State of the Sector – Investment in Carbon Dioxide Removals (CDR) | Insight Report | June 2026

CDR is entering a new phase where scale, financeability, and verified delivery are becoming the key measures of market progress. By March 2026, cumulative capital committed to carbon dioxide removal had reached USD 11.5 billion, while estimated annual removal capacity increased to 18.1 MtCO2e/year, up from ~12.5 MtCO2e/year in June 2025. The sector is still growing, but the basis of market confidence is changing: investors and buyers are now placing greater weight on delivery, cost discipline, infrastructure access, and credible routes to scale.

Investment in Carbon Dioxide Removals (CDR) key insights:

From Momentum to Market Discipline – The June 2025–March 2026 period marked a clear shift from broad enthusiasm to sharper selectivity. Although disclosed capital commitments during the period stood at ~USD 1.06 billion, funding became more concentrated around pathways and developers with clearer commercial models, stronger delivery prospects, and strategic relevance.

Capacity Growth Is Becoming More Measurable – Estimated operational CDR capacity expanded by ~5.5–6 MtCO2e/year during the period, reaching ~18.1 MtCO2e/year by end-Q1 2026. Much of this growth came from soil carbon, biochar, and enhanced weathering, where market activity is increasingly translating into measurable issuance and retirement volumes.

Biochar Is Moving Faster Than Most Pathways – Biochar emerged as one of the strongest examples of commercial progression. Between June 2025 and March 2026, it recorded ~2.8 MtCO2e of contracted offtakes, accounting for nearly 42% of cumulative biochar offtake volumes through Q1 2026. The pathway also saw around 44% of cumulative biochar issuances and 31% of cumulative biochar retirements during this period, alongside ~USD 82 million in new capital. Its lower infrastructure needs and modular deployment model are helping it scale faster than more complex engineered pathways.

Demand Growth Is Not Always Matched by Capital – Soil carbon and enhanced weathering are gaining traction, but financing remains thin. Soil carbon saw ~98.5% of disclosed advance offtake volumes contracted after June 2025, yet only one USD 30 million equity deal was recorded. Enhanced weathering and mineralization recorded ~97% of its cumulative issuances and retirements after June 2025, but disclosed equity investment was limited to USD 10.16 million. These pathways are attracting buyers faster than they are attracting broad investor confidence.

BECCS Is Scaling Through Large, De-Risked Projects – BECCS continued to secure large contracted volumes, with ~36% of cumulative BECCS offtakes signed between June 2025 and March 2026. However, new capital deployment slowed sharply, with only ~USD 14 million committed during the period against ~USD 2.9 billion raised cumulatively. The pathway’s funding base remains heavily shaped by large public support, including ~USD 1.8 billion from the Swedish Energy Agency for Stockholm Exergi.

DAC Still Carries High Expectations, but Limited Verified Delivery – DAC remains central to the long-term CDR narrative, with cumulative committed capital exceeding USD 4.35 billion by Q1 2026. However, only ~USD 255 million was deployed between June 2025 and March 2026, while verified delivery remained very limited at 2,088 tonnes issued and 1,753 tonnes retired globally. The next test for DAC is not demand creation, but cost reduction and reliable operational scale-up.

Offtakes Are Becoming Bankability Tools – By Q1 2026, over 114 MtCO2e of CDR had been contracted across 310+ transactions, with a further 10–30 MtCO2e estimated through undisclosed agreements. Long-term offtakes are increasingly being used to support project financing and investor confidence. However, buyer concentration remains a key risk, with Microsoft continuing to account for a large share of activity across multiple pathways.

Policy Is Moving From Support to Market Formation – Public policy is no longer limited to grants and incentives. Measures such as 45Q, DAC Hubs, the EU CRCF, and sovereign procurement programs are helping shape the rules, infrastructure, and demand signals needed for a more mature CDR market. This is gradually positioning CDR as part of broader carbon management and industrial decarbonization strategy.

Integrity Is Becoming a Growth Filter – Stronger MRV expectations, permanence standards, and methodology revisions are raising the bar for issuance and market acceptance. This may slow short-term volume growth, but it is also pushing the sector toward higher durability, stronger credibility, and more institutionally acceptable supply.

The next phase of CDR will be defined less by headline commitments and more by conversion: turning capital, offtakes, and policy support into delivered tonnes. Annual global CDR capacity could rise from 18.1 MtCO2e/year today to ~35–63 MtCO2e/year by 2030, but that growth will depend on pathways proving they can scale reliably, attract finance, and deliver removals that buyers and regulators can trust.

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 CDR	41
8.2	DAC: From Ambitious Commitments to Execution Challenges	46
8.3	BiCRS: Scaling Durable Removals Through Distributed Biomass Systems	49
8.4	Afforestation, Reforestation and Revegetation (ARR): From Voluntary Market Expansion to Institutionalized Nature-Based Carbon Removal	52
8.5	Soil Carbon Removal (SCR): Scaling Regenerative Agriculture into a Carbon Removal Asset Class	55
8.6	Marine Carbon Dioxide Removal (mCDR): From Scientific Validation to Early Commercial Formation	59
8.7	Enhanced Rock Weathering: An Emerging Durable Pathway Anchored in the Global South	62
9	Conclusion and Outlook	66
10	Glossary of Terms	68
	About cCarbon	73
	Rights to Publication	73
	Disclaimer	73

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