The importance of Carbon Dioxide Removal (CDR) for reaching the Paris Agreement goals is well recognized, not least in the IPCC Assessment Reports. In recent years, CDR methods have been rapidly developing at all levels of implementation, from research and development to full-scale projects delivering removals on the ground. Between 2013 and 2023 it is estimated that 2,200 MtCO₂ per year was moved into durable storage from the atmosphere as a result of human activity, vast majority (99,9%) of which was achieved using conventional CDR methods. Despite this rapid growth, there is a significant and growing carbon removal gap between announced projects and scenarios compatible with temperature rise limited to 1.5 degrees Celsius. This gap is exacerbated by the failure of the world economies to reduce emissions.

CDR deployment is necessary for achieving the Paris Agreement goals, however it cannot replace emission reduction efforts. High overshoot scenarios would require scale of deployment of CDR that may not be feasible due to technical, social or environmental considerations.

In all scenarios compatible with the Paris Agreement, the CDR sector needs to rapidly scale up. To that end, it needs to develop sustainable and attractive business models, to attract private investment which can complement state support.

This document aims to identify and describe existing and emerging business models in both novel and conventional CDR methods. It identifies characteristics of these business models, looking at revenue streams, financing and funding sources, capital structure and risk management. It also analyses policy frameworks to an extent in which they enable specific business models. In a separate chapter it also explores how Monitoring, Reporting and Verification (MRV) frameworks influence the viability and structure of the business models.

The analysis shows a diverse range of possible business models, which vary across and within technologies. The role of carbon credits for business models has been of particular importance. For some technologies, like Bioenergy with Carbon Capture and Storage (BECCS) or Direct Air Carbon Capture and Storage (DACCS), carbon credits are an important revenue stream. For others, they are of limited importance (particularly for conventional CDR methods). Public policy framework is crucial for economic viability of all technologies. Business models also vary due to the differing maturity of specific technologies, as well as required infrastructure and complexity of MRV protocols.