Capital Formation and Risk Sharing
Make projects bankable.
30 levers in this family
There is a graveyard between a working pilot and a bankable project, and the industry has a name for it: the valley of death. It is not a technology problem. It is a spreadsheet problem. A first-of-a-kind removal plant carries construction risk, technology risk, policy risk and, above all, revenue risk, and private capital prices all four at once. The result is a cost of capital that can kill a project more surely than any engineering failure. The renewables build-out taught us the cure: use public balance sheets not to replace private money but to reshape its risk, and private money arrives in multiples.
That is what this category does.
- Revenue-risk contracts guarantee the money coming out: advance market commitments, contracts for difference, government procurement and offtake guarantees turn a hoped-for market into a signed counterparty, which is the only kind a lender believes.
- Funding and fiscal support cuts the money going in: grants, concessional loans, guarantees and tax credits shrink the capital mountain a project must climb before its first tonne.
- Investment vehicles organise the money itself: public and blended funds, and in some cases the state building and operating capacity directly, where the market will not go at all.
- Philanthropic and catalytic capital takes the risks no other money can: donation-funded purchases and first-loss positions that buy the track record commercial capital waits for.
The discipline that matters here is exit, not entry. Every instrument in this family should be designed to make itself unnecessary: support that tapers as costs fall, auctions that discover prices rather than protect them, and public risk-taking that crowds private capital in rather than letting it wait outside.
Sub-family (Select One)
Governance Level (Select One)
REVENUE-RISK CONTRACTS
10 levers
Advance market commitments
A binding promise to buy a set volume of removals at an agreed price once suppliers deliver.
Cost
Low to Very high
Complexity
Medium to High
Timeline
Very short to Medium
Integrity, Transparency & MRV
2–4Innovation & Cost Reduction
2–5Social & Environmental Safeguards
1–3Energy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
3–5Bankability and Cost of Capital
3–5Policy Architecture & Coordination
1–3
Carbon contracts for difference (CCfDs)
A guaranteed price per verified tonne that tops up revenue when the market price falls short.
Cost
Low to Very high
Complexity
High
Timeline
Short to Medium
Integrity, Transparency & MRV
2–3Innovation & Cost Reduction
2–4Social & Environmental Safeguards
1–3Energy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
2–4Bankability and Cost of Capital
4–5Policy Architecture & Coordination
2–4
Publicly Supported Currency Hedging
Public backing enabling a specialist provider to offer currency hedges CDR developers can't get commercially.
Cost
Low to Medium
Complexity
Low to High
Timeline
Very short to Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
N/ASocial & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
1–2Bankability and Cost of Capital
3–4Policy Architecture & Coordination
1–2
Public Procurement of CDR
Direct government purchase of verified removals, with units owned or retired by the public buyer.
Cost
Low to Very High
Complexity
Low to Medium
Timeline
Short to Medium
Integrity, Transparency & MRV
2–4Innovation & Cost Reduction
3–5Social & Environmental Safeguards
1–3Energy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
3–5Bankability and Cost of Capital
3–5Policy Architecture & Coordination
2–3
Government-Backed Offtake Guarantees
A public backstop that pays suppliers if a private buyer fails to honour its removal purchase contract.
Cost
Very low to High
Complexity
Medium to High
Timeline
Very short to Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
N/ASocial & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
1–2Bankability and Cost of Capital
4–5Policy Architecture & Coordination
2–3
Intermediated Purchase-and-Resale Auctions
An intermediary buying removals on long-term contracts and reselling them through shorter-term auctions.
Cost
Medium to High
Complexity
Medium to High
Timeline
Short to Medium
Integrity, Transparency & MRV
1–2Innovation & Cost Reduction
2–3Social & Environmental Safeguards
1–2Energy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
3–4Bankability and Cost of Capital
3–4Policy Architecture & Coordination
2–3
Staged Innovation Procurement
Public purchasing that funds CDR technology through successive development stages before commercial readiness.
Cost
Low to Medium
Complexity
Medium
Timeline
Medium
Integrity, Transparency & MRV
1–3Innovation & Cost Reduction
4–5Social & Environmental Safeguards
1–3Energy, Transport & Storage Infrastructure
N/AInputs & Capacity
1–3Demand Formation
1–2Bankability and Cost of Capital
2–3Policy Architecture & Coordination
2–3
Statutory Contract Counterparties
A dedicated public body created to sign and honour long-term removal contracts credibly.
Cost
Low to Medium
Complexity
Medium to High
Timeline
Short to Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
N/ASocial & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
2–3Bankability and Cost of Capital
4–5Policy Architecture & Coordination
3–4
Capacity and Availability Payments
Payments that keep removal capacity ready and available, whether or not it is actively producing.
Cost
Very low to Very high
Complexity
Medium to High
Timeline
Very short to Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
N/ASocial & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
3–5Inputs & Capacity
3–5Demand Formation
N/ABankability and Cost of Capital
3–5Policy Architecture & Coordination
3–5
Standardised CDR Contracts and Model Clauses
Reusable standard-form contracts for purchasing carbon removal.
Cost
Very low to Low
Complexity
Low to Medium
Timeline
Very short to Medium
Integrity, Transparency & MRV
1–3Innovation & Cost Reduction
N/ASocial & Environmental Safeguards
1–2Energy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
1–2Bankability and Cost of Capital
1–3Policy Architecture & Coordination
1–2FUNDING AND FISCAL SUPPORT
12 levers
Grants
Non-repayable public funding for removal work too early or uncertain for commercial finance.
Cost
Very low to Very high
Complexity
Low to High
Timeline
Very short to Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
3–5Social & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
N/AInputs & Capacity
1–3Demand Formation
1–2Bankability and Cost of Capital
2–4Policy Architecture & Coordination
N/A
Concessional Loans
Below-market loans that ease financing for removal projects.
Cost
Low to High
Complexity
Low to Medium
Timeline
Short to Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
2–3Social & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
1–3Inputs & Capacity
1–3Demand Formation
N/ABankability and Cost of Capital
4–5Policy Architecture & Coordination
N/A
Loan guarantees
A public promise to cover part of a bank loan if a removal project borrower defaults.
Cost
Very low to High
Complexity
Low to High
Timeline
Short to Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
N/ASocial & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
1–3Inputs & Capacity
N/ADemand Formation
N/ABankability and Cost of Capital
4–5Policy Architecture & Coordination
N/A
Venture Debt for CDR Companies
Lending to CDR companies that have raised equity but can't yet obtain conventional business loans.
Cost
Low to High
Complexity
Low to Medium
Timeline
Very short to Short
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
1–3Social & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
N/AInputs & Capacity
1–3Demand Formation
N/ABankability and Cost of Capital
2–4Policy Architecture & Coordination
N/A
Tax credits and reductions
Tax relief that rewards investment in, production of, or purchase of carbon removal.
Cost
Low to Very high
Complexity
Low to High
Timeline
Short to Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
2–4Social & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
1–5Bankability and Cost of Capital
3–5Policy Architecture & Coordination
2
Reverse Tax Credit (outcome-based, per-tonne payout)
A fixed per-tonne payment to any verified supplier, functioning as the mirror image of a carbon tax.
Cost
Medium to Very High
Complexity
Medium to High
Timeline
Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
2–4Social & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
3–5Bankability and Cost of Capital
3–5Policy Architecture & Coordination
2
Feed-in tariffs / per-tonne subsidy
A guaranteed multi-year price per tonne removed, adapted from renewable-electricity feed-in tariffs.
Cost
Low to Very high
Complexity
Low to High
Timeline
Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
2–4Social & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
N/AInputs & Capacity
N/ADemand Formation
3–5Bankability and Cost of Capital
3–5Policy Architecture & Coordination
2–3
Land-Based Carbon Removal Payment Schemes
Payments to farmers and land managers for practices that increase carbon stored in soils and vegetation.
Cost
Low to Very high
Complexity
Medium to High
Timeline
Short to Medium
Integrity, Transparency & MRV
2–4Innovation & Cost Reduction
1–2Social & Environmental Safeguards
2–4Energy, Transport & Storage Infrastructure
N/AInputs & Capacity
2–4Demand Formation
2–4Bankability and Cost of Capital
2–4Policy Architecture & Coordination
2–4
Accelerated Depreciation and Capital Allowances
Faster tax depreciation that lets removal businesses deduct equipment costs sooner.
Cost
Low to High
Complexity
Medium
Timeline
Short
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
1–2Social & Environmental Safeguards
N/AEnergy, Transport & Storage Infrastructure
1–2Inputs & Capacity
N/ADemand Formation
N/ABankability and Cost of Capital
2–3Policy Architecture & Coordination
N/A
Export Finance and Insurance for CDR Equipment and Services
Export credit and insurance that helps domestic CDR equipment and service providers sell abroad.
Cost
Low to Very high
Complexity
Medium to High
Timeline
Short to Medium
Integrity, Transparency & MRV
1–2Innovation & Cost Reduction
1–2Social & Environmental Safeguards
2–3Energy, Transport & Storage Infrastructure
1–3Inputs & Capacity
2–3Demand Formation
N/ABankability and Cost of Capital
3–4Policy Architecture & Coordination
2–3
CDR-Linked Intergovernmental Fiscal Transfers
Revenue-sharing between government levels tied to verified removal outcomes.
Cost
Low to Very high
Complexity
Low to High
Timeline
Short to Medium
Integrity, Transparency & MRV
1–2Innovation & Cost Reduction
N/ASocial & Environmental Safeguards
2–3Energy, Transport & Storage Infrastructure
N/AInputs & Capacity
1–2Demand Formation
N/ABankability and Cost of Capital
1–2Policy Architecture & Coordination
2–3
Contingent Repayable Advances
Upfront funding repayable only if the supported removal work reaches a defined commercial milestone.
Cost
Low to High
Complexity
Medium
Timeline
Very short to Medium
Integrity, Transparency & MRV
1–2Innovation & Cost Reduction
3–4Social & Environmental Safeguards
1–2Energy, Transport & Storage Infrastructure
1–2Inputs & Capacity
1–2Demand Formation
N/ABankability and Cost of Capital
3–4Policy Architecture & Coordination
N/AINVESTMENT VEHICLES
6 levers
Public or Blended CDR Investment Fund
A fund that pools public or philanthropic capital with private money to invest across removal projects.
Cost
Medium to Very high
Complexity
Medium to High
Timeline
Short to Medium
Integrity, Transparency & MRV
1–3Innovation & Cost Reduction
2–4Social & Environmental Safeguards
1–3Energy, Transport & Storage Infrastructure
1–3Inputs & Capacity
1–3Demand Formation
N/ABankability and Cost of Capital
3–4Policy Architecture & Coordination
2–3
Public Development, Ownership and Operation of CDR
Direct government development, ownership or operation of removal facilities where the market won't build them.
Cost
Low to Very high
Complexity
Medium to High
Timeline
Short to Medium
Integrity, Transparency & MRV
1–3Innovation & Cost Reduction
2–4Social & Environmental Safeguards
1–3Energy, Transport & Storage Infrastructure
2–4Inputs & Capacity
2–3Demand Formation
N/ABankability and Cost of Capital
3–4Policy Architecture & Coordination
2–3
Public Investment in Shared CDR Infrastructure
Public capital for shared assets — pipelines, ships, storage hubs — that multiple removal projects depend on.
Cost
Medium to Very high
Complexity
Medium to Very high
Timeline
Short to Medium
Integrity, Transparency & MRV
1–3Innovation & Cost Reduction
2–4Social & Environmental Safeguards
1–3Energy, Transport & Storage Infrastructure
4–5Inputs & Capacity
1–3Demand Formation
N/ABankability and Cost of Capital
3–4Policy Architecture & Coordination
3–4
Co-operative and Community Ownership Frameworks
Legal structures letting residents, workers or Indigenous groups hold genuine ownership stakes in removal projects.
Cost
Very low to Medium
Complexity
Low to High
Timeline
Short to Medium
Integrity, Transparency & MRV
N/AInnovation & Cost Reduction
N/ASocial & Environmental Safeguards
2–4Energy, Transport & Storage Infrastructure
N/AInputs & Capacity
1–2Demand Formation
N/ABankability and Cost of Capital
1–3Policy Architecture & Coordination
2–3
Dedicated CDR Funding within International Climate and Development Funds
A reserved share of multilateral climate-fund capital set aside specifically for removals.
Cost
Medium to Very high
Complexity
High
Timeline
Short to Medium
Integrity, Transparency & MRV
2–3Innovation & Cost Reduction
2–4Social & Environmental Safeguards
2–4Energy, Transport & Storage Infrastructure
1–3Inputs & Capacity
2–4Demand Formation
N/ABankability and Cost of Capital
3–4Policy Architecture & Coordination
3–4
Debt-for-Removal Swaps
Sovereign debt relief that redirects the resulting savings into a protected national removal programme.
Cost
Low to High
Complexity
High
Timeline
Short to Medium
Integrity, Transparency & MRV
1–3Innovation & Cost Reduction
1–3Social & Environmental Safeguards
1–3Energy, Transport & Storage Infrastructure
1–2Inputs & Capacity
1–3Demand Formation
1–3Bankability and Cost of Capital
1–3Policy Architecture & Coordination
2–4PHILANTHROPIC AND CATALYTIC CAPITAL
2 levers
Philanthropic Purchase Vehicles
A charitable fund that pools donations to buy and retire verified removals.
Cost
Very low to Medium
Complexity
Low to Medium
Timeline
Very short to Short
Integrity, Transparency & MRV
1–3Innovation & Cost Reduction
2–3Social & Environmental Safeguards
1–3Energy, Transport & Storage Infrastructure
N/AInputs & Capacity
1–2Demand Formation
2–3Bankability and Cost of Capital
1–3Policy Architecture & Coordination
N/A
Charitable Mission Investments
Foundation capital lent or invested on mission-first terms to advance removal projects, beyond ordinary grants.
Cost
Very low to Medium
Complexity
Low to Medium
Timeline
Very short to Short
Integrity, Transparency & MRV
1–2Innovation & Cost Reduction
2–3Social & Environmental Safeguards
1–3Energy, Transport & Storage Infrastructure
1–2Inputs & Capacity
1–2Demand Formation
N/ABankability and Cost of Capital
2–3Policy Architecture & Coordination
N/A©2026 Alexander Mäkelä and Carbon Gap.
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Headline and barrier scores based on Carbon Gap analysis.