Carbon Dioxide Removal Technologies 2026

Suppliers in CDR offtakes The funding dynamics for CDR technologies vary significantly, reflecting differences in technological maturity, capital intensity and scalability potential. Engineered solutions such as DAC and BECCS dominate public and private funding, while hybrid solutions such as biochar and ERW attract smaller-scale, region-specific investments aligned with unique project characteristics and localized demand. Engineered solutions such as DAC and BECCS account for the majority of CDR investments: –DAC: Receives the largest share of government funding due to its high upfront capital requirements and reliance on subsidies such as the US 45Q tax credit. In 2024, 98% of DAC purchases occurred in the US, underscoring the critical role of 45Q in stimulating the CDR market.13 While DAC offers significant potential for permanent carbon storage, its scalability is hindered by high energy and operational costs, necessitating sustained public–private collaboration. –BECCS: Leads in private funding due to its mature technology and integration with biomass supply chains. Its dual revenue streams – carbon removal and energy production – make it particularly attractive to infrastructure investors. It is expected that EU BECCS investment and adoption will gain momentum, with many projects based in Sweden and the Netherlands, several of which are expected to reach the final investment decision (FID) within the next few years, alongside the release of the EU BioCCS certification methodology in 2024.14Hybrid solutions, including Biochar and ERW, are gaining traction, with approximately $400 million in investments each. These pathways are primarily funded by venture capital (VC) firms, which are drawn to their scalability potential and cost advantages: –Biochar: Benefits from diversified revenue streams such as carbon credits, bio-oil and soil amendments, enhancing its appeal in agricultural markets. With costs ranging from $80 to $200 per tonne – significantly lower than DAC ($500–$1,200 per tonne) and BECCS ($200–$600 per tonne) – biochar is more accessible to smaller and price-sensitive purchasers. However, limited alignment with tax incentives constrains its potential for broader adoption. –ERW: Attracts funding for pilot projects or collaborations with mineral producers, particularly in regions with large spreading surfaces and local access to minerals – Brazil, for example. Despite its lower capital intensity, ERW faces challenges related to regional regulatory barriers, land access and the need for standardized MRV systems. The disparity in funding levels between engineered and hybrid solutions reflects a market preference for technologies with higher scalability and durability. However, the cost competitiveness of biochar and the scalability potential of ERW highlight opportunities for investors to play a larger role in the CDR ecosystem if aligned with supportive policies and funding mechanisms. Summary view of CDR buyers TABLE 8 Funding DAC Investment driven by government fundingPrivate ~$4.1 billion Government ~$10.0 billion BECCS Investment concentrated among large, established enterprisesPrivate ~$3.7 billion Government ~$1.5 billion Biochar/bio-oil Private investment spread across a wide range of suppliersPrivate ~$0.4 billion Government ~$0.1 billion ERW Private investment spread across a wide range of suppliersPrivate ~$0.4 billion Government ~$0.1 billion Total Private funding: ~$8.6 billion; government funding: ~$11.7 billion In 2024, 98% of DAC purchases occurred in the US, underscoring the critical role of the 45Q tax credit in stimulating the CDR market. Carbon Dioxide Removal Technologies: Market Overview and Offtake 23