Investment Landscape in Carbon Removal 2026

Preface

This report summarizes private capital investment in durable carbon dioxide removal (CDR) companies between 2021 and 2025. It includes publicly announced equity and equity-like funding rounds involving VC, CVC, PE, growth funds and other private investment.

Key Takeaways

• Approximately $3.6B in private capital was invested in CDR companies between 2021 and 2025.
• Investment activity accelerated rapidly from 2021 and peaked in 2023, before contracting in 2024 and 2025.
• Direct Air Carbon Capture and Sequestration (DACCS) dominated capital allocation, accounting for the majority of total investment across the five-year period.
• Deal activity broadened across methods over time, even as total capital fluctuated year-to-year.
• The market remains structurally early-stage, with Seed and Series A rounds accounting for most deals, while late-stage rounds remain limited in number but large in size.
• Capital concentration increased as fewer investors participated in a similar number of deals in later years.
• While many funded companies have achieved initial commercial traction, fewer have yet to progress to delivery and retirement, underscoring the execution challenges that persist beyond fundraising.

Scaling beyond current investment levels will likely require larger late-stage rounds and/or capital sources beyond traditional venture funding.

Overall CDR Investment Activity

Total private investment in CDR startups surpassed $3.6B between 2021 to 2025. Direct Air Capture and Sequestration (DACCS) accounted for ~61% (~$2.2B) of the total across 37 companies in 51 deals. Biomass Carbon Removal and Storage (BiCRS) accounted for ~15% (~$538M) across 33 companies in 36 deals. Investment into Mineralization startups accounted for ~14% (~$519M) across 18 companies in 24 deals; followed by Marine Carbon Dioxide Removal (mCDR) at ~6% (~$226M) from 17 companies across 21 deals; and lastly Enhanced Weathering at ~3% (~$121M) from 9 companies across 12 deals.

Viewed cumulatively, capital allocation across carbon removal technologies has been heavily skewed toward DACCS, despite the growing diversity of approaches aimed at achieving durable carbon removal.

Taken together, the breakdown by CDR method reinforces the broader pattern observed at the category level: capital remains concentrated in a small number of approaches, while a long tail of methods continues to attract more modest but persistent levels of private investment.

Yearly Investment by Category

The number of private investment deals in CDR startups increased steadily from 2021 through 2024, rising from 10 deals in 2021 to 47 deals in 2024, before declining to 37 deals in 2025. This represents a 370% increase in deal activity over the four-year period from 2021 to 2024 and a -21% drop from 2024-2025.

DACCS led in deal count every year during the period. BiCRS and Mineralization consistently accounted for a meaningful share of deals, while mCDR and Enhanced Weathering remained smaller but persistent contributors. Although deal activity peaked in 2024, the number of deals announced in 2025 remained higher (~9%) than in 2023.

In dollar terms, DACCS dominated total capital invested in every year between 2021 and 2025, particularly in 2022 and 2023. Total investment peaked in 2023 at approximately $1.2B, following a sharp increase from roughly $105M in 2021 to $917M in 2022.

The decline observed in 2024 and 2025 reflects, in part, the absence of large disclosed mega-rounds that characterized earlier years, as well as a broader cooling in climate technology investment. Capital flows into BiCRS, Mineralization, mCDR, and Enhanced Weathering followed flatter trajectories over the same period.

Overall CDR Investment by Geography

Investment into U.S.-based CDR companies led both in total capital raised and number of deals between 2021 and 2025. Altogether, 53 U.S. companies raised approximately $1.9B across 67 deals. Switzerland ranked second in total capital raised, driven largely by a small number of large rounds, despite a limited number of deals.

Canada, Germany, the United Kingdom, and Australia formed a secondary tier, together raising approximately $564M across 37 deals from 28 companies. Overall, capital concentration was stronger than deal concentration, with late-stage capital particularly concentrated in the United States, while early-stage activity was more evenly distributed across geographies.

Yearly Investment by Stage

Across the five-year period, Seed and Series A rounds accounted for the majority of investment deals, while Series B and Growth-stage rounds remained relatively rare and concentrated among a small number of companies. This distribution reflects the early-stage profile of the CDR company landscape.

In contrast, total capital deployed was dominated by late-stage and undisclosed rounds. Investment peaked in 2023, driven largely by large Series B, Growth, and undisclosed rounds totaling over $1B.

