Introduction: Why analyze the German CDR market?
Faced with the acceleration of European climate policies (see our article), it is strategic for French players in the Carbon Dioxide Elimination (CDE) sector to analyze the dynamics of their partners, particularly Germany. The European Union's leading economic power, with a GDP exceeding 4,100 billion by 2023, Germany plays a central role both in the continent's industrial direction and in the implementation of carbon-neutral trajectories.
The CDR is becoming a key sector in Germany's climate strategy, with the aim of becoming climate neutral in 2045 and significant negative net emissions expected after 2050. This direction is underpinned by an advanced industrial ecosystem, infrastructure under development and structured public support for decarbonization research and innovation.
Recent developments reinforce this dynamic: a national strategy on negative emissions is due to be presented in April 2025, while the results of the early elections in February 2025 heralded a likely CDU/CSU-led coalition (two German Christian-Democrat parties), likely to boost support for CDR permanent technologies.
In this context, an analysis of the regulatory framework, these developments and the political dynamics in Germany is essential to identify cooperation levers and opportunities for French companies.
1. Regulatory framework and climate policy
Germany is pursuing an ambitious climate policy enshrined in the Federal Climate Protection Act (Klimaschutzgesetz), with the aim of achieving climate neutrality by 2045 and negative net emissions after 2050. This strategy is based on the gradual reduction of greenhouse gases, particularly in sectors with high residual emissions such as heavy industry and agriculture. By 2022, national emissions were still rising to around 746 Mt CO₂eq. Eventually, the target level of residual emissions is set at around 63 Mt CO₂eq per year, or 5 % of 1990 levels.
From this perspective, CDR is seen as an indispensable lever, both for offsetting incompressible emissions and for generating negative emissions from 2045 onwards. This structural role for CDR in the German strategy is designed to ensure compliance with climate targets while strengthening resilience to the effects of climate change.
The public commitment to this trajectory is clear. Specifically in the industry, 3 billion euros who were mobilized in August 2024 until 2030 to support industrial decarbonization, including CDR technologies via carbon capture and utilization (CCU) subsidies. This follows the publication of a German Carbon Management Strategy. In addition, this public support includes major research programs such as CDRTerra (land-based solutions), CDRMare (marine solutions) and Ariadne (climate scenarios). Each involves more than 200 researchers from some twenty institutions. CDRmare, focused on the marine environment, is studying six oceanic CDR methods, including underwater geological storage, alkalinity enhancement and macroalgal forests. CDRmare has launched funding for six projects totalling 26 million euros in 2021. For its part, CDRterra has committed 21 million euros to support projects involving DACCS, biochar, accelerated rock weathering, BECSC and afforestation and reforestation. It is organized around 11 consortia analyzing terrestrial options such as biochar, soil carbon sequestration or reforestation, with field trials, national models and monitoring and verification tools. By 2026, both programs aim to provide a sound scientific basis for integrating CDR into Germany's climate strategy.
Finally, the federal government has introduced "climate protection agreements", a carbon contract for difference-type mechanism aimed at sectors with high carbon emissions. This instrument aims to bridge the gap between the market price of carbon and the actual cost of implementing emission-reduction technologies, which could be mobilized to support the development and integration of CDR.
2. CDR industry in Germany
In 2024, the German market registered the purchase and deployment of 15,085 tonnes of CDR credits, marking a concrete phase in the activation of the sector. The country boasts a dense industrial ecosystem, with 50 players listed by cdr.fyi - twice as many as in France - reflecting its growing European leadership.
Today, almost a third of German projects are based on biochar, reflecting the importance of this technology in the early development phase. However, other methods - such as DACCS, accelerated weathering (ERW), mineralization or marine storage - are showing notable growth momentum.
On the regulatory front, the framework is currently undergoing major reform. To date, geological storage remains prohibited, but discussions are underway to authorize offshore storage, provided protected areas are avoided. At the same time, a reform aims to establish a legal framework for CO₂ transport infrastructures, notably pipelines, and to enable the cross-border export of CO₂ through the ratification of Article 6 of the London Protocol.
Germany is also part of a European value chain approach. It is cooperating with Norway on offshore storage and is planning structuring domestic infrastructures, such as the CO₂-Netz pipeline network supported by Open Grid Europe.
