Preface

This report is based on the findings of the Carbon Finance Pulse Survey, a collaboration between Planet2050 and CDR.fyi between August and September 2025. The survey was specifically designed to understand the current state and challenges encountered by durable Carbon Dioxide Removal (CDR) project developers in raising financing.

Purpose and Scope

Recognizing that securing growth financing is a primary hurdle for the sector, the survey targeted only durable CDR suppliers and project developers. Participants in Planet2050’s Permanent CDR RFP and project developers in CDR.fyi’s community were invited to participate.

The core objective was to aggregate confidential insights into the financing expectations and timelines of these companies, along with their most pressing challenges. The results help identify key financing gaps and specific interventions that different CDR stakeholders can take.

Highlights

Funding Crunch: Most suppliers are racing to raise funds within the next six months, revealing acute near-term pressure to secure capital just to maintain operations and retain staff.
Overreliance on Grants: Grants and subsidies remain the most sought-after funding source, even as availability has tightened — suggesting that many suppliers may be counting on capital that will not materialize at the pace they need.
Structural Mismatch: Traditional debt and venture structures rarely fit the realities of durable CDR, where long timelines, upfront costs, and uncertain revenue clash with investor expectations for quick returns. Innovative models remain rare, but are emerging.
Capital Gaps: A missing “middle layer” of investors — those writing $1–5M checks — leaves early-stage projects stranded between philanthropy and large institutional finance. This gap slows the transition from proof of concept to scale.

Analysis

A Sense of Urgency

Suppliers in our survey are disproportionately seeking funding in the next 6 months. Specifically, 70% intend to raise funds within 6 months, and 43% within the next 3 months, i.e. by the end of the year. For context, in CDR.fyi and Sylvera’s Market Outlook Survey (published in January of 2025), only 64% of companies had plans to raise at any point in the entire year.

A hopeful explanation for this difference is that companies and/or investors now believe ‘the dust has settled’ with recent governmental and other policy uncertainty. A more sobering – though not mutually exclusive – interpretation is that suppliers have encountered even more difficulty fundraising than they had anticipated so far this year. Relatedly, the depth of cuts to government support for CDR (especially for DACCS, and especially in the United States) likely exceeded suppliers' expectations in late 2024. This picture of urgent funding needs is consistent with the recent closure of Noya, a mid-sized DAC startup.

Regardless of the cause of this urgency, the coming months will likely be pivotal for suppliers who did not raise funding earlier in the year. In fact, the window of opportunity is even narrower than it appears. There is considerably less deal activity in the last 6 weeks of the year in most of the world’s financial hubs and in early-stage private equity. Unless suppliers find a way to keep the lights on, it is reasonable to anticipate an uptick in acquisitions (e.g. Occidental Petroleum - Holocene) and insolvencies, or ‘quiet quitting’ (e.g. Noya, Alkali).

Overly Optimistic?

For both company and project financing, the most consistently prioritized form of funding is Grants & Subsidies. For company and growth financing, 73% rate it as a top option; for project financing, 67% do so.

It is natural for companies to prioritize low-cost capital, especially if it does not cause any dilution. This may also reflect investor pullback that exceeds what companies expected. Given the US government’s dramatic reversal on climate-related subsidies, it is likely that most US respondents have private philanthropy in mind. However, there is reason to believe that suppliers' expectations in our survey are overly optimistic. In the CDR.fyi/Sylvera Market Survey published in March 2025, only 54% of suppliers reported plans to use grants and subsidies, but only 27% had previously received them. There is little reason to believe that grants and subsidies will be much more available in the current environment than they were a year ago. This suggests that a significant number of responding suppliers will be obliged to pursue alternative, higher-cost financing.

Top Supplier Financing Concerns

We asked suppliers, “What keeps you up at night” regarding company and project financing. In these open-ended sections, five key themes emerged.

The Cash Flow Trap: Survival vs. Progress

Suppliers described a persistent liquidity squeeze that forces hard tradeoffs between paying staff and funding the certification or MRV needed to generate revenue. This “vicious cycle” blocks progress and undermines investor confidence, creating a perception of fragility even for technically solid projects.

Investor Hesitation and Misalignment

Many suppliers report struggling to attract investors who understand the long development cycles, scientific rigour, and community co-benefits of durable CDR. Institutional interest has fallen off after early-stage failures and policy shifts, particularly in the US, and many investors still view the sector as too slow or unproven for venture timelines. The result is a shortage of “aligned capital” willing to back integrity-focused projects, particularly in the Global South or emerging markets.

The “Chicken and Egg” between Financing and Offtake

Respondents reported being stuck between investors demanding confirmed offtakes and buyers seeking proof of financing before committing. This interdependence delays project starts and reinforces a perception of market immaturity. The difficulty of coordinating these moving parts is one of the biggest structural challenges to scaling CDR.

Gaps in Appropriate Financial Instruments

Conventional debt structures rarely fit the realities of CDR operations, which involve high upfront CAPEX, long payback periods, and uncertain revenue timing. While some promising deal structures are emerging, such as the JP Morgan-Schmidt Foundation-Mati or Standard Chartered–British Airways-UNDO deals, most suppliers (especially smaller ones) don’t have access to these opportunities. The industry would benefit from specialized debt or hybrid instruments designed for early-stage project risk, with patient, creative lenders who are open to experimentation.

