DAC Offtake Agreements: Microsoft’s 45 M Tonne Deal, Google’s 16 New Pacts, and TD Bank’s Deep Sky Contract (2025-2026)
24/7 CFE Adoption Risks: 66 Companies Push Back on Hourly Matching Rules
The corporate move to 24/7 Carbon-Free Energy (CFE) is creating a new, premium demand driver for high-durability Carbon Dioxide Removal (CDR) as companies confront the reality of residual grid emissions that hourly accounting makes transparent. The strategy requires matching electricity use with clean generation on an hourly basis, a significant step beyond annual averages. This granular approach reveals the hours when renewable energy is unavailable, forcing companies to either use grid power from fossil fuels or find a way to neutralize those emissions.
- In the period from 2021 to 2024, 24/7 CFE was a pioneering concept led by a few tech firms like Google. The primary corporate strategy remained centered on purchasing annual Renewable Energy Certificates (RECs), which masked hourly reliance on fossil-fuel grids.
- The market shifted significantly in 2025 and 2026. Google advanced its 24/7 CFE score to 66% by 2024 with a goal of 100% by 2030, while new standards from the Greenhouse Gas (GHG) Protocol began requiring hourly and geographic matching for decarbonization claims.
- This transition faces resistance. In May 2026, a coalition of 66 companies, including Apple and Amazon, pushed back against the proposed stricter reporting rules, citing concerns over cost and complexity. This pushback highlights the exact operational and financial gap that high-quality CDR is positioned to fill.
- The inability to achieve 100% physical CFE due to grid intermittency and storage limitations is becoming the primary business case for CDR. Companies pursuing credible hourly targets must address the “dirty” hours, creating a direct and measurable demand for verified carbon removal to achieve true net-zero operations.
Microsoft 45 M Tonne CDR Purchase, Google and Meta Offtake Pacts (2025-2026)
Technology giants and financial institutions are executing large-scale, long-term offtake agreements for high-durability carbon removal, signaling a strategic shift to secure future supply as a necessary component of their net-zero and 24/7 CFE strategies. These deals are moving beyond small-scale pilots to multi-year, multi-million-tonne commitments, effectively creating the bankable demand needed to scale the nascent CDR industry.
- Microsoft has become a market-defining buyer, contracting for a record 45 million tonnes of CDR in 2025. However, the company paused some new purchases in April 2026 to reassess its strategy, a move that indicates growing buyer sophistication and a focus on portfolio quality over sheer volume.
- Other major tech firms are building diversified CDR portfolios. In April 2026, Living Carbon announced offtake agreements with Meta, Google, and Mc Kinsey for its photosynthesis-enhanced trees, while Google expanded its portfolio with 16 new offtake agreements in 2025.
- The financial sector validated CDR as a credible asset class with TD Bank’s 10-year agreement in June 2026 to purchase 18, 000 carbon removal credits from Deep Sky, a Canadian CDR project developer. This signals a broadening of the buyer base beyond the technology sector.
Table: Key Carbon Removal Offtake Agreements (2026)
| Buyer / Seller | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| TD Bank / Deep Sky | June 2026 | 10-year agreement for 18, 000 Direct Air Capture (DAC) and biochar credits. Establishes a long-term offtake relationship and validates CDR within the financial services industry. | ESG News |
| Living Carbon / Meta, Google, Mc Kinsey | April 2026 | Offtake agreements for carbon removal from photosynthesis-enhanced trees. Diversifies buyers’ portfolios with a nature-based solution engineered for higher performance. | Orrick |
| Microsoft / Unnamed Project | April 2026 | Reports indicated Microsoft paused some new carbon removal purchases to reassess its portfolio after making significant offtake commitments in 2025, signaling a market shift toward strategic quality control. | ESG Today |
| Microsoft / Ugandan Forestry Project | January 2026 | Agreement for 2 million tons of carbon removal. Demonstrates a portfolio approach that includes both technology-based and large-scale, high-quality nature-based solutions. | ESG Today |
US vs. Global Markets: 24/7 CFE Driving CDR Demand in North America
North America, particularly the United States, has become the primary hub for both pioneering 24/7 CFE initiatives and the corresponding growth in CDR offtake agreements, driven by a concentration of data centers and a proactive corporate buyer landscape. While European policy and standards bodies are influential, the commercial momentum in deal-making is centered in the US and, increasingly, Canada.
- Between 2021 and 2024, 24/7 CFE was an emerging concept almost exclusively driven by US-based technology companies testing procurement models in their domestic markets.
- By 2026, the US solidified its position as the epicenter of demand. The massive and constant energy needs of data centers operated by Google, Microsoft, and Meta are the primary catalyst for both advanced clean energy procurement and the resulting need for CDR.
- Canada is emerging as a key region for CDR project development, attracting investment and offtake deals. The June 2026 agreement between Toronto-based TD Bank and Quebec-based Deep Sky for DAC credits highlights this trend.
