From fragmented deals to scale: what market infrastructure does carbon dioxide removal need?

illuminem summarises for you the essential news of the day, reviewed by our editorial team. Read the full piece on World Economic Forum or enjoy below:

🗞️ Driving the news: Carbon dioxide removal is moving toward industrial scale, but today’s market remains fragmented across standards, contracts, registries and jurisdictions, limiting its ability to attract institutional capital and scale efficiently

🔭 The context: Durable CDR methods such as direct air capture, bioenergy with carbon capture and storage, biochar and enhanced weathering currently remove less than 2MtCO₂ annually, far below the levels required on Paris-aligned pathways
• The proposed market architecture spans six interconnected layers covering asset quality, contracts, demand and financing, registries, market infrastructure, and governance
• Greater standardisation could reduce transaction costs while preserving necessary differences between technologies, permanence profiles and project risks

🌍 Why it matters: A functioning carbon market for removals could unlock larger pools of capital by making CDR assets easier to compare, finance, trade and manage across portfolios
• Policymakers are already building supporting infrastructure, with the EU advancing permanent-removal certification and considering links to the EU ETS, alongside new frameworks in the UK, Singapore and Switzerland

⏭️ What’s next: The market is expected to evolve through four stages, from establishing common practices and bankability to building transaction infrastructure and ultimately integrating CDR into a globally connected asset class capable of allocating capital across technologies and geographies

📈 One stat: Durable CDR currently removes less than 2MtCO₂ a year, compared with around 4GtCO₂ needed annually by 2035 on Paris-aligned pathways

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