purchase commitments alongside cash awards.
Why it feels good
The approach XPRIZE is taking offers a hopeful pathway to scale solutions that remove greenhouse gases from the atmosphere. By guaranteeing buyers through advance market commitments or power purchase agreements, innovators gain the confidence needed to invest further, build infrastructure, and deliver meaningful carbon removal at scale. This helps prevent promising technologies from stalling simply because of insufficient customer demand.
Winning innovations like the Mati Carbon project in India demonstrate the potential for environmental and economic benefits beyond carbon capture alone. Mati’s use of crushed basalt to lock away CO2 also improves soil health and crop yields, offering a resilient model through economic slumps. Expanding such multi-benefit solutions backed by secured buyers could accelerate broader adoption, creating real progress toward climate resilience and sustainability.
What to enjoy or watch next
Beyond carbon removal, XPRIZE is applying similar prize structures to other urgent challenges, including fusion energy and wildfire response. For example, the recent XPRIZE Wildfire competition awarded over $4.5 million to teams advancing autonomous fire suppression technologies, with defense contractors integrating innovation alongside established players. These competitions aim to reduce costs and scale adoption, improving community safety and resilience.
Additionally, XPRIZE envisions a future beyond efficiency-focused sustainability, contemplating abundant, clean energy that powers innovations like indoor vertical farms—potentially returning millions of acres of farmland back to nature. Interested individuals can follow XPRIZE’s evolving prize portfolio and join ideation workshops at xprize.org, engaging directly in the journey toward equitable, sustainable abundance.