- While Europe contributes significantly to the development of standards and market infrastructure, such as platforms from Granular Energy, the large-volume corporate offtake agreements that signal market scale are predominantly executed by North American buyers for projects located globally.
Commercial Scale vs. Pilots: Evaluating CDR Maturity for 24/7 CFE Goals
While 24/7 CFE is a maturing procurement strategy in 2026, the high-durability CDR technologies required to address its shortfalls remain in early commercialization. This creates a market characterized by high-cost, long-term offtakes for future capacity rather than immediate, at-scale delivery, presenting both a risk and an opportunity for first-movers.
- From 2021 to 2024, the CDR market consisted mainly of small-scale pilot projects and exploratory purchases from early adopters. The focus was on technology validation and understanding different removal pathways like Direct Air Capture (DAC).
- The period from 2025 to 2026 marks a decisive shift toward securing future supply. Major buyers are signing multi-year, multi-million-tonne offtake agreements to underwrite the construction of commercial-scale facilities that will not be operational for several years.
- The high cost and energy intensity of leading CDR technologies like DAC remain a significant barrier to immediate, widespread deployment. These costs are a key factor in the corporate pushback against aggressive hourly matching mandates.
- The strategic pause in purchasing by a market leader like Microsoft in April 2026 shows the market is maturing. Buyers are moving beyond simply creating demand and are now focused on due diligence, project viability, and ensuring the carbon credits they purchase will meet future verification and quality standards.
SWOT Analysis: The Link Between 24/7 CFE and CDR Demand Dynamics
The symbiotic relationship between the pursuit of 24/7 CFE and the demand for CDR creates powerful market opportunities but also exposes vulnerabilities related to technology cost, policy dependence, and the operational complexity of hourly energy accounting. This dynamic makes CDR a critical tool for credible decarbonization but also ties its success to the broader corporate and regulatory appetite for granular emissions tracking.
Table: SWOT Analysis for 24/7 CFE and CDR Market Linkage
| SWOT Category | 2021 – 2023 | 2024 – 2026 | What Changed / Validated |
|---|---|---|---|
| Strengths | CDR demand was driven by general corporate net-zero pledges and first-mover ambition. | Demand is now directly linked to the quantifiable, hourly grid emissions revealed by 24/7 CFE accounting, creating a specific, measurable market need from credit-worthy buyers like Google and Microsoft. | The demand signal for CDR became more specific and premium, moving from a “good to have” to a necessary tool for credible 24/7 CFE claims. |
| Weaknesses | High theoretical costs of CDR technologies and the complexity of 24/7 CFE were key discussion points. | The real-world costs are now causing direct corporate pushback, with 66 companies including Apple and Amazon protesting stricter hourly rules. | The theoretical cost concern was validated as a major real-world barrier to adoption, creating a tension that CDR is positioned to solve for a price. |
| Opportunities | CDR was seen as one of several tools for tackling “hard-to-abate” emissions in sectors like aviation or cement. | CDR is now positioned as the essential solution for the “last mile” of electricity decarbonization: the residual grid emissions that even advanced procurement strategies cannot eliminate. | A new, premium market segment for CDR emerged, specifically for neutralizing unavoidable Scope 2 emissions on an hourly basis, as seen in deals by TD Bank. |
| Threats | Risk that low-quality, cheap carbon offsets could flood the market and undermine demand for high-quality removal. | The primary threat is now a slowdown in the adoption of mandatory hourly accounting, which would weaken the unique demand driver for CDR. A market leader like Microsoft pausing purchases also introduces uncertainty. | The risk shifted from market dilution to a potential slowdown in the adoption of the core demand-driving mechanism (hourly CFE), making regulatory and standards-body decisions critical. |
Microsoft’s Strategic Pause: What It Signals for 2027 CDR Offtake Trends
The primary strategic development to watch in the next 12-18 months is whether the corporate buyers who pioneered large-scale CDR offtakes will standardize their purchasing criteria, creating a tiered market that rewards specific performance metrics like verification, energy sourcing, and permanence.
- If this happens: If market leaders like Microsoft and Google formalize stricter purchasing criteria for CDR projects following their current portfolio reviews and experiences with 24/7 CFE implementation…
- Watch this: The emergence of a “premium” CDR credit category explicitly tied to neutralizing emissions from a 24/7 CFE-certified grid could command higher prices. Watch for new offtake agreements that specify time-matching of the removal activity itself.
- These could be happening: A bifurcation of the CDR market may occur, where high-durability, highly verified projects (e.g., DAC) secure premium offtakes from top-tier corporations, while less-proven or lower-permanence projects compete for a smaller pool of buyers. We could also see new platforms or standards emerge that specialize in bundling CFE and time-matched CDR.
The questions your competitors are already asking
This report covers one angle of corporate demand for carbon removal. The questions that matter most depend on your work.
- direct air capture credit prices 2026
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