Why carbon removal investment is a strategic priority

Corporate sustainability has entered a more challenging era. Where sustainability used to be about bold targets and high-level goals, 2026 is shaping up to be a year focused on practical results, risk management and integration with core business priorities. Many companies are already adjusting how they talk about sustainability. As Solitaire Townsend recently noted, the conversation is shifting away from idealistic narratives and towards language rooted in resilience, risk, and long-term value.

Instead of positioning carbon removal as a discretionary climate project, it seems more and more sustainability teams are reframing it as a core element of risk management and future-proofing. For many of us, this shift can feel counterproductive as it moves the conversation away from climate ambition and towards business risk. But the action itself remains just as meaningful — and that is an important point to hold on to.

There is also a clear upside. This framing makes it easier for finance and leadership teams to see carbon removal as a long-term business priority, rather than a peripheral cost. In doing so, it helps sustainability teams make a stronger, more credible investment case.

In this environment, carbon removal is not just another climate initiative. It is a strategic tool that connects sustainability goals with business reality.

What makes carbon removal budgeting challenging

Even when the strategic case is clear, securing budget for carbon removal is still often difficult. Sustainability teams face real, practical barriers when they bring CDR proposals to finance and leadership teams.

• Volatile carbon credit pricing: Carbon credit prices can change significantly over time, making long-term budget forecasting difficult. Many markets operate on spot prices, meaning prices available today may not reflect future costs.
• Difficulty quantifying climate ROI: Carbon removal does not generate a traditional financial return. Its value shows up in reduced risk, stronger credibility, and future readiness, which are harder to translate into standard return on investment (ROI) metrics.
• Competing internal budget priorities: Sustainability teams are often competing with growth, technology, and operational projects for limited funds. Carbon removal can feel abstract to teams focused on short-term financial performance.
• Knowledge gaps among decision-makers: Many executives still do not clearly distinguish between emissions reductions, offsets, and removals. Without this understanding, it is difficult to justify why quality and durability matter, or why carbon removal commands a higher price.

How to build a compelling investment case for carbon removal

This is where framing really matters. A strong internal investment case for carbon removal is less about climate ideals and more about business relevance. As with any communication, the starting point is the audience in front of you and what resonates with them.

1. Frame carbon removal as risk mitigation

Position carbon removal as a way to manage risk. This includes regulatory risk, reputational risk, and long-term financial exposure. Investing in high-quality CDR reduces the chance of future compliance costs, public criticism, or being locked into low-quality solutions that do not stand up to scrutiny. Addressing the fear of greenwashing also matters significantly to leadership. Sharpening data and having transparent progresses around investments are means to avoid greenwashing.

2. Quantify the cost of inaction

Doing nothing also has a cost. Volatile carbon prices, stricter regulations, and loss of stakeholder trust can all carry financial consequences. Comparing the cost of carbon removal today with potential future penalties or lost opportunities helps shift the conversation.

3. Connect investment to regulatory readiness

Disclosure frameworks and climate reporting requirements are evolving quickly and we’ve seen lots of updates in just recent monts to standards like SBTi and CSRD. Early investment in carbon removal helps organisations build systems, data, and processes that will be needed as expectations tighten. This reduces last-minute compliance risk.

4. Benchmark against industry peers

Showing what peers or industry leaders are doing creates urgency. Carbon removal is increasingly part of credible climate strategies across sectors. Falling behind peers can carry reputational and commercial risks.

5. Translate climate impact into business language

Internal conversations land better when they focus on risk exposure, brand value, and stakeholder confidence rather than tonnes of CO₂ alone. Climate outcomes matter, but business language helps decision-makers connect the dots.

Climate language vs business language

Climate language: “We need to neutralise residual emissions.”

Business language: “We need to reduce long-term regulatory and reputational risk.”

Climate language: “This project removes carbon permanently."

Business language: “This investment reduces exposure to future climate liabilities.”

Budget strategies that work for carbon removal procurement

Once approval is secured, the next challenge is structuring the budget in a way that works over time.

Scenario-based budget planning

This approach models different future scenarios, such as low, medium, and high carbon price pathways. It helps teams prepare for volatility and shows leadership that uncertainty has been considered, not ignored.

