The latest updates (April 2025) in the global carbon markets include ambitious projects and investment in innovation, as Pakistan signs-off two carbon offset projects, Holocene gets acquired and biofuel producer Neste starts Rotterdam SAF output.
Occidental Petroleum Corporation strengthens DAC portfolio with Holocene acquisition
US-based Occidental Petroleum Corporation (Oxy) has acquired direct air capture (DAC) company Holocene to expand its carbon removal operations.
“We believe combining these technologies will enable us to advance our R&D [research and development] activities to improve the efficiency of our direct air capture process, reduce CO2 capture costs and accelerate DAC deployment,” Oxy said in a press release.
Holocene has previously attracted corporate interest, with Google purchasing 100,000 tCO2e DAC credits in 2024 for $100 per tonne, for delivery in the early 2030s. Google noted at the time the deal was substantially lower than typical DAC offtakes, due to Holocene’s unique process of combining both liquid and solidbased systems.
Holocene’s technology uses amino acids and other organic compounds to continuously capture CO2 from ambient air. Once captured, the CO2 is concentrated and heated to low temperatures to create a pure stream of CO2 that can be transported and permanently stored, as noted on its website. Not only are Holocene’s credits competitive, but its operations also qualify under the US 45Q tax credit, which is intended to incentivize investment in carbon capture and sequestration.
Pakistan grants approvals to two new carbon offset projects under Paris Agreement
Pakistan has issued a Host Country Approval (HCA) and Letter of Intent (LOI) for two new carbon offset projects under Article 6 of the Paris Agreement.
The first HCA under Article 6.4, authorized by Pakistan’s Ministry of Climate Change and Environmental Coordination (MoCC&EC) is for a water, sanitation and hygiene (WASH) operation in the Punjab province.
The project, backed by a $20 million-25 million investment by a South Korean firm, will install 250 water filtration plants between 2026 and 2035, and generate 1.5 million carbon credits.
Water purification will occur through reverse osmosis and ultrafiltration at the facility.
MoCC&EC noted that the project was set to create new jobs, support biodiversity conservation, promote sustainable ground water management and allow for engagement with the Korean Emissions Trading System (KETS).
The use of credits generated from domestic or international projects developed by South Korean companies extends to up to 5% of each company’s compliance obligations. All international credits must be converted to South Korean offset credits to be used in the KETS.
MoCC&EC has also authorized an LOI under Article 6.2 to the Mehmood Booti Dumpsite Rehabilitation Project, which is developing a disused landfill into a forest and solar energy park.
With an investment of $18 million, it is estimated the project will generate approximately 930,474 tonnes of carbon credits from 2026 to 2040 under United Nations Framework Convention on Climate Change (UNFCCC)– approved methodologies for landfill gas capture, leachate treatment, afforestation and solar energy generation.
The approvals mark a major step in the operationalization of Pakistan’s carbon market and the international trade of carbon credits generated in-country, and follow the publication of the country’s Carbon Market Policy late last year.
Microsoft signs 3.69 million tCO2e carbon removal offtake with CO280
Microsoft has signed a 3.685 million tCO2e multi-year durable carbon dioxide removal (CDR) credits offtake agreement with project developer CO280.
The credits will be delivered over a 12 year period and the agreement represents one of the largest engineered CDR purchases to date.
CO280 works with US pulp and paper manufacturers to retrofit mills to capture biogenic carbon dioxide before it is emitted from the recovery boiler. The carbon dioxide is then compressed and transported for geological storage.
The capture technology for the project that will generate the credits for Microsoft will be supplied by SLB Capturi.
US pulp and paper mills emit 88 million tonnes of biogenic CO2 per year, which presents a significant opportunity to implementing large-scale CDR, according to CO280. By using existing mill infrastructure and biomass supply chains, the company aims to reduce complexity, cost and risk.
Brian Marrs, senior director of energy and carbon removal at Microsoft, said that the CO280 strategy of adding carbon removal to existing paper mills is an “efficient way to quickly scale carbon removal and bolster investment and jobs into timberland communities across the United States”.
Neste starts Rotterdam SAF output as capacity build weighs on market
Major Finnish biofuel producer Neste has started production of sustainable aviation fuel (SAF) at its Rotterdam facility, after a fire late in 2024 delayed its expansion plans at the site – Europe’s largest biorefinery.
The start of production comes at a time when supply is building in the EU following the introduction of the ReFuelEU SAF mandate at the beginning of 2025 and spot demand is weakening amid expectations of more supply as the year unfolds.
Fastmarkets understands that the EU will need 1 million-1.5 million tonnes of SAF this year to fulfil the current 2% mandate, assuming a total jet fuel consumption in the bloc of 60 million-65 million tonnes. The expansion of Neste’s Rotterdam facility adds a further 500,000 tonnes per year to capacity from its Singapore facility of around 1 million tpy. The company also has further bio-refining capacity at its Porvoo site in Finland.
Furthermore, steady shipments from China and active operational capacity from other producers within the EU, including Total Energies, ENI and Repsol, has weighed on spot market activity.
Neste reported a more than doubling of SAF output year on year to 526,000 tpy in 2024, driven mainly by operations at its Singapore refinery, and in the fourth quarter more than half of its SAF sales were destined for Europe.
Shipping line up data seen by Fastmarkets shows steady volumes from Singapore coming to Europe, alongside volumes from China, where some producers are realigning operations to focus on SAF rather than hydrotreated vegetable oil (HVO), sometimes referred to as renewable diesel.
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The stories included in this article are edited from the Fastmarkets carbon markets news subscription service, from April 2025.