To keep pace with this growth, Germany is planning to adopt a new national policy in 2025 : The National Negative Emissions Strategy (LNe), which will define clear trajectories for all carbon dioxide removal (CDR) methods. While the Land Use, Land Use Change and Forestry (LULUCF) sector already benefits from quantified targets - 25 MtCO₂eq/year by 2030, 35 Mt by 2040 and 40 Mt by 2045 - this strategy will complete the framework with specific targets for the other technological approaches (BECCS, DACCS, biochar, etc.) to cover the 63 Mt of residual emissions. It will mark an essential step in the recognition and integration of CDR as a central lever for German climate neutrality.
These ambitions are underpinned by the results of a reference study published in 2024 by BCG, which estimates the economic potential of the German CDR sector at 70 billion euros per year by 2050, with 190,000 jobs created across the value chain. This report represents the most comprehensive analysis to date of the industrial development of CDR in Germany, integrating capture technologies, transport and storage infrastructures, and MRV systems.
By 2030, the study already identifies a market worth several billion euros, driven by the scaling-up of pilot projects, the deployment of transport infrastructures (such as the CO₂-Netz), and the first large-scale contractualizations with industry. The report also stresses the importance of a balanced approach to the long-term technology mix
3. Recent developments and outlook
The EDC sector in Germany is undergoing a phase of structural transformation, marked by the convergence of major administrative, political and industrial developments. Three main dynamics are at work: the development of an ambitious national strategy, the reconfiguration of the political landscape, and the growing structuring of CDR players.
The National Negative Emissions Strategy (LNe), due in April 2025, is a major milestone. It will set quantified targets for 2035, 2040 and 2045, and define sustainability, efficiency and permanence criteria for CDR technologies. It will propose the legislative adjustments needed to enable offshore CO2 storage, and bring Germany into line with European certification schemes (CRCF, see our article here). LNe will also address MRV governance and sectoral accounting issues (biomass in particular). It will integrate long-term economic modelling, including effects on energy prices, land value and technological maturity level (TRL), while considering future integration into the EU Emissions Trading Scheme (EU ETS) from 2026.
On the political front, the early elections in February 2025 saw the CDU/CSU come out on top, auguring a favorable direction for the development of CDR technologies, particularly those based on geological storage, such as DACCS. However, differences between the parties of the future coalition on the prioritization of solutions (natural versus technological) could influence the coherence of national policy. In parallel, the constitutional reform of march 2025 made it possible to relax the "debt limits" and create a special fund worth 500 billion euros over twelve years, 100 billion of which is earmarked for climate protection via the Klima- und Transformationsfonds (KTF). This measure guarantees multi-year funding for low-carbon infrastructures and technologies, which could include the CDR once the strategy is published. In addition, the 2045 target has been enshrined in the constitution.
Finally, the structuring of the sector is supported by the Deutscher Verband für Negative Emissionen (DVNE), founded in 2023. This national association acts as a platform for dialogue between industry, researchers and public decision-makers. It contributes to the development of a coherent framework for the deployment of negative emissions, by organizing technical workshops, consultations, and awareness campaigns, such as " Think Negative for a Positive Future" . The DVNE plays a facilitating role in the integration of CDR into national and European climate policies.
Conclusion
Germany is one of Europe's most advanced players in the CDR field, with a structuring strategic framework, ambitious objectives and a fast-growing industrial ecosystem. It is an important anchor in the construction of a European CDR value chain. But France also has a decisive role to play - and an opportunity to seize - in structuring a national CDR ecosystem to match its climate and industrial ambitions.
To achieve this, it must now implement a series of concrete levers, as defined in the report AFENxBCG :
- Harmonizing French standards with international frameworks (ICROA, CRCF) to enhance the credibility of projects, facilitate their recognition on a European and global scale, and attract private funding.
- Investing in CO₂ transport and storage infrastructureThis will enable us to reduce costs, accelerate industrialization and structure a competitive value chain.
- Set up targeted financial incentives - tax credits, public guarantees, reverse auctions - to secure revenues, reduce perceived risks and mobilize private investment.
- Strengthening local acceptability by involving communities and citizens from the earliest stages, through enhanced local consultation and transparent communication on the co-benefits of the CDR.
- Promoting convergence between voluntary and regulatory markets (including the integration of the CDR into the ETS), taking inspiration from initiatives such as Japan's J-ETS, to create a predictable, legible framework that stimulates long-term demand.
France now has the scientific, industrial and political resources to structure a robust, sovereign CDR market in line with its climate commitments. Provided it acts quickly and in a coordinated fashion, it can position itself as a European leader in carbon neutrality through the deployment of carbon-removal solutions.
by Raphaël Cario