Multi-year commitment structures

Multi-year agreements can provide price stability and supply certainty. They also demonstrate long-term commitment, which strengthens credibility with stakeholders and project developers alike.

At Klimate, lots of our customers take this approach that shows a commitment to combat climate change but also shows strategic business thinking. One example is Jubel, a UK-based beer brand, that wanted to secure preferential pricing among other goals. A three-year carbon removal strategy gave them that exact solution.

Timing procurement right with the help of a partner

Early commitments can secure better pricing and access to supply, while waiting can preserve flexibility. Each approach has trade-offs. The right balance depends on risk tolerance, budget cycles, and climate targets. Another pathway is to join forces with a partner that takes care of procurement for you and has negotiated the best prices on your behalf.

Why a portfolio approach strengthens your investment case

A portfolio approach means investing across multiple carbon removal methods rather than relying on a single solution. This mirrors how financial portfolios manage risk.

Balancing cost and permanence

Some methods, such as nature-based solutions, tend to be lower cost but store carbon for shorter periods. Engineered solutions are typically more expensive but offer longer-lasting storage. A mix allows teams to balance affordability and durability.

Spreading risk across removal methods

Relying on one method increases exposure if that approach underperforms or faces supply constraints. Diversification reduces this risk and aligns with emerging best practice.

Aligning solutions with corporate values

Different removal methods come with different co-benefits. Some support biodiversity and local livelihoods, while others showcase technological innovation. A portfolio can reflect what matters most to your organisation and stakeholders.

How to ensure quality in carbon removal investments

Quality is central to any credible investment case. Without it, carbon removal risks becoming a cost without value.

• Permanence and durability: Permanence refers to how long removed carbon stays stored. Longer storage periods reduce the risk that carbon returns to the atmosphere and strengthen climate claims.
• Additionality and real impact: Additionality asks whether the removal would have happened without your investment. High-quality projects depend on carbon finance to exist and deliver real impact.
• Transparent monitoring and verification: Robust Monitoring, Reporting, and Verification (MRV) systems and independent verification build confidence in reported outcomes.
• Co-benefits beyond carbon: Environmental and social co-benefits, such as biodiversity gains or community income, add value and strengthen internal and external support.

Making carbon removal part of how the business operates

Securing budget once is hard. Securing it year after year is harder. The teams that manage it tend to focus less on perfect arguments and more on trust, consistency, and internal relationships. They take time to build executive support, not by overwhelming leaders with detail, but by helping them understand why carbon removal matters in the first place. They report progress clearly and regularly, using simple signals that link back to business priorities rather than treating carbon removal as a standalone climate initiative.

Over time, carbon removal stops being a special request and starts showing up in planning cycles, targets, and internal KPIs. In my experience, that shift is often what turns one-off approvals into something more durable.

Having the right partners can also make a difference. When procurement, reporting, and quality assurance are handled transparently, it reduces internal friction and gives finance and leadership teams confidence that the investment is well managed.

Turning commitment into something the business recognises as value

A strong investment case for carbon removal is less about making the perfect climate argument and more about showing how the decision holds up in the real world. It combines clear thinking on risk, confidence in quality, and a practical approach to budgeting that acknowledges uncertainty rather than ignoring it. It also recognises the wider context companies are operating in — changing regulation, tighter scrutiny, and an increasingly complex global environment. Climate action does not sit outside these pressures. It is shaped by them.

If we strip it back, the question of how sustainability teams can ensure budgets for carbon removal and how to make the investment case in-house often comes down to one thing: learning when to speak the language of climate ambition, and when to speak the language of the business.

In this episode of What Goes Up Must Come Down, Simon is joined by Marian Krüger, founder of Remove, a nonprofit supporting carbon removal startups worldwide. Together, they explore the motivations behind why companies buy carbon removal credits and how compliance will shape the sector’s future.

TL;DR

• Companies are increasingly buying carbon removal credits as part of their sustainability goals and long-term strategies.
• The carbon removal market is still maturing, with demand not yet meeting expectations, but the gap is shrinking.
• Compliance frