Trend watch: Carbon removal procurement & offtakes in 2026 — signals, winners, and red flags

The carbon removal procurement landscape has undergone a structural transformation between 2024 and early 2026, shifting from a niche activity dominated by a handful of technology companies to an institutional market with standardized contracting, independent verification, and growing regulatory integration. Global advance purchase commitments for durable carbon removal surpassed $4.2 billion in cumulative contracted volume by Q4 2025, according to CDR.fyi, with European buyers accounting for 38% of new commitments, up from 22% in 2023. This trend watch examines the signals shaping procurement decisions in 2026, identifies the emerging winners capturing market share, and flags the risks that buyers must navigate as the market matures.

Why It Matters

Carbon removal procurement has moved beyond corporate voluntarism into a domain shaped by regulatory mandates, institutional investment flows, and international carbon accounting standards. The EU Carbon Removal Certification Framework (CRCF), adopted in late 2024, established the first supranational standard for certifying engineered and nature-based removals, creating a compliance pathway that did not exist 18 months ago. Under the revised EU Emissions Trading System, certified removals will become eligible for limited compliance use starting in 2028, but companies positioning for this integration are signing offtake agreements now to secure supply at pre-compliance pricing.

In parallel, the International Sustainability Standards Board (ISSB) finalized guidance clarifying how companies may account for carbon removal credits within climate disclosures under IFRS S2. This accounting clarity has removed a significant barrier for European corporates that previously avoided procurement due to uncertainty about whether purchased removals could be recognized in reported emissions trajectories. The result is a measurable acceleration in corporate procurement activity, with the number of European companies holding active removal offtake agreements rising from approximately 85 in early 2024 to over 260 by January 2026, according to data compiled by the Carbon Business Council.

The economics have shifted as well. Frontier, the advance market commitment originally catalyzed by Stripe, expanded its buyer coalition to 36 members and deployed $235 million in offtake contracts by end of 2025. The Department of Energy's Carbon Dioxide Removal Purchase Pilot, authorized under the Bipartisan Infrastructure Law, committed $35 million to direct procurement from US-based suppliers in 2025, providing government validation of offtake-based market development. These demand signals have attracted over $3.8 billion in private capital to carbon removal ventures since 2023, according to Lowercarbon Capital's market tracker.

Key Signals to Watch

Signal 1: Price Discovery and Tiering by Permanence

The carbon removal market in 2026 exhibits clear price stratification based on permanence duration and verification rigor. Direct air capture with geological storage (DACCS) commands $350-600 per tonne, reflecting high energy inputs and capital intensity but offering 10,000+ year permanence. Enhanced rock weathering ranges from $80-200 per tonne with 1,000+ year permanence, though monitoring, reporting, and verification (MRV) protocols remain less standardized. Biochar sits at $100-180 per tonne with 100-1,000 year permanence depending on feedstock and production conditions. Biomass carbon removal and storage (BiCRS) occupies the $120-250 range.

This tiering matters because buyers are increasingly segmenting their portfolios by permanence class. Microsoft's 2025 Environmental Sustainability Report disclosed that 65% of its removal procurement budget targeted removals with permanence exceeding 1,000 years, up from 40% in 2023. JPMorgan Chase's climate commitment similarly shifted toward durable pathways, allocating $75 million to DACCS offtakes with Climeworks and Heirloom Carbon Technologies. For European buyers subject to CRCF certification, the regulatory framework distinguishes between "permanent" (geological, 1,000+ years) and "temporary" (biogenic, sub-100 years) storage categories, with different accounting treatment under the EU taxonomy.

Signal 2: Aggregation Platforms and Intermediary Growth

The complexity of evaluating removal quality, negotiating bespoke offtake agreements, and monitoring delivery has catalyzed rapid growth in intermediary platforms. Frontier now functions as a de facto purchasing consortium, pooling buyer demand to negotiate portfolio-level contracts with multiple suppliers. South Pole and Compensate launched dedicated removal procurement services in 2025. CarbonCure, initially a concrete technology company, expanded into facilitating mineralization-based removal offtakes for its customer network.

European-specific aggregators have emerged to address regional regulatory requirements. Puro.earth, acquired by Nasdaq in 2023, has become the dominant registry for engineered removals in Europe, listing verified credits from biochar, enhanced weathering, and DACCS projects across Finland, Iceland, and Germany. By Q4 2025, Puro.earth listed 1.2 million tonnes of verified removal credits, more than triple its volume two years prior. The emergence of these platforms reduces transaction costs but introduces intermediary risk, as buyers must evaluate whether aggregators maintain adequate due diligence on underlying project quality.

