Carbon Dioxide Removal Technologies 2026

Offtake agreements for CDR technologies share common elements but exhibit vital differences depending on the specific pathway and its stage of development.3.3 What are key insights (similarities and differences) for offtakes in the CDR space? Common elements Price stability and review mechanismsBuyers across all carbon removal technologies prioritize transparency in the cost structure of producing carbon removal credits. As a result, offtake contracts typically use a cost-plus pricing mechanism, which provides a clear breakdown of production costs. These pricing structures often include provisions to adjust for inflation and incorporate technology advances, helping to balance financial risks for both buyers and suppliers. Emphasis on de-risking measuresContracts typically include force majeure clauses and remedy periods to address unforeseen events and operational challenges. However, the specifics, such as covered events and remedy durations, vary by pathway. Differing elements Contract length Long contracts (5–12 years) Technologies such as DAC and BECCS, which require significant upfront capital and long lead times, often involve extended contract durations. Short contracts (1–8 years) More established technologies such as biochar often feature shorter contract lengths due to faster deployment and lower capital requirements. Payment structures Prepayments Emerging pathways such as DAC and ERW often rely on prepayments to secure project development and operational funding. These technologies typically face financing hurdles due to high capital costs and limited operational history. Payment on delivery More mature pathways such as biochar, supported by established companies with greater access to financing, often use payment on delivery models. Volume commitmentsHigh-volume commitments Technologies with large-scale operations such as BECCS and biochar typically accommodate larger volume commitments due to confidence in production scalability. Lower-volume commitments Emerging technologies such as DAC often feature smaller initial volume commitments due to uncertainties in scaling and technology development. Subsidy support and regional incentivesHigh-subsidy dependence Pathways such as DAC and BECCS often rely heavily on subsidies or incentives such as the US 45Q tax credit to achieve financial viability. Lower-subsidy dependence More market-driven pathways such as biochar depend less on subsidies but may still benefit from regional incentives or subsidies for production.Comparative overview of CDR offtake agreement structures TABLE 12 Carbon Dioxide Removal Technologies: Market Overview and Offtake 28