New carbon removals fund aims to spur project development

illuminem summarises for you the essential news of the day. Read the full piece on Trellis or enjoy below:

🗞️ Driving the news: Terraset, a non-profit focused on durable carbon removal, has launched a revolving fund to support early-stage carbon removal projects through pre-purchase agreements
• The fund, seeded by a grant from the Schmidt Family Foundation, recently completed its first round of credit pre-purchases from five companies, including Eion and Charm Industrial
• Sales proceeds from future resale of these verified credits will be reinvested, aiming to make the fund self-sustaining

🔭 The context: Despite technological advancements in carbon removal, early-stage projects face persistent financing barriers
• Traditional offtake agreements rarely include upfront payments, leaving developers without sufficient capital to construct facilities or scale operations
• Terraset’s model provides bridge financing, shifting financial risk away from corporate buyers while enabling earlier market entry for high-quality projects

🌍 Why it matters for the planet: To meet Paris Agreement goals, the world must remove up to 9 billion tons of CO₂ annually by mid-century
• Unlocking early-stage capital is critical to achieving the scale needed
• Terraset’s fund provides a replicable mechanism for channeling private and philanthropic funding into high-impact, verifiable carbon removal solutions—especially in emerging approaches like enhanced weathering and biomass conversion
• However, sustained performance and buyer confidence remain essential to ensure long-term viability

⏭️ What's next: Terraset plans to deliver credits from this first funding round between 2026 and 2027, followed by resale to corporate buyers aligned with net-zero targets
• If resale prices match pre-purchase costs, the fund could become evergreen, expanding its catalytic impact
• However, capital constraints remain a challenge, and Terraset may be selective in funding new applicants unless additional philanthropic or blended finance sources emerge
• CEO Adam Fraser is set to discuss the initiative further at the VERGE climate conference in October

💬 One quote: “Let’s say we only got 50 percent of the money back. It’s still going significantly further than if we do a one-and-done purchase and that’s the end of the road.” – Adam Fraser, CEO, Terraset

📈 One stat: To stay on a Paris-aligned pathway, the world must remove an estimated 7–9 billion tons of CO₂ from the atmosphere each year by 2050 (IPCC)

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