Carbon Removal (CDR)

If your company has set—or is about to set—a net-zero target, carbon dioxide removal is no longer optional reading. The SBTi's draft Corporate Net-Zero Standard V2 will require large companies to procure carbon removals starting in 2035, with volumes rising every year until they fully neutralise residual emissions. The EU's Carbon Removal Certification Framework (CRCF) entered force in December 2024 and will begin certifying removal credits by 2026. And CSRD already requires you to disclose your removal activities separately from your emission reductions—no netting allowed.

The question is no longer whether your company needs carbon removal. It is how much, what kind, and how soon you need to start buying it.

This guide explains what CDR actually is, why every credible net-zero pathway depends on it, what the main approaches look like in practice, what regulators and standard-setters expect from you, and how to build a removal strategy that holds up under audit.

What Carbon Removal Actually Is (and Isn't)

Carbon dioxide removal (CDR) means deliberately taking CO₂ that is already in the atmosphere and storing it somewhere durable—underground, in soils, in biomass, in minerals, or in long-lived products. The IPCC defines it as "anthropogenic activities removing CO₂ from the atmosphere and durably storing it in geological, terrestrial, or ocean reservoirs, or in products."

That definition sounds simple, but in corporate sustainability discussions three terms get confused constantly: CDR, carbon capture and storage (CCS), and carbon offsets. Getting them straight matters, because they count differently in your reporting and your climate claims.

CDR vs. CCS. Carbon capture and storage (CCS) captures CO₂ at an industrial source—a cement kiln, a gas-fired power plant, a steel furnace—before it enters the atmosphere. It stops new emissions from being released. CDR, by contrast, removes CO₂ that is already in the atmosphere. CCS reduces the flow of CO₂ into the air. CDR reduces the stock of CO₂ that is already there. Both are needed, but they serve different purposes: CCS helps decarbonise hard-to-abate industrial processes, while CDR addresses the residual and historical emissions that CCS cannot touch. Under CSRD and SBTi, they are reported and treated differently.

CDR vs. carbon offsets. "Carbon offset" is a market term, not a scientific one. It can refer to almost anything—avoided deforestation, cookstove distribution, renewable energy certificates, or actual carbon removal. CDR is a specific subset: credits that represent CO₂ physically removed from the atmosphere. Under the SBTi's draft V2 standard, only removal credits (not avoidance or reduction credits) can be used to neutralise residual emissions at net-zero. This distinction is becoming the dividing line between credits that will retain regulatory and market value and those that will not.

Where CDR sits in the mitigation hierarchy. CDR is not a substitute for cutting emissions. Every credible framework—SBTi, IPCC, the Oxford Offsetting Principles—places deep emission reductions first. Companies must reduce 90–95% of their value chain emissions before removals enter the picture. CDR exists to deal with the remainder: the emissions from sectors like cement, aviation, agriculture, and heavy industry where full elimination is not technically or economically feasible by mid-century.

Why Carbon Removal Is Non-Negotiable

Three facts explain why CDR has moved from a fringe topic to a corporate planning requirement.

The physics. Certain industrial processes—cement production releases CO₂ from limestone chemistry, not just from energy use; ruminant agriculture produces methane as a biological byproduct; long-haul aviation has no viable zero-emission alternative at scale—will still produce greenhouse gas emissions in 2050 even under aggressive decarbonisation scenarios. Net-zero means total emissions minus total removals equals zero. Without CDR, "net" zero is arithmetically impossible for the global economy, and for most individual companies with complex value chains.

The IPCC position. The Intergovernmental Panel on Climate Change states in its Sixth Assessment Report (AR6, Working Group III) that CDR is "unavoidable" in all modelled pathways that limit warming to 1.5°C. The median scenario requires more than 300 gigatonnes of cumulative CO₂ removal by 2100. The IPCC is clear: this is not one possible pathway among many—it is a feature of every scenario that meets the Paris Agreement temperature goals.