Signal 3: Integration with Compliance Markets

The convergence of voluntary carbon removal procurement with compliance carbon markets represents arguably the most consequential trend of 2026. The EU CRCF establishes a certification methodology that explicitly bridges voluntary and compliance domains. Certified removals under this framework will carry regulatory recognition under the Land Use, Land Use Change, and Forestry (LULUCF) regulation and, pending further legislative action, within the ETS itself.

Switzerland has moved further, allowing certified removal credits to satisfy a portion of national climate obligations under its revised CO2 Act. The Swiss Federal Office for the Environment approved Climeworks's Mammoth facility removals for compliance use in 2025, marking the first instance of engineered carbon removal receiving formal compliance market recognition in Europe. Norway's sovereign wealth fund signaled interest in removal credit procurement as part of portfolio decarbonization, though without formal allocation as of early 2026.

Emerging Winners

Technology Providers

Climeworks remains the market leader in DACCS, with its Mammoth plant in Iceland reaching 36,000 tonnes per year of operational capacity by mid-2025 and its next-generation Project Cetus targeting 500,000 tonnes annually by 2030. Climeworks has secured over $1.4 billion in cumulative offtake commitments from buyers including Microsoft, JPMorgan Chase, and the Swiss government.

Heirloom Carbon Technologies operates the first US-based DACCS facility in Tracy, California, using limestone-based carbon mineralization. Heirloom secured a $53 million offtake from the US Department of Energy and additional contracts from Frontier and individual corporate buyers. Their approach targets costs below $200 per tonne by 2028.

UNDO Carbon leads the enhanced rock weathering segment in Europe, deploying crusite basalt across agricultural land in the UK and scaling into Continental European markets. UNDO's model generates co-benefits for farmers through improved soil pH and crop yields while sequestering atmospheric CO2 through accelerated mineral carbonation. The company reported 200,000 tonnes of contracted removal capacity for 2026.

Carbon Engineering (acquired by Occidental Petroleum in 2023) is constructing the Stratos facility in the Permian Basin, targeting 500,000 tonnes per year of DACCS capacity. While primarily US-focused, Carbon Engineering's partnership with Airbus and several European airlines positions it as a supplier for sustainable aviation fuel pathways that European carriers require under the EU ReFuelEU Aviation regulation.

Verification and MRV Providers

Isometric has established itself as the leading independent verification body for carbon removal, conducting scientific due diligence on removal claims across all major pathways. Isometric's registry now covers over 80 removal projects and has rejected approximately 30% of applications that failed to meet its quantification standards, providing buyers with confidence in credit quality.

CarbonPlan continues to publish open-source evaluations of removal quality, permanence, and additionality. Their CDR Verification Framework has been cited by the EU CRCF technical working group and adopted by several institutional buyers as a screening tool for offtake decisions.

Red Flags for Practitioners

Red Flag 1: Delivery Risk in Forward Contracts

The majority of carbon removal offtake agreements are forward contracts for removals that have not yet been delivered. As of early 2026, approximately 65% of cumulative contracted volume remained undelivered, reflecting the pre-commercial status of many removal technologies. Buyers face delivery risk from construction delays, technology underperformance, and supplier insolvency. The Frontier coalition's portfolio approach mitigates this by diversifying across multiple suppliers and pathways, but individual corporate buyers signing bilateral agreements with single suppliers face concentrated exposure.

Red Flag 2: MRV Gaps in Emerging Pathways

Enhanced rock weathering and ocean-based carbon removal methods face persistent MRV challenges. Quantifying actual CO2 sequestration from spreading crushed rock on agricultural fields requires modeling weathering rates, soil conditions, water table interactions, and transport of dissolved inorganic carbon to oceans. Independent assessments from the National Academies of Sciences and CarbonPlan have flagged that current measurement approaches carry uncertainty ranges of 30-50%, meaning a tonne claimed may represent only 0.5-0.7 tonnes of actual net removal. Buyers should apply conservative discount factors when evaluating these pathways.

Red Flag 3: Greenwashing Pressure and Credit Misuse

As carbon removal procurement grows, the risk of misleading claims increases. Companies purchasing removal credits may conflate them with emissions reductions, creating the impression of net-zero alignment without addressing Scope 1-3 emissions. The Science Based Targets initiative (SBTi) explicitly prohibits using removal credits to meet near-term science-based targets, requiring companies to decarbonize value chains first and reserve removals for neutralizing residual emissions. The EU Green Claims Directive, entering force in 2026, imposes substantiation requirements on environmental claims including carbon neutrality assertions, with penalties for unsubstantiated offset or removal credit usage.

Red Flag 4: Concentration Risk in Supply

The removal market remains highly concentrated. Climeworks, Heirloom, and Carbon Engineering collectively represent over 70% of contracted DACCS capacity globally. Supply chain bottlenecks in sorbent materials, modular air contactor manufacturing, and geological storage site permitting constrain the pace of capacity expansion. Buyers signing long-term offtakes should assess whether suppliers have secured financing for capacity buildout and whether construction timelines align with contracted delivery schedules.

Action Checklist

• Assess organizational residual emissions to determine appropriate removal procurement volumes aligned with SBTi or equivalent framework guidance
• Develop a permanence-tiered procurement strategy, allocating budget across DACCS, enhanced weathering, biochar, and BiCRS based on organizational risk appetite and regulatory requirements
• Require third-party verification from recognized bodies (Isometric, Puro.earth, or equivalent) for all removal purchases
• Structure offtake agreements with delivery milestones, performance guarantees, and remediation clauses for underdelivery
• Monitor EU CRCF implementation timelines and certification methodology updates for impacts on procurement strategy
• Evaluate aggregation platforms versus direct bilateral agreements based on portfolio scale and internal procurement capacity
• Maintain clear communication distinguishing removal procurement from emissions reduction activities in sustainability reporting
• Build internal expertise on MRV methodologies to evaluate supplier quality claims independently

FAQ

Q: What is a reasonable per-tonne budget for carbon removal procurement in 2026? A: Budget expectations should be calibrated by permanence tier. DACCS with geological storage ranges from $350-600 per tonne. Enhanced rock weathering costs $80-200 per tonne. Biochar sits at $100-180 per tonne. Buyers should expect prices to decline 15-25% by 2030 as capacity scales, but securing supply now requires paying current-market premiums. Portfolio approaches blending permanence tiers can reduce weighted average costs to $150-300 per tonne.

Q: How should European companies account for removal purchases under CSRD reporting? A: Under the European Sustainability Reporting Standards (ESRS) E1, companies must separately disclose carbon credits used, including type, certification standard, and permanence classification. Removal credits cannot be netted against reported emissions in the core GHG inventory. Companies should report gross emissions and disclose removal purchases as a supplementary climate action. The CRCF certification will provide the recognized quality standard for reported removals.

Q: What contract terms should buyers negotiate to protect against delivery risk? A: Key protective terms include: milestone-based payment schedules tied to construction and operational benchmarks rather than upfront lump sums; delivery guarantees with financial penalties for shortfalls exceeding agreed tolerances (typically 10-15%); right to substitute credits from alternative verified sources if the contracted supplier fails to deliver; annual verification requirements using independent third-party assessors; and termination rights if delivery delays exceed specified periods (typically 18-24 months beyond contracted dates).

Q: Are nature-based removals still relevant in a market shifting toward engineered approaches? A: Nature-based removals remain relevant for near-term procurement but face increasing scrutiny on permanence and additionality. Afforestation and reforestation projects offer removals at $15-50 per tonne but with permanence limited to decades rather than centuries. Under the EU CRCF, these are classified as "temporary" storage with shorter crediting periods and re-verification requirements. Buyers increasingly treat nature-based removals as a complementary portfolio component rather than a primary procurement pathway.

Q: How does the EU CRCF affect procurement strategies for non-EU companies? A: Non-EU companies selling into or operating within European markets face indirect exposure through supply chain disclosure requirements under CSRD and the Carbon Border Adjustment Mechanism (CBAM). Procurement of CRCF-certified removals positions non-EU companies to demonstrate climate action credibility to European customers, investors, and regulators. As CRCF becomes the de facto quality standard in Europe, non-EU buyers benefit from aligning procurement criteria with its methodology even without direct compliance obligations.

Sources

• CDR.fyi. (2025). State of Carbon Dioxide Removal: 2025 Market Dashboard. Available at: https://www.cdr.fyi/
• European Commission. (2024). Regulation on an EU Carbon Removal Certification Framework. Brussels: Official Journal of the European Union.
• International Sustainability Standards Board. (2025). IFRS S2 Implementation Guidance: Carbon Credits and Removal Accounting. London: IFRS Foundation.
• Frontier Climate. (2025). 2025 Annual Report: Advance Market Commitment Progress and Portfolio Update. San Francisco: Frontier.
• CarbonPlan. (2025). CDR Verification Framework: Methodology and Assessment Results. San Francisco: CarbonPlan.
• National Academies of Sciences, Engineering, and Medicine. (2025). A Research Strategy for Ocean Carbon Dioxide Removal and Sequestration. Washington, DC: The National Academies Press.
• Science Based Targets initiative. (2025). Corporate Net-Zero Standard v2.0: Guidance on Carbon Removals. London: SBTi.