Why Banks and Airlines Are Becoming the Anchor Buyers in Carbon Removal Markets

What the TD Bank and Climeworks Deal Signals About Long-Term CDR Demand

The TD Bank and Climeworks agreement is a clear sign that carbon removal is moving from one-off purchases to long-term procurement. A 10-year contract tells the market that buyers now want durable carbon dioxide removal as a planned supply commitment, not just an ESG gesture.

The structure matters as much as the buyer. TD is backing a managed North American portfolio that combines enhanced rock weathering, biochar, BECCS, and future DAC supply. That kind of multi-pathway buying reduces delivery risk because the buyer is not relying on a single project or a single technology.

The deal also fits the logic of residual emissions. Climeworks is framing the contract around long-duration storage and the need to neutralize emissions that remain after deep decarbonization. That is consistent with the SBTi principle that permanent removal is needed for residual emissions.

Banks are starting to treat carbon removal like a risk-managed procurement category. They are looking at due diligence, delivery certainty, supplier management, and contract duration in the same way they would assess other long-term sourcing decisions.

That shift raises the bigger question. If banks are buying for strategic resilience and climate planning, what internal procurement logic is pushing financial institutions toward this market?

Why Financial Institutions Are Treating Carbon Removal as a Strategic Procurement Category

Financial institutions need high-integrity carbon removal because net-zero pathways leave residual emissions behind. The SBTi framework points toward permanent removal for those residual emissions, and its approach is still being refined to formalize how companies deal with ongoing emissions.

For banks, carbon removal is becoming a sourcing category with real procurement logic. Buyers care about supplier solvency, MRV quality, storage durability, delivery windows, and whether the contract term matches their climate targets.

There is also a clear institutional precedent. Long-term DAC agreements and earlier financial-sector commitments helped normalize permanent removals for treasury, sustainability, and procurement teams. That matters because early buyers shape how the category is understood inside large organizations.

Portfolio construction is now part of the commercial case. Managed removal portfolios let buyers balance timing, quality, and budget constraints across multiple pathways. For financial institutions, that makes fulfillment more predictable across multi-year climate programs.

The market data points in the same direction. Durable CDR contracting surged in 2025, and Q2 alone reached 15.48 million tonnes contracted across methods. That is a strong sign that institutional buyers are moving beyond pilots.

This leads naturally to aviation. Banks buy for balance-sheet credibility and long-term planning, while airlines buy because their operational emissions are hard to abate and future removal supply is becoming strategically important.

How Aviation Partnerships Like Deep Sky and Lufthansa Fit Into the Next Phase of CDR Buying

Aviation is a natural anchor segment for carbon removal procurement. DAC and other permanent removals are relevant to hard-to-abate sectors such as aviation, shipping, and heavy industry, where deep operational cuts are difficult and residual emissions are likely to remain.

Lufthansa Group already separates avoidance from removal in its climate-protection portfolio. Its materials also describe technology-based removals such as direct air capture and long-term geological storage, which shows that airline buyers are becoming more precise about permanence and credit quality.

Deep Sky’s Alberta hub adds another layer to this story. It is designed as a cross-technology carbon removal commercialization center, which matters to buyers that want access to future supply rather than only spot purchases from single projects.

The Deep Sky and ENGIE partnership shows how this market is developing. The structure combines procurement of up to 15,000 credits with market development, which helps de-risk scaling while giving buyers a path to future DAC capacity.

For buyers, the key aviation question is not just what credits are bought. It is how airline demand affects bankability, cluster development, and pre-commitment economics for new CDR hubs.

What Makes 10-Year Offtake Contracts Different from Short-Term Carbon Credit Purchases

A 10-year carbon removal offtake agreement is very different from a spot purchase. It gives developers bankable demand visibility and helps support project finance for assets that need large upfront capital and long payback periods.

Long-term offtakes also carry more complex terms. Delivery schedules, substitution rights, MRV provisions, storage durability requirements, portfolio rebalancing, and remedies for under-delivery all become part of the deal.

That complexity reflects the current state of durable CDR supply. DAC still represents a relatively small share of contracted durable CDR, and a few suppliers account for most contracted DAC tonnes. Concentration like that makes long-term contracting more important.

Pricing also changes with tenor. The market is still working through a buyer-supplier gap, and some pathways remain materially above $100 per tonne because of capital intensity, energy needs, MRV, and delivery risk.

For buyers, the value is not only carbon accounting. It is supply assurance, price visibility, and protection against scarcity and missed retirement timelines.

That raises the next issue. If more buyers sign 10-year offtakes, what happens to DAC supply curves, pricing power, and project finance across the market?

The Market Implications for DAC Supply, Pricing, and Project Finance

More anchor-buyer offtakes should improve DAC project financeability. Developers can point to contracted demand, which helps support lender confidence and investment in energy systems, storage access, and MRV infrastructure.

Supply concentration means large buyers can shape where new capacity gets built. They can also influence which technologies reach early commercialization first. That is one reason portfolio contracts are becoming more attractive.

Pricing is still on a learning curve. Historical voluntary-market averages and projected levelized costs are far apart, which shows that today’s prices still reflect first-of-a-kind premiums rather than mature-market economics.

The market is already showing that large buyers can move volume. Q2 2025 saw 15.48 million tonnes contracted, and Microsoft accounted for most of that quarter’s volume. That kind of buying helps set the marginal market price.

For developers, the financing lesson is straightforward. Long-term offtake improves revenue certainty, but it also raises the bar for performance-backed delivery, strong counterparty terms, and diversified project pipelines.

The strategic question now is broader. If North American and European anchor buyers keep scaling, how far can their procurement behavior reshape global CDR markets, supplier geography, and cross-border demand?

Why This Buyer Shift Could Reshape Global Carbon Removal Markets Beyond North America and Europe

The anchor-buyer model could accelerate global carbon removal market formation. Large bank and airline offtakes create reference prices, bankable demand signals, and supplier credibility that can travel across jurisdictions.

As procurement norms mature, suppliers in other regions can plug into the same playbook through cross-border DAC supply chains, project development partnerships, and registry-backed MRV systems. That makes the market easier to scale across borders.

The supply side is already becoming more global. Commercialization hubs that aggregate multiple capture pathways can package internationally marketable tonnes, which helps buyers diversify supply and reduce concentration risk.

Other buyers are likely to follow once standardized offtake structures, third-party verification, and supplier diversification are easier to access. That matters especially for multinational corporates with operations and investors across regions.

The bigger conclusion is simple. Banks and airlines are not just buying credits. They are helping define the commercial architecture of durable carbon removal, from procurement norms to project finance and from regional pilots to global market scale.