The scale gap. According to the State of Carbon Dioxide Removal report (2nd edition, 2024), roughly 2 gigatonnes of CO₂ are being removed per year today, almost entirely through conventional methods like reforestation and soil management. The world needs 7–9 gigatonnes per year by 2050 to stay on track. Novel CDR approaches—biochar, direct air capture, enhanced rock weathering, ocean alkalinity enhancement—currently contribute roughly 0.0013 gigatonnes. That is a scaling gap of 25 to 100 times in less than 25 years. As the World Economic Forum's analysis puts it: global novel CDR capacity reached approximately 41 megatonnes per year as of 2023, far below the 1–1.5 gigatonnes required by 2030–2035 to align with net-zero pathways.

There is also a fourth reason that receives less attention: legacy emissions. Even if every country on earth stopped emitting CO₂ tomorrow, the roughly 2,500 gigatonnes of CO₂ already in the atmosphere would continue warming the planet for decades. CDR is the only tool that can address emissions that have already happened—not just those we are still producing.

The CDR Landscape: Approaches, Permanence, and Maturity

Carbon removal approaches vary enormously in how they work, how long they store carbon, how much they cost, and how ready they are for large-scale deployment. The most practical way to categorise them is by permanence—how long the carbon stays out of the atmosphere—since this is the axis that regulators, standard-setters, and auditors care about most.

Nature-Based Approaches (Decades to Centuries)

These approaches enhance the biological carbon cycle—trees, soils, wetlands, oceans—to draw down more CO₂ than they would naturally.

Afforestation and reforestation plant trees on land that was either never forested or was previously deforested. Trees absorb CO₂ through photosynthesis and store it in biomass and soils. Well-managed forestry projects can store carbon for decades to centuries, but face reversal risks from wildfires, disease, land-use change, and climate impacts on forests themselves. Costs are relatively low (typically under €50 per tonne), and co-benefits include biodiversity, watershed protection, and rural livelihoods.

Soil carbon sequestration involves changing agricultural practices—cover cropping, no-till farming, composting, agroforestry—to increase the amount of carbon stored in soil organic matter. Storage permanence is uncertain and highly variable depending on continued management practices. If a farmer reverts to conventional tillage, stored carbon can be released within years. Monitoring and verification remain challenging.

Peatland and wetland restoration rewets drained peatlands and restores coastal wetlands (mangroves, salt marshes, seagrass beds). Intact peatlands are massive carbon stores; drained ones are significant emission sources. Rewetting stops ongoing emissions and can gradually rebuild carbon stocks over decades.

Nature-based approaches tend to be cheaper and deliver significant co-benefits—biodiversity, water quality, community livelihoods—but their permanence is inherently less certain. Carbon stored in biomass and soils can be released by fire, drought, land-use change, or simply by stopping the management practice that put it there.

Senken Academy deep-dives: Afforestation and Reforestation, Peatland Restoration, Blue Carbon, Regenerative Agriculture

Hybrid and Bio-Geological Approaches (Centuries to 1,000+ Years)

These approaches combine biological carbon capture with more durable storage mechanisms.

Biochar is produced by heating biomass (crop waste, wood residues, manure) in a low-oxygen environment through a process called pyrolysis. The result is a stable, carbon-rich solid that resists decomposition for centuries to millennia when added to soils. Biochar currently dominates the durable CDR market—it accounts for more than 90% of tracked durable carbon removal deliveries. Costs range from roughly €80 to €200 per tonne, depending on feedstock and production conditions. Biochar also improves soil health, water retention, and nutrient availability, which gives it a practical value proposition beyond climate. The main constraint is feedstock availability: scaling biochar globally requires large volumes of sustainable biomass.

Bioenergy with carbon capture and storage (BECCS) grows biomass that absorbs CO₂, burns it for energy, and then captures the CO₂ from the flue gas and stores it underground in geological formations. In theory, this produces energy while delivering net-negative emissions. In practice, BECCS faces serious questions about land use, water consumption, biomass sustainability, and the availability of geological storage sites near biomass resources. Few large-scale BECCS facilities are operating today.

