Carbon dioxide removal is no longer only a voluntary market topic. Around the world, governments are beginning to shape how removals are funded, certified, counted, and integrated into climate policy. The policy landscape is still uneven: some jurisdictions are creating tools for engineered removals such as direct air capture and BECCS, while others have more mature systems around forests, land use, soil carbon, and other land-sector removals.
A useful way to understand today’s CDR policy landscape is to divide it into four groups: public funding and revenue support, public procurement and demand creation, certification and crediting systems, and compliance accounting frameworks. The landscape is vast and diverse, here are the groups with some of the leading examples to such policies.
1. Public funding for engineered CDR
Public funding instruments help early-stage CDR technologies move through pilot, demonstration, and early deployment phases. Their purpose is to share technology risk and first-of-a-kind project risk that private capital may not be ready to take alone. This is especially important for capital-intensive pathways such as direct air capture, BECCS, and mineralization-based approaches.
The most visible engineered CDR policy support today is in the United States. The U.S. Department of Energy’s Regional Direct Air Capture Hubs program is designed to support commercial-scale DAC deployment, with $3.5 billion allocated through the Bipartisan Infrastructure Law, leading to the first major commercial-scale hub selections in late 2023 and ongoing deployment. Each hub is expected to have the potential to capture at least 1 million tonnes of CO₂ per year, with captured CO₂ either permanently stored or used in a way that prevents release. This is one of the clearest public funding examples for engineered CDR.
The United States also created the Carbon Dioxide Removal Purchase Pilot Prize in 2023, a $35 million public procurement-style program. It allows the Department of Energy to purchase CDR credits directly from suppliers, covering pathways such as DAC, biomass-based removals, enhanced weathering, mineralization, and managed sinks. The program includes scientific verification, MRV expectations, and commercial offtake requirements. This matters because it moves public policy beyond grants and into early demand creation.
Tax incentives also matter. The U.S. 45Q tax credit is not a pure CDR policy, because it also supports broader carbon capture and storage from point sources. However, it can support eligible DAC and storage projects, making it relevant for the CDR policy landscape when atmospheric removals are involved.
Canada supports carbon management through industrial incentive mechanisms. Its CCUS investment tax credit is not a pure CDR policy, because it also supports broader carbon capture and storage activities, but it is relevant for CDR where direct air capture is included. Reuters reported in April 2026 that Canada expanded carbon capture tax incentives, including a 30% investment tax credit for direct air capture equipment. In parallel, Canada’s emerging CDR ecosystem is gaining private-sector traction: Reuters reported in June 2026 that Canadian company Deep Sky delivered North America’s first verified direct air capture credits, with credits delivered to Microsoft and RBC, and additional deals with TD Bank, Lufthansa, and Engie.
Denmark also provides a clear example of targeted public funding for engineered and biogenic removals. The Danish Energy Agency established the Negative Emissions Carbon Capture and Storage (NECCS) fund to provide direct financial backing for early deployment phases. This program has funded major initiatives including Ørsted’s bioenergy carbon capture and storage (BECCS) project, directly reducing technology and capital risks for large-scale facilities.
2. Public procurement and reverse auctions
Public procurement and reverse auctions turn the state into an early buyer and market maker, not only a regulator or funder. Through these tools, governments create long-term demand for carbon removal services that meet defined quality, durability, and storage conditions. This matters because high-cost durable CDR projects often need revenue certainty before they can attract large-scale private finance.
Sweden provides one of the strongest public procurement-like examples for durable CDR. In 2024, the European Commission approved Sweden’s approximately €3 billion support scheme for BECCS projects. The program supports projects that capture and permanently store biogenic CO₂ from biomass-based facilities. It is structured through competitive bidding, and selected projects may receive support through 15-year contracts. Eligible projects are expected to capture and store at least 50,000 tonnes of biogenic CO₂ per year. This is important because the state is effectively creating long-term demand for a negative emissions service.
Denmark utilizes a similar reverse-auction model to turn state purchasing power into long-term demand creation. Through its NECCS Fund, the Danish Energy Agency conducts competitive bidding rounds where project developers compete to offer permanent carbon removal services at the lowest cost per tonne. The government then awards multi-year service contracts to the selected suppliers, ensuring the revenue certainty needed to attract private finance for biogenic carbon storage.
Canada is also becoming an important CDR policy example because it combines public procurement, industrial incentives, and early private-sector demand. In October 2024, the Government of Canada committed to purchase at least C$10 million in carbon dioxide removal services by 2030 through the Low-Carbon Fuel Procurement Program, which was expanded to include CDR services in addition to low-carbon fuels. The government defines CDR as human activities that remove CO₂ from the atmosphere, including examples such as direct air capture and enhanced carbon mineralization, and durably store it in reservoirs or products. This makes Canada one of the clearer examples of a government using public procurement to support early demand for CDR.
Together, these public procurement programs and reverse auctions in Sweden, Denmark, and Canada show an important shift: governments are beginning to act not only as regulators or funders, but also as early market makers.
3. Certification and crediting systems
Certification and crediting systems define how a carbon removal activity is measured, verified, credited, and tracked. From a policy perspective, they turn removals into governable units by setting common rules for methodologies, monitoring, additionality, storage, and claims. This makes them important for public policy because governments need credible certification infrastructure before removals can be connected to procurement programs, compliance markets, national accounting systems, or international mechanisms such as Article 6.
