2026 State of the Sector – Investment in Carbon Dioxide Removal | Insight Report | June 2026

Monday, 8th June 2026

The carbon dioxide removal (CDR) market entered 2026 in a markedly different position from a year earlier. What was once characterized by broad enthusiasm for emerging technologies has evolved into a more selective, execution-driven market focused on delivery capacity, financeability, infrastructure readiness, and commercial credibility.

While investment activity remains significant, capital is increasingly concentrated toward pathways and developers demonstrating the ability to scale, deliver verified removals, and establish long-term commercial viability.

As of Q1 2026, cumulative capital committed to the sector has reached approximately USD 11.5 billion, while global CDR capacity has expanded to an estimated 18.1 MtCO₂e per year. The market is transitioning from pilot deployments and early-stage experimentation toward operational delivery, supported by growing offtake commitments, evolving policy frameworks, and increasingly stringent integrity requirements.

Key Highlights

Investment Flows Are Becoming More Selective

Between June 2025 and March 2026, approximately USD 1.06 billion in disclosed capital was committed to the CDR sector. However, investment activity increasingly favored pathways perceived as scalable and strategically important. Direct Air Capture (DAC) continued to attract the largest cumulative capital base, exceeding USD 4.35 billion, while biochar emerged as one of the most actively financed pathways during the period.

In contrast, several rapidly growing pathways, including soil carbon and enhanced weathering, saw demand accelerate faster than investment deployment, highlighting an emerging financing gap.

Market Leaders Are Shaping Demand and Deployment

The market continues to be influenced by a relatively concentrated group of buyers, developers, and policymakers. Microsoft remains the dominant purchaser across multiple CDR pathways, supporting large-scale offtake agreements and providing critical revenue certainty for project developers.

Companies such as Stockholm Exergi, Climeworks, and leading biochar developers continue to anchor pathway growth, while government-backed initiatives including DAC Hubs, 45Q incentives, and sovereign procurement programs are playing an increasingly important role in enabling project deployment and infrastructure development.

The CDR Market Is Moving Toward Commercial Maturity

The sector is shifting beyond proof-of-concept activity toward measurable operational delivery. Biochar, soil carbon, and enhanced weathering have recorded significant growth in issuances, retirements, and contracted demand, demonstrating increasing market acceptance.

At the same time, stricter MRV requirements, permanence expectations, and methodology updates are raising the bar for participation, reinforcing a market environment where credibility, durability, and delivery performance matter more than announcements alone.

Outlook

The next phase of CDR market development will be defined by execution. While policy support, corporate demand, and investor interest remain strong, future growth will depend on the sector’s ability to convert contracted demand and available capital into scalable, financeable, and operationally reliable projects. Cost reduction, infrastructure buildout, and verified delivery will increasingly determine which pathways achieve long-term commercial success.

Report Overview

This report examines the evolution of the global CDR market, covering investment activity, project financing, technology pathways, policy developments, market participants, and supply-demand dynamics. It provides a comprehensive assessment of how capital, demand, and operational deployment are reshaping the sector as carbon removal transitions from an emerging climate solution into a developing industrial market.

View Table of Contents

1 Executive Summary…………………………………………………………………………………………………………………….7
2 Methodology and Data Sources……………………………………………………………………………………………………9
3 The Evolution of the CDR Sector………………………………………………………………………………………………..10
3.1 Early market formation: Scientific need, limited commercialization (2017–2020)……………………….10
3.2 Demand formation and the rise of long-term offtakes (2021–2024)……………………………………………11
3.3 Institutionalization and the emergence of policy-driven scaling (2024–2026)…………………………….12
3.4 The emerging next phase: Financeability, infrastructure, and industrial scaling………………………….13
4 Supply, Delivery Capacity, and Market Formation………………………………………………………………………15
4.1 The current state of CDR capacity…………………………………………………………………………………………..15
4.2 Issuances and retirements: the gap between market ambition and delivered supply……………………16
4.3 Why issuance growth slowed after 2021………………………………………………………………………………….17
4.4 Pathway concentration and supply composition………………………………………………………………………17
4.5 Geographic concentration of supply……………………………………………………………………………………….18
4.6 The 2030 pipeline: growth ahead, but execution remains uncertain………………………………………….19
5 Demand, Offtakes, and Buyer Dynamics……………………………………………………………………………………21
5.1 The emergence of advance market demand……………………………………………………………………………..21
5.2 The economics of contracted demand…………………………………………………………………………………….22
5.3 Buyer concentration and the role of hyperscalers…………………………………………………………………….23
5.4 Sectoral evolution of demand………………………………………………………………………………………………..24
5.5 Offtakes as financial infrastructure………………………………………………………………………………………..26
5.6 The next phase of demand formation…………………………………………………………………………………….26
6 Investment, Capital Formation, and Financeability……………………………………………………………………28
6.1 Capital entering the CDR sector…………………………………………………………………………………………….28
6.2 Financing structures shaping the market……………………………………………………………………………….29
6.3 Investment concentration by pathway…………………………………………………………………………………..30
6.4 Why financeability remains constrained………………………………………………………………………………..31
6.5 The evolving investor lens……………………………………………………………………………………………………32
6.6 Public capital and the role of de-risking………………………………………………………………………………..32
6.7 The next phase of capital formation………………………………………………………………………………………33
7 Policy, Compliance Integration, and Market Architecture………………………………………………………….35
7.1 The emergence of a layered policy architecture………………………………………………………………………35
7.2 Standards and MRV as market infrastructure………………………………………………………………………..36
7.3 Fiscal support and public-sector de-risking……………………………………………………………………………37
7.4 Regional policy approaches…………………………………………………………………………………………………38
7.5 Voluntary-to-compliance convergence………………………………………………………………………………….39
7.6 Infrastructure as the next policy frontier………………………………………………………………………………39
7.7 The next phase of market architecture………………………………………………………………………………….40
8 Pathway Landscape : Commercial Maturity, Market Signals, and Scaling Dynamics Across Key CDR Pathways………………………………………………………………………………………………………………………………..41
8.1 BECCS: Commercial Maturity, Infrastructure Scale, and the Near-Term Backbone of Durable Removals……………………………………………………………………………………………………………………………….42
BECCS is transitioning from pilot projects to industrial infrastructure…………………………………………42
Europe is emerging as the center of large-scale BECCS deployment…………………………………………….44
Supply growth remains materially behind contracted demand……………………………………………………45
8.2 DAC: From Ambitious Commitments to Execution Challenges……………………………………………..46
DAC is increasingly becoming a policy-supported infrastructure segment……………………………………47
The market remains highly concentrated across capital, buyers, and delivery………………………………48
8.3 BiCRS: Scaling Durable Removals Through Distributed Biomass Systems……………………………..49
Biochar dominates today, but the market is gradually diversifying………………………………………………50
The pathway benefits from modular scalability and broader participation……………………………………51
8.4 Afforestation, Reforestation and Revegetation (ARR): From Voluntary Market Expansion to Institutionalized Nature-Based Carbon Removal………………………………………………………………………………………………..52
South America and Asia continue to dominate global supply………………………………………………………53
Forward contracting is reshaping ARR demand dynamics………………………………………………………….54
8.5 Soil Carbon Removal (SCR): Scaling Regenerative Agriculture into a Carbon Removal Asset Class……………………………………………………………………………………………………………………………………..55
Methodology tightening after 2021 fundamentally reshaped the market……………………………………..56
Asia dominates global SCR supply……………………………………………………………………………………………57
Advance purchase commitments are accelerating market maturity…………………………………………….58
8.6 Marine Carbon Dioxide Removal (mCDR): From Scientific Validation to Early Commercial Formation…………………………………………………………………………………………………………………………….59
The market remains overwhelmingly forward contracted………………………………………………………….59
Capital formation is accelerating, but remains early-stage…………………………………………………………60
Buyer demand is real, but highly concentrated…………………………………………………………………………61
8.7 Enhanced Rock Weathering: An Emerging Durable Pathway Anchored in the Global South…..62
ERW is transitioning from research-stage activity to investable, registry-validated delivery…………63
Demand has scaled rapidly but remains highly concentrated…………………………………………………….64
9 Conclusion and Outlook……………………………………………………………………………………………………..66
10 Glossary of Terms…………………………………………………………………………………………………………….68
About cCarbon……………………………………………………………………………………………………………………..73
Rights to Publication…………………………………………………………………………………………………………….73
Disclaimer……………………………………………………………………………………………………………………………73

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