Carbon Dioxide Removal Technologies 2026

Table 11 outlines typical characteristics of offtake transactions for each CDR pathway, focusing on contract terms such as tenors, pricing mechanisms, volume commitments and de-risking measures. While there are shared patterns in pricing mechanisms and payment schedules across pathways, differences in risk profiles – shaped by factors such as project maturity, regulatory incentives and supplier financial strength – lead to variations in contract length and review periods. Comparison of offtake terms, aggregated by CDR pathway TABLE 11 DAC BECCS Biochar ERW Tenor Contract length Long (5–12 years) Long (5–12 years) Shorter (1–8 years) Shorter (1–5 years) High capital intensity, long project set-up timelines, buyers willing to commit to longer contracts because projects take time to scale.Large-scale facilities need more time for development, similar to DAC.Technology is more mature, allowing faster deployment and production, reducing need for long-term contracts.Lower capital intensity but longer time to prove technology, hence shorter contracts preferred. Alignment with regulatory and financing incentivesStrong Strong Moderate Limited Supported by US policies such as the 45Q tax credit, which offers up to $180 per tonne for capturing and storing CO2, and the IRA, which provides long-term financial incentives to reduce the risk of these capital-intensive projects.Receives funding from EU programmes such as the Innovation Fund,17 which finances large- scale carbon removal technologies. Countries including Germany, France and the Netherlands also provide subsidies to support renewable energy projects, helping BECCS scale up.Backed by initiatives such as the United States Department of Agriculture Natural Resources Conservation Service Soil Carbon Amendment (Code 336) in the US,18 which provides funding for using biochar to improve soil health and store carbon. In Australia, the Carbon Farming Initiative19 allows biochar projects to generate tradable carbon credits. Since biochar is a more established technology, it relies less on subsidies and benefits from market- based pricing.20Financing for ERW can be challenging due to the lack of MRV, as lenders require clear metrics to assess project risks. Efforts by the EU under the Green Deal and private-sector initiatives are developing MRV frameworks tailored to ERW. These emerging standards could unlock access to regulatory incentives and financing by ensuring projects meet eligibility criteria for programmes tied to measurable carbon removal outcomes. Pricing Pricing mechanism Cost-plus, includes subsidiesCost-plus, includes subsidiesCost-plus and market-based Cost-plus High production costs due to energy use and upfront capital investment; margins may be lower because of the emerging nature of the technology.Subsidies influence the pricing structure, reducing overall costs for buyers.In supply-constrained markets, price formation reflects durability and scarcity premiums rather than marginal production cost.Covers operational costs of deploying minerals, with margins depending on buyer interest and demand.3.2 For signed offtakes, what do contracts typically include, and how do they compare across CDR technology? Carbon Dioxide Removal Technologies: Market Overview and Offtake 26