To Those Considering Entering the CDR>>>>>

2025/12/20 更新2025/12/20 發佈閱讀 23 分鐘

As 2025 comes to an end, I realize that much of my time was spent not on technology or transactions, but on education and mindset shifts. CDR is not constrained by tools or capital, but by how deeply people are willing to understand its purpose, limits, and responsibiliti

Dear All,

Over the past several years, I have been continuously working in and observing the field of Carbon Dioxide Removal (CDR). From technology pathways and project design, to regulatory frameworks and real market operations, I have seen the same scenarios play out repeatedly—and the same misunderstandings resurface again and again. This is why I believe some reflections should be written down, for those who are preparing to enter this field, so they can pause and think carefully before committing themselves.

If you are approaching CDR with the mindset of “investing in equipment, materials, land, and projects in order to obtain high-margin financial returns,” I must say frankly that this path may not be suitable for you. This is not because CDR cannot involve commercial considerations or cost recovery, but because prioritizing capital returns above all else fundamentally diverges from the very nature of sustainable development that CDR seeks to achieve. This is not a world governed by financial arbitrage as its core logic.

I am willing to share my experience and explain regulatory, institutional, and market realities because I sincerely hope that those entering this field understand what they are actually doing. The reality, however, is that many people are drawn into CDR not by a commitment to climate contribution, environmental responsibility, or long-term governance, but simply because they have “heard that this market is expensive and highly profitable.” After learning only fragments of the subject and reviewing a few presentations, they assume they have grasped the whole picture. They then begin searching for equipment suppliers and material vendors, often skipping regulatory frameworks, legal requirements, and scientific foundations altogether, attempting to assemble a profit model purely based on business intuition.

This path, almost without exception, is eventually corrected by reality.

The most common turning point appears around pricing. Many people see prices displayed on public platforms or industry discussions—such as those on CDR.fyi—showing figures around USD 150 per ton, and then start calculating equipment depreciation, material costs, land costs, and expected margins, forming what appears to be a reasonable business model. However, when they actually enter the market and speak with intermediaries or potential buyers, the prices that can realistically be transacted are often in the range of USD 60–70 per ton. At that moment, carefully constructed profit models collapse almost instantly.

The issue is not that prices are being “cut,” but that list prices were mistaken for real market-clearing prices from the very beginning. CDR pricing is never a single number; it reflects a combination of factors, including removal quality, community co-benefits, biodiversity impacts, delivery certainty, monitoring and verification costs, long-term storage liability, reversal risk, legal and claims constraints, and—most critically—how buyers actually perceive the outcome. When buyers view CDR as a climate contribution rather than a freely fungible offset asset, the pricing structure naturally differs fundamentally from traditional financial products. Building a business model on surface-level prices alone is almost guaranteed to fail.

Even more risky than price misjudgment is the misunderstanding of “ownership” and “compliance.” Over the years, I have repeatedly heard statements such as: “I invested in the equipment, I purchased the materials, the land and facilities are mine—so the removal outcome is obviously mine. Why should the government have any say?” This line of thinking treats CDR as a purely private property output, while ignoring a fundamental reality of carbon accounting and global climate governance: greenhouse gas emissions and removals inevitably exist simultaneously on both corporate and national balance sheets.

Under the current international framework, companies can indeed obtain contractual rights to use or claim removal outcomes. However, the same quantity of removal must also be recorded, on a geographic basis, in the host country’s greenhouse gas inventory and national accounting system. This is not a matter of opinion, but a structural design intended to prevent double counting and the misuse of climate narratives. Compliance and legality are not optional; they are prerequisites for entering this market. Even if individuals or companies prefer to ignore this, regulations and procurement rules will ultimately force them to confront reality.

This is precisely why I have repeatedly emphasized the importance of legality and compliance over the years—yet few are willing to pause and truly understand it. Many assume that once the technology exists and equipment is installed, everything else is merely administrative paperwork. In reality, the opposite is true. What determines whether a CDR project is viable is often not the equipment itself, but the legal framework, institutional standards, carbon accounting logic, and the existence of auditable and verifiable evidence chains. Without these foundations, removal outcomes cannot be formally recognized, nor can they be used for compliance offsets or statutory surrender. At best, they can only be described as climate contributions in ESG reports.

Similar misunderstandings also arise with respect to co-benefit standards. Whether it is CCB or the SDGs, these are not certification labels that can be obtained simply by completing documentation. They require long-term demonstration—under scientific evidence—of real benefits to climate, communities, ecosystems, and the environment. This cannot be achieved by copying templates or reusing language. Text can be replicated, but local culture, governance structures, social trust, co-benefit mechanisms, biodiversity impacts, and scientifically verifiable monitoring designs cannot. Without understanding the underlying principles, even well-intentioned imitation will result in projects that fail integrity assessments and therefore cannot produce high-quality CDR outcomes.

Looking back at years of practical experience, I have seen too many cases where people are first attracted by profit narratives, then persuaded by intermediaries, invest heavily in equipment, and only afterward confront regulatory requirements and procurement realities. When this order is reversed, failure is almost inevitable. For CDR, a rational entry sequence should be: first, understand the institutional positioning and carbon accounting logic, and clarify whether your claims are climate contributions or compliance instruments; second, conduct market and risk due diligence to understand real pricing, delivery obligations, and legal constraints; and only then consider equipment, materials, engineering, and quality configurations. This is not conservatism—it is basic professional discipline.

I share these experiences not to discourage everyone, but to help those who genuinely wish to enter the field avoid unnecessary detours. This path does require passion and sincerity, but it also demands patience, discipline, and respect for science and institutions. CDR can involve commercial activity, but its core has never been short-term arbitrage—it is a climate contribution project measured on a century-scale horizon.

I will conclude with a clear statement: if you are searching for the next generation of high-margin investment opportunities, CDR is not the answer. However, if you are willing to operate within real institutional and scientific constraints and commit long-term to something that truly matters for the climate, then this path is one worth taking seriously.

In recent years, Microsoft has committed to and procured carbon removal at the scale of tens of millions of tons. What exactly is Microsoft buying, and why does it procure in this way? The answers are not difficult to understand—provided one carefully reads the buyer’s documentation, accounting logic, and procurement guidance, rather than relying on market rumors or hearsay.

For reference, the following documents are strongly recommended before making any investment or project decisions: