The voluntary carbon market continues to shift away from short-term offset strategies toward durable carbon removal solutions, a trend underscored by a new agreement between carbon dioxide removal (CDR) provider Climeworks and Canadian financial institution TD Bank.
The 10-year agreement will see Climeworks supply a portfolio of high-quality carbon removal credits spanning multiple technologies, highlighting the growing role of financial institutions in supporting emerging carbon removal markets.
The deal arrives at a pivotal moment for the CDR sector. While demand for carbon credits remains substantial, scrutiny over the environmental integrity and permanence of conventional offset projects has intensified. As a result, buyers are increasingly prioritizing carbon removal pathways capable of storing carbon dioxide for decades or centuries rather than relying solely on avoided emissions claims.
Founded in 2009 and headquartered in Zurich, Climeworks has positioned itself as one of the most visible players in the carbon removal industry. The company operates the world’s first direct air capture (DAC) plants and has increasingly expanded beyond its proprietary technology. In 2024, it launched Climeworks Solutions, a service designed to provide customers with diversified carbon removal portfolios that combine several technologies and project types.
The TD Bank agreement reflects that broader strategy. Rather than relying exclusively on DAC, the portfolio will include a mix of high-durability carbon removal pathways such as enhanced rock weathering (ERW), biochar, and bioenergy with carbon capture and storage (BECCS). Climeworks will oversee project sourcing, due diligence, and ongoing portfolio management across North America.
This portfolio approach addresses one of the most significant challenges facing the carbon removal market: scalability. Direct air capture has attracted considerable attention due to its measurable and highly durable carbon storage potential, but commercial deployment remains constrained by high capital costs, energy requirements, and limited operating capacity. Diversifying across multiple removal pathways allows buyers to access larger volumes of carbon removal while reducing dependence on a single technology’s development timeline.
Enhanced rock weathering, for example, leverages natural geological processes by accelerating the weathering of minerals that absorb atmospheric carbon dioxide. Biochar converts biomass into a stable carbon-rich material that can store carbon for extended periods while potentially delivering agricultural benefits. BECCS combines bioenergy production with carbon capture and storage, offering the potential for net-negative emissions when sustainably sourced biomass is used. Each pathway presents distinct technical and economic considerations, but together they offer a broader supply base than DAC alone can currently provide.
For financial institutions, long-term procurement agreements are becoming an increasingly important mechanism for supporting the development of carbon removal infrastructure. Multi-year contracts provide developers with greater revenue certainty, helping unlock financing for projects that require significant upfront investment. Similar purchasing commitments from corporate buyers have played a critical role in accelerating renewable energy deployment over the past two decades, and carbon removal developers are seeking to replicate that model.
The agreement also highlights Canada’s growing importance in the carbon removal landscape. Earlier this year, Climeworks opened its Canadian corporate headquarters in Calgary, signaling a deeper commitment to the market. Canada offers several advantages for carbon removal deployment, including extensive geological storage resources, a relatively carbon-conscious policy environment, and growing interest from industrial and financial sectors in supporting decarbonization initiatives.
Climeworks indicated that future DAC credits supplied under the agreement could originate from one of its planned North American facilities. Before reaching that stage, however, the company is focused on cold-weather testing of its direct air capture technology, a step that could influence future commercial deployment decisions in Canada’s climate conditions.
The emphasis on testing reflects broader realities facing the DAC industry. Although the technology has demonstrated technical viability, questions remain regarding cost reduction trajectories, energy sourcing, infrastructure requirements, and the pace at which facilities can be scaled to meaningful climate impact. Industry analysts generally view DAC as a potentially important long-term decarbonization tool, but one that must achieve substantial cost declines before reaching gigaton-scale deployment.
