New research from the Carbon Business Council finds that corporates see carbon dioxide removal (CDR) as essential to reaching net zero, but they are holding back on investment until policy and reporting rules become clearer.
This data comes from 25 in-depth interviews with senior sustainability leaders across Fortune 1,000 companies in the UK, US, Germany and France, all with net zero commitments but no formal CDR purchasing strategies.
Led by Bellwether Research, this deep-dive effort found that while these companies consider carbon removal essential for net zero, they are still waiting on clearer policy rules to justify meaningful near-term investment.
In terms of policy, the companies voiced concerns that if they do buy CDR credits today, those credits might not be regonized under future reporting or regulatory frameworks.
The European interviewees frequently cited uncertainty around the Corporate Sustainability Reporting Directive (CSRD) and Green Claims Directive, while in the US, respondents pointed to political volatility and the absence of clear federal direction as contributors to this “wait and see” market.
A notable finding is that the companies said mandatory purchasing requirements, even at low initial levels, would be one of the most effective ways to create a predictable, stable market signal for the CDR industry.
Talking about other motivating factors, the respondents also named financial incentives – such as tax relief and subsidy mechanisms, similar to those used for solar and wind – as important tools to improve cost competitiveness and support early CDR market growth.
The research revealed that both government policy and corporate framework play distinct roles in driving CDR investment.
Relevant: New CDR.fyi Report Shows The Demand Structure And Role Of Major Buyers In Durable Removals
While governments set the targets, regulation and incentives, frameworks like the Science Based Targets initiative (SBTi) and the Corporate Sustainability Reporting Directive (CSRD) are increasingly decisive in shaping corporate behaviour.
With updates expected to come this year for the EU Emissions Trading System and the Science Based Targets initiative’s Corporate Net Zero Standard, the publication signals that the window for policy leadership is now.
Early policy clarity and demand signals, the research states, will play a key role in determining how quickly carbon removal can scale from emerging market to established climate solution.
Read more: ClimeFi Launches Its New Due Diligence Coverage Platform, Easing Buyers With CDR Decisions