Following this peak, total investment in earlier stages (pre-seed, seed, and Series A) declined in absolute terms, falling by approximately 48% from roughly $571M in 2024 to about $292M in 2025. In 2025, early-stage rounds accounted for approximately 41% more capital than in 2023, rising from around $207M, indicating a shift in capital composition, as late-stage activity slowed, rather than a reversal in early-stage activity.

Average deal size increased sharply with funding stages. Across the period, average round sizes were approximately $1.3M for pre-seed rounds, $6.2M for seed rounds, $24.5M for Series A rounds, and $52M for Series B rounds.

These averages are heavily influenced by a small number of large, DAC-focused late-stage rounds, and median deal sizes would be substantially lower. Nonetheless, the data highlights the significant funding gap between early-stage and later-stage CDR companies and underscores how capital requirements at later stages extend beyond the capacity of traditional venture capital alone.

The number of active investors participating in CDR funding rounds increased rapidly between 2021 and 2023, before peaking in 2024 and declining in 2025. Over the same period, deal activity continued to grow through 2024 and remained elevated in 2025.

This divergence suggests increasing capital concentration and consolidation, with fewer investors participating in a similar number of deals, and a growing role for repeat investors as the market matures.

Linking Investment - Trends to Realities

The investment patterns observed between 2021 and 2025 align closely with financing challenges identified in The State of Durable CDR Financing, which surveyed suppliers across the durable carbon dioxide removal ecosystem.

The prevalence of early-stage deals alongside a scarcity of late-stage rounds reflects a mismatch between conventional venture capital models and the financing needs of durable CDR companies. Survey respondents noted that traditional equity and debt instruments are often poorly suited to long development timelines, high upfront capital requirements, and delayed revenues. This helps explain why Seed and Series A rounds dominate deal activity, while Series B+ and Growth-stage financings remain limited.

Investor participation per deal declined sharply over the period. The average number of investors per financing round fell from 11.3 in 2022 to 3.5 in 2025, indicating increasing capital concentration among a smaller group of active investors. Despite a similar number of deals in later years, fewer investors participated in each round, consistent with supplier-reported difficulty in attracting investors willing to accept the technical risk and long time horizons associated with durable carbon removal. As a result, repeat participation by a smaller pool of investors has become more common.

After peaking in 2023, total capital deployed reverted from unusually high levels in 2024 and 2025, even as deal activity remained elevated. Survey responses indicate that many companies were raising capital to sustain operations rather than to support large-scale deployment. This aligns with the observed shift toward smaller rounds and a higher relative share of early-stage capital as late-stage activity slowed.

The financing report further identified a persistent “missing middle” in CDR investment, particularly a lack of investors regularly writing $1–5M checks. This gap helps explain the sharp drop-off between early-stage funding and later-stage rounds observed in the investment data, reinforcing the structural early-stage skew across the five-year period.

Interdependence between financing and offtake commitments further constrains capital deployment. Suppliers reported that investors often seek offtake commitments before investing, while buyers seek financing certainty before entering long-term contracts. These dynamics may favor methods with clearer commercial pathways and contribute to continued capital concentration by method.

Of the 114 CDR companies that raised private capital between 2021 and 2025, four have since ceased operations, all of which raised funding between 2021 and 2023. While the number remains small, this concentration among earlier cohorts reflects the challenges faced by the first movers operating in the nascent market environment.

Company-level order and delivery data further illustrate these constraints. Among companies that have raised private capital, approximately 55% have sold carbon removal credits, yet only 24% have delivered tonnes, and just 12% have retired tonnes. While a majority of funded companies have achieved some level of commercial traction through credit sales, far fewer have progressed to delivery and retirement, highlighting the structural challenges of translating financing and offtake into verified, durable removals at scale.

Notes on the Data

The analysis excludes government and philanthropic grants, project and infrastructure financing, mergers and acquisitions, and debt financing. Investment is attributed based on the company headquarters rather than the project location, and companies are classified by their primary CDR method.

This analysis reflects announced transactions only. A number of private, undisclosed or confidential deals are not captured in the dataset.

Acknowledgments

Thank you for exploring the CDR.fyi - Investment Landscape in Carbon Removal 2026 report.

Data, analysis, and content for this report was prepared by Tank Chen.

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