What carbon removal suppliers need most in 2025
Insights from a survey of fifty CDR startups.
The carbon removal (CDR) market is at a pivotal moment. With durable CDR credit demand projected to reach up to 100M tons annually by 2030, suppliers should be scaling rapidly——but doing so means overcoming high costs, slow capital deployment, and a risk-averse investment market.
To understand the funding gaps holding CDR back, Terraset surveyed over 50 suppliers across technologies, geographies, and growth stages. Their response was clear: without more early-stage capital and stronger demand signals, growth will stall.
What's holding suppliers back (and what could move them forward).
Here’s what we heard:
Biggest underfunded areas:
Production scaling (50% of suppliers surveyed) – Suppliers need capital to build facilities, expand operations, and meet growing demand—even those successfully bringing in revenue.
Research & development (38%) – Without more R&D funding, suppliers can’t reduce costs or improve efficiency.
Commercialization & market entry (24%) – It’s possible the next big idea is stuck in pilot mode, unable to reach the revenue-generating stage.
Top capital barriers:
High upfront costs (54%) – From facility construction to supply chains, suppliers need capital long before they generate significant income.
Lack of early revenue (54%) – Without revenue, reinvestment stalls—slowing the entire market.
Investor caution (42%) – Investors hesitate to fund unproven technologies, leaving suppliers stuck in limbo.
Preferred funding mechanisms—Beyond (critical!) early purchases, those we surveyed are looking for:
Recoverable grants (70%) – Non-dilutive capital that suppliers can repay if they succeed.
Low-interest loans (64%) – Reducing risk with better debt terms makes growth more feasible.
Equity investments (60%) – Still relevant, but less appealing than flexible, non-dilutive funding.
Non-financial needs—Money isn’t the only missing piece:
Market development & introductions (84%) – Finding buyers is just as critical as securing funding.
Regulatory & policy guidance (44%) – Evolving policies create uncertainty. Suppliers need help navigating them.
Networking & mentorship (30%) – Industry expertise and connections can accelerate growth.
Scaling CDR is urgent.
Every major climate model agrees: we can’t reach net zero without carbon removal. Yet, despite projections that durable CDR demand could hit 100 million tons annually by 2030, current capacity is still three to ten times lower than what’s needed. Supply isn’t ramping fast enough.
The problem isn’t innovation—it’s capital. Suppliers are ready to scale, but funding isn’t moving fast enough to build this industry in time. Even suppliers with offtake agreements face the same fundamental challenge: capital is needed before production ramps up, not just after contracts are signed.
Government funding is sporadic. A handful of corporate champions—like Microsoft, JPMorgan Chase, Airbus, Shopify, SwissRe and Frontier’s advance market commitment from Stripe, Google, Shopify, Meta and McKinsey—are leading the way, but 92% of suppliers struggle to secure consistent corporate funding, and 62% cite weak demand signals as a major barrier. Without early capital, deployment stalls, costs stay high, and the broader market fails to take off.
This isn’t just a market gap—it’s a climate risk. Every year of underinvestment makes it harder and more expensive to reach necessary climate targets. CDR must scale now to drive down costs, attract more buyers, and establish the infrastructure needed for gigaton-scale impact.
“The upfront cost of building infrastructure is staggering, and without early funding, we simply can’t meet the demand we know is coming.” — Martin Freimüller, CEO & Co-Founder at Octavia Carbon.
Philanthropy is a powerful solution.
70% of suppliers see recoverable grants as a game-changer, and 64% highlight the need for low-interest loans. These tools are ideally suited for philanthropic or mission-aligned capital.
“In the evolving climate capital stack, philanthropy is innovating new models of climate finance. From first-loss capital to advanced market commitments, donors are now the risk-takers fueling carbon removal and breakthrough innovation.” — Sophie Purdom, Managing Partner at Planeteer Capital & Co-Founder at CTVC
Philanthropy can de-risk early investments and accelerate deployment. By backing infrastructure and R&D at critical stages, funders lower costs, unlock private capital, and ensure CDR scales in time to make an impact.
What this means for funders.
If you’re a donor-advised fund, climate-focused foundation, or corporate sustainability leader, this data makes a few things clear:
Early action leads to long-term savings. Funding pre-purchases, early-stage R&D, and facility development drives down future costs for governments, companies, and communities alike.
Blended financing enables flexibility growth. Recoverable grants and low-interest loans give suppliers the runway to develop, test, and refine their technologies without diluting ownership or sacrificing long-term goals.
Strong demand signals accelerate scale. Suppliers need reliable offtake commitments and buyer introductions. Market development support from philanthropic intermediaries or corporate champions reduces uncertainty.
Terraset increases the flow of philanthropic capital into carbon removal.
We do this by:
Executing strategic purchases – Sending demand signals and giving early-stage projects resources to scale.
Expanding funding pathways – Exploring new finance models like recoverable grants and low-interest loans to de-risk early-stage growth.
Fostering market development – Connecting suppliers with corporate buyers, policy experts, and industry networks to unlock the next wave of growth.
Funding today doesn’t just remove carbon—it builds the market that will define the future of climate action. Philanthropy has a once-in-a-generation opportunity to lead. We’re meeting that challenge head on.