Senken Academy deep-dive: Biochar

Geochemical Approaches (1,000+ Years)

These approaches accelerate natural geological processes that already remove CO₂ from the atmosphere, but far too slowly to address the climate crisis.

Enhanced rock weathering (ERW) spreads finely ground silicate or carbonate rock—often basalt—on agricultural land. As the rock dissolves in rainwater and reacts with CO₂, it forms stable bicarbonates that are eventually washed into the ocean and stored for thousands of years. ERW offers agricultural co-benefits: it can raise soil pH, supply plant nutrients like calcium and magnesium, and improve crop yields. Current costs range from roughly €100 to €200 per tonne. The main challenges are measurement, reporting and verification (MRV)—proving exactly how much CO₂ a given application actually removed is technically complex and still being refined.

Ocean alkalinity enhancement (OAE) adds alkaline substances (such as crusite lime or olivine) to seawater to increase its capacity to absorb and store CO₂ from the atmosphere. The ocean already absorbs about a quarter of human CO₂ emissions; OAE aims to enhance that natural process. Storage permanence is very high (thousands of years), but the approach is early-stage. As of late 2024, only around 730 tonnes of verified ocean-based removal had been delivered. Costs currently range from roughly $250 to $500 per tonne, and significant questions remain about ecological impacts on marine ecosystems.

Senken Academy deep-dives: Enhanced Rock Weathering, Ocean Alkalinity Enhancement

Engineered Approaches (1,000+ Years)

Direct air capture with storage (DACCS) uses chemical processes to pull CO₂ directly from ambient air, then compresses and injects it into deep geological formations for permanent storage. DACCS offers the highest certainty of permanence—once CO₂ is mineralised underground, it stays there for geological timescales. It also has a minimal land footprint compared to biological approaches. The tradeoff is cost and energy: current prices range from roughly $360 to over $1,800 per tonne, depending on the technology and energy source. As of 2024, around 2.47 megatonnes of DACCS capacity had been contracted through advance purchase agreements, but only about 1,186 tonnes had actually been delivered. The technology works; the challenge is building it at scale and bringing costs down through learning curves and deployment.

Senken Academy deep-dives: Direct Air Capture, Carbon Capture and Storage, Microbial Mineralisation

How to Think About This Portfolio

No single CDR approach solves the problem alone. Each has different strengths, limitations, and readiness levels. The Oxford Offsetting Principles—a widely referenced framework developed by the University of Oxford's Smith School—recommend that companies shift their removal portfolios toward higher-permanence approaches over time. In the near term, nature-based removals and biochar can provide volume at lower cost. Over the coming decade, as enhanced weathering, OAE, and DAC scale up and costs decline, the share of durable, high-permanence removals in a portfolio should increase.

This is not a theoretical preference. The SBTi's draft V2 standard explicitly requires that at net-zero, 41% of a company's neutralisation portfolio must consist of long-lived removals (centuries to millennia of storage), with the remaining 59% from shorter-lived approaches. Companies that buy only nature-based credits today and ignore the durable end of the spectrum will face a supply crunch when the rules tighten.

What Regulators and Standard-Setters Expect

Four frameworks shape how European companies must think about carbon removals. They interact with each other, and understanding those interactions is important for building a procurement strategy that works across all of them.

SBTi Corporate Net-Zero Standard

The Science Based Targets initiative's Corporate Net-Zero Standard is the most widely adopted framework for corporate net-zero target-setting, used by over 11,000 companies globally.

Current standard (V1.3): Companies must reduce 90–95% of their value chain emissions. The remaining residual emissions must be neutralised with carbon removals. Beyond-value-chain mitigation (BVCM)—purchasing credits to address emissions not yet reduced—is encouraged but voluntary.

Draft V2 (second consultation closed December 2025; final standard expected mid-to-late 2026): The draft introduces significant changes. "Beyond value chain mitigation" is being replaced by an "Ongoing Emissions Responsibility" (OER) framework. Until 2035, companies can voluntarily address their ongoing emissions through carbon credits or climate finance contributions, earning either "Recognised" status (addressing at least 1% of ongoing emissions) or "Leadership" status (addressing at least 40%). From 2035, Category A companies—large companies in all countries and medium-sized companies in high-income countries—must mandatorily address an increasing share of their ongoing emissions through carbon removals, starting at a minimum of 1% and rising linearly to 100% by the net-zero target year. At net-zero, the neutralisation portfolio must contain at least 41% long-lived removals (storage of centuries to millennia) and 59% shorter-lived removals.

Two critical points: first, after 2035, only removal credits can be used for neutralisation—avoidance and reduction credits will no longer qualify. Second, companies must publicly disclose whether they are taking responsibility for their ongoing emissions, and if they choose not to, they must explain why. This "comply or explain" mechanism is designed to create pressure even before the 2035 mandate kicks in.

The final standard will become mandatory for all companies setting new science-based targets from January 2028.

CSRD and ESRS E1-7

The EU's Corporate Sustainability Reporting Directive (CSRD) and its accompanying European Sustainability Reporting Standards (ESRS) require large EU companies and non-EU companies with significant EU operations to report on their climate-related impacts, risks, and targets.

For carbon removal, the key provision is ESRS E1-7, which governs the disclosure of GHG removals and mitigation projects financed through carbon credits. The rules are explicit:

Companies must report gross emissions separately from removals. No netting is allowed—you cannot subtract purchased removal credits from your reported emissions to make your numbers look smaller. Carbon removals and carbon credits must be disclosed as a separate line item, with detailed information about the type of removal, the standard or certification used, the permanence of storage, and how additionality was assessed. Credits cannot be counted toward emission reduction targets. They sit in a separate disclosure bucket. This separation is designed specifically to prevent greenwashing: investors, auditors, and regulators want to see your actual emissions trajectory and your credit purchases independently.

For sustainability teams preparing CSRD reports, this means your CDR procurement needs proper documentation from day one—not just a receipt from a credit registry, but evidence of quality, permanence, additionality, and alignment with recognised standards.

EU Carbon Removal Certification Framework (CRCF)

The CRCF (Regulation EU 2024/3012) entered force on 26 December 2024 and establishes the first EU-wide voluntary certification framework for carbon removals. It covers three categories of activities: permanent carbon removals (DACCS, BECCS, biochar—storage for "several centuries"), carbon farming (soil carbon, agroforestry, peatland restoration—temporary storage with monitoring requirements), and carbon storage in long-lasting products (timber in buildings, bio-based construction materials—minimum 35 years).

To receive CRCF certification, activities must meet four quality criteria that the regulation abbreviates as "QU.A.L.ITY": accurate quantification of the net carbon removal benefit, additionality beyond standard practice and legal requirements, long-term storage with monitoring and liability provisions, and sustainability—meaning the activity must not cause significant harm to other environmental objectives and must deliver at least one co-benefit.

The first certification methodologies—for DACCS, BECCS/BioCCS, and biochar—are expected via delegated acts in 2026. An EU-wide registry will launch by December 2028, tracking every certified unit to prevent double-counting. The European Commission also announced plans for an EU Buyers' Club to aggregate demand for CRCF-certified removal credits.

For companies operating in Europe, CRCF is becoming the baseline for what counts as "credible" carbon removal. It will shape CSRD audit expectations, interact with SBTi's V2 requirements, and likely influence how credits are treated under the EU Emissions Trading System if CDR is eventually integrated there.

ICVCM Core Carbon Principles

The Integrity Council for the Voluntary Carbon Market (ICVCM) sets quality benchmarks for the broader voluntary carbon market through its Core Carbon Principles (CCPs). CCP-labelled credits must meet thresholds for additionality, permanence, robust quantification, and sustainable development. While the ICVCM covers both avoidance and removal credits, its permanence and MRV requirements are particularly relevant for CDR: they provide a market-level quality signal that complements the regulatory frameworks above.

How These Frameworks Interact

These four frameworks are converging on a consistent set of expectations: removals must be additional, measurable, durable, and reported transparently. Companies that align their procurement with CRCF quality criteria and ICVCM Core Carbon Principles will be well-positioned across SBTi and CSRD requirements simultaneously. The common thread is that the bar for what counts as a "credible" removal credit is rising steadily, and it will continue to rise through 2030 and beyond.

Building a CDR Strategy That Survives Audit

Knowing what CDR is and what regulators expect is the first step. Translating that knowledge into a procurement strategy that your auditors, your board, and your stakeholders will accept requires a more structured approach.

Start with your residual emissions estimate. Before you can determine how much removal capacity you need, you need a credible estimate of what your emissions will look like after you have done everything feasible to reduce them. For most companies, residual emissions at net-zero fall in the range of 5–10% of current total emissions. Work with your reduction pathway to project what those residual emissions will be by your net-zero target year, broken down by source and scope.

Build a portfolio, not a single bet. No single CDR approach can deliver everything a corporate strategy needs. Nature-based removals and biochar offer relatively lower costs and near-term availability but lower permanence certainty. DACCS and geological storage offer the highest permanence but are expensive and supply-constrained. A sound portfolio blends approaches across permanence levels and price points, adjusting the mix over time as technology matures and costs decline—consistent with the Oxford Offsetting Principles' recommendation to shift toward more durable removals as your net-zero date approaches.

Plan for the 41/59 split. If the SBTi V2 standard is finalised with the current draft provisions, your neutralisation portfolio at net-zero must contain at least 41% long-lived removals (DACCS, biochar, BECCS, ERW) and 59% shorter-lived removals (nature-based). Start building relationships with suppliers on the durable end of the spectrum now, because supply is limited and lead times for high-permanence projects are long.

Secure supply through forward purchasing. The CDR market is supply-constrained and will remain so for years. Roughly 90% of demand for durable CDR currently comes from the voluntary carbon market, driven primarily by technology companies in the United States. As European regulatory requirements ramp up and more companies enter the market, competition for limited supply will intensify. Forward purchase agreements—committing to buy future removal credits at agreed prices—lock in supply and pricing while supporting project developers in securing the financing they need to build capacity. Waiting until 2035 to start buying means entering a seller's market with less negotiating power and fewer options.

Document everything for CSRD. Every credit you purchase should come with documentation sufficient for ESRS E1-7 disclosure: the methodology or standard used, the certification body, evidence of additionality, the expected permanence of storage, MRV protocols, and any reversal risk provisions. Build this documentation practice into your procurement process from the start rather than trying to reconstruct it before your first assurance engagement.

Apply due diligence beyond certification. CRCF certification and ICVCM CCP labels provide a quality floor, not a ceiling. Companies serious about avoiding greenwashing risk—particularly in Germany, where courts have ruled that "klimaneutral" claims require in-ad clarification—should layer additional due diligence on top of standard certifications. This means evaluating the project developer's track record, the robustness of the MRV approach, the presence of independent third-party verification, and the alignment of the project with your specific reporting and claims strategy.

Conclusion

Carbon removal is moving from the edge of corporate climate strategy to its centre. The regulatory trajectory is clear: SBTi will make removal procurement mandatory for large companies from 2035, CSRD already requires transparent disclosure, and CRCF is building the certification infrastructure that will define quality in Europe.

Companies that act now—estimating their residual emissions, diversifying their removal portfolios, securing forward supply, and building audit-ready documentation—will be better positioned than those that wait. They will have access to a wider range of suppliers, better pricing, and the operational experience to navigate a compliance landscape that will only become more demanding.

The scaling gap between where CDR capacity stands today and where it needs to be by 2050 is enormous. Closing it requires both public investment and private procurement. Every tonne of removal purchased today helps fund the infrastructure, technology development, and cost learning that the entire market needs.