Article 6.4 / Paris Agreement Crediting Mechanism
Article 6.4 of the Paris Agreement establishes an international crediting mechanism under the United Nations. The UNFCCC describes the Paris Agreement Crediting Mechanism as a system for registering mitigation activities, verifying outcomes, and issuing Article 6.4 emission reductions. For CDR, the adoption of Article 6.4 methodology and removal standards at COP29 is important because it creates a clearer UN-level framework for how removals may be credited internationally.
European Union Carbon Removals and Carbon Farming Certification Framework
The European Union’s CRCF (Carbon Removals and Carbon Farming Certification Framework) establishes an EU-wide certification framework for durable carbon removals, carbon farming, and carbon storage in products. Regulation (EU) 2024/3012 was adopted on 27 November 2024 and creates the legal basis for certifying different types of carbon removal and carbon storage activities. The European Commission states that the framework aims to support the scale-up of carbon removals and carbon farming across Europe. For CDR, this is important because it gives Europe a legal foundation for recognizing removals based on defined quality, quantification, monitoring, and certification rules.
Beyond international frameworks, individual countries are also operating mature, country-level certification systems. While engineered CDR policy is still concentrated in a few countries, land-sector removal policy is more mature and more widely institutionalized.
The United Kingdom’s Woodland Carbon Code is one of the clearest examples. Launched in 2011, it provides a voluntary standard for woodland creation projects in the UK. Projects must be registered, validated, independently verified, and aligned with the UK Forestry Standard. The code is focused on new woodland creation and uses the UK Land Carbon Registry to issue and track units.
France’s Label Bas-Carbone was created by Decree No. 2018-1043 of 28 November 2018. The decree states that the label can be granted to projects that reduce or sequester anthropogenic greenhouse gas emissions on French territory, and that verified quantities may be designated as “crédits carbone.” Projects must follow an approved method, demonstrate additionality against a reference scenario, and undergo verification by a competent independent body.
Australia’s Australian Carbon Credit Unit Scheme is another mature example. The Clean Energy Regulator explains that the ACCU Scheme supports projects that reduce emissions or store carbon, including changes in vegetation management. Participants can earn one ACCU for every tonne of CO₂-e stored or avoided, and eligible activities include reforestation, revegetation, restoring blue carbon ecosystems, restoring rangelands, improving soil carbon, and protecting native forest or vegetation at risk of clearing.
New Zealand’s Emissions Trading Scheme also has an important forestry component. Forestry participants can earn New Zealand Units for eligible forest removals, making forestry and afforestation part of the country’s emissions trading architecture. Reuters reported in 2024 that the forestry component included more than 560,000 hectares and over 4,000 owners.
Denmark’s recent Green Tripartite Agreement introduces a comprehensive framework for managing agricultural emissions and land-sector carbon removal. A central component of this strategy is a dedicated policy initiative to scale biochar production through pyrolysis. By combining agricultural regulation with clear deployment rules for biochar, the Danish model outlines how national frameworks can establish clear verification pathways for soil-based carbon storage.
4. Compliance accounting frameworks
Compliance-market and credit integration tools allow certain carbon credits to be used within regulated carbon market systems. These systems are usually not designed only for CDR, but they become relevant when removal-based credits, such as forest carbon or other eligible removal units, can be used within a compliance structure. Their importance comes from creating regulated demand channels beyond the voluntary carbon market.
- Compliance-market offset protocols
Some subnational compliance markets also include land-based removal protocols. California’s Cap-and-Trade Compliance Offset Program includes U.S. Forest Projects and Urban Forest Projects among its approved protocols. These are not CDR-specific systems, because the compliance offset program includes other project types as well, but they are relevant where forest carbon removals are credited and used within a regulated carbon market.
Washington State’s Cap-and-Invest program under the Climate Commitment Act also includes offset protocols such as U.S. Forest and Urban Forest protocols. The program limits offset use and links offsets to the broader cap-and-invest compliance structure. Blue carbon is being explored, but based on current evidence it should not yet be treated as an active, fully operational CDR policy instrument.
Japan’s GX-ETS, Green Transformation Emissions Trading System, is part of the country’s broader Green Transformation policy package. It aims to support industrial transition and create a more structured carbon market architecture through corporate emissions targets and credit use. From a CDR perspective, Japan is worth watching because the J-Credit system includes forestry and carbon sink-related credits, but the exact treatment of different removal types under the GX-ETS should be described carefully. A safe framing is that Japan is linking credit use with an emissions trading architecture, while the specific scope, eligible CDR pathways, and use conditions need to be clearly distinguished.
- Mandatory accounting frameworks
At the regional level, the European Union’s LULUCF Regulation is a key example of mandatory land-sector accounting. The regulation covers emissions and removals from land use, land-use change, and forestry. Its 2023 revision sets an EU-wide 2030 net removal target of 310 MtCO₂e for the LULUCF sector. This is not a project-level CDR crediting system, but it is an important policy framework because it makes land-sector removals part of binding climate accounting.
Conclusion: policy is emerging, but uneven
The current CDR policy landscape is still fragmented. Engineered CDR policy is strongest in a few places, such as Denmark, Canada, UK, Japan, United States and Sweden. Land-sector removals are more widely covered through certification systems, forestry codes, emissions trading schemes, and compliance offset protocols. Public procurement is still rare, but examples show that governments are beginning to create demand directly.
The biggest gaps remain in enhanced weathering, ocean CDR, and blue carbon. These pathways may be scientifically important, but active, clearly documented public policy instruments are still limited. This means CDR policy is moving, but not evenly. The next stage will likely be about connecting funding, standards, procurement, and compliance markets such as ETS mechanisms into a more coherent system that can support both durable engineered removals and high-integrity land-sector removals. Evolving international policies and mechanisms play a crucial role as we see the accelerating impact recently.