Missing Middle Capital and Access Barriers

Between early-stage grants and large-scale project finance, there is a void of mid-sized investors ($1–5M) who can help bridge proof-of-concept to scale. Lengthy diligence timelines, risk aversion, and reliance on intermediaries further strain suppliers’ ability to secure timely and suitable funding. Direct, flexible capital partnerships remain the exception rather than the norm.

Reading Between the Lines

The free-form responses present a mixed picture of CDR demand. A few respondents explicitly noted that demand for their credits is strong, implying that limited financing options are the main barrier to scaling. Others, however, cited insufficient demand, either for their specific method or for CDR more broadly, as a key obstacle to raising funds.

These perspectives reveal a hierarchy of priorities. Early-stage suppliers often view securing offtake agreements as a prerequisite to raising company financing. Once that hurdle is cleared, the challenge shifts toward obtaining capital to scale. Some of this variation may reflect price disparities between methods, but it may also point to a deeper market imbalance: while total CDR volume sold has increased, the number of unique buyers has not kept pace. Suppliers with offtake agreements from large buyers are struggling with fulfilment rather than demand, while fledgling suppliers are struggling to attract first-time customers — a trend that CDR.fyi and others in the market have been highlighting.

It is also important to interpret these findings in light of who responded. The survey sample skews heavily toward earlier-stage companies, which face more acute financing challenges and are more vulnerable to funding disruptions. One respondent attributed the current investment slowdown to failed Series A and B rounds among technically strong CDR firms, which have dampened institutional confidence and, in turn, discouraged seed investment. Evidence of this pullback is apparent across many responses.

Larger suppliers are not immune to financing difficulties, but they tend to fare somewhat better. Those raising larger rounds have typically secured funding before and earned the trust of patient, experienced investors. Meanwhile, smaller firms—often based in lower-income countries—report facing additional headwinds, including lower investor familiarity and perceived regional risk.

Takeaways for CDR Market Participants

CDR Suppliers & Developers

Focus on finance readiness.

Prioritize Multi-Revenue Streams: Structure contracts to be debt-ready by formally valuing non-carbon co-benefits (revenue stacking) and use aggregation platforms to lower costs, specifically targeting the mid-sized investor gap ($1M–$5M).
Demand Fair Capital: Seek funding for crucial "first builds", negotiate fair terms, and avoid capital that demands excessive control or unfavorable revenue-sharing.

Investors

Apply patient, nuanced capital, moving past perceived risk.

Bridge the Funding Gap: Offer milestone funding to bridge the 12–24 month pre-certification period and use technology-specific risk assessments to avoid applying high-risk premiums to mature pathways with higher delivery rates, such as biochar.
Champion Global Equity: Dedicatedly allocate capital to regional funds to address Global South risk and actively champion CDR success to limited partners to unlock larger institutional pools.

Banks & Financial Institutions

Standardize structures to transform offtakes into bankable collateral.

Standardize Contracts and De-Risking: Standardize offtake contracts for debt financing and mandate an insurance wrapper within them to stabilize future revenue streams and reduce lender risk.
Leverage Public Support: Leverage public guarantees (e.g. EIB) to de-risk debt entry at scale and develop structures for microfinance integration to reach grassroots Global South projects.

Corporate Buyers & Offtakers

Provide the revenue certainty necessary to unlock all other capital.

Provide Immediate Certainty: Offer upfront prepayments and commit to guarantee-backed long-term offtakes (10+ years/price floors) to resolve timing mismatches and secure debt.
Fund Pilot Risk & Co-benefits: Take calculated pilot-phase risk on lower-maturity projects and explicitly pay a premium for verified co-benefits (jobs, land restoration) from Global South projects.

Policymakers & Public Agencies (Market Enablers)

Reduce bureaucracy, provide certainty, and focus support on early stages.

Implement Risk-Sharing and Standards: Introduce Carbon Contracts for Difference (CCfD) or price floor guarantees to stabilize prices, and streamline MRV standards to reduce developer costs.
Focus Grants Equitably: Shift grants toward low-cost feasibility/CAPEX for "first builds" and mandate Global South equity and simplified access paths in all funding initiatives.

Methodology

The survey is structured into two main parts: one focusing on Company Funding and the other on Project Financing, recognizing that both are essential to enabling CDR project growth. The results presented in this report are shared exclusively in an aggregated and anonymous form. All responses were kept strictly confidential between the two partner organizations.

Respondents

There were 159 respondents to the survey: 98% were direct project developers, and 2% were strongly involved as project financing or deployment partners. The final dataset comprised 126 valid records after excluding 33 unreliable responses. Respondents were disproportionately smaller suppliers, with 78% looking to raise <$10M in their next funding round, and a majority (62%) of Biochar carbon removal companies. Themes identified in this survey are best understood in light of this distribution.

Acknowledgments

Thank you to Lucas Zaehringer, Esther Val, Oneza Zaim, and Johannes Pulfort from Planet 2050, and Matt Soens, Tank Chen, Isaac Che, and Alexander Rink from CDR.fyi for their contributions to this survey and report. For questions about the survey or methodology, please contact team@cdr.fyi or hello@planet2050.com.

A full version of the report is also available for free to all those who sign up through the pop-up form on this page. Please REFRESH the page in case the pop-up window for does not appear for you or contact us at team@cdr.fyi.

The State of Durable CDR Financing: Insights from the CDR.fyi x Planet2050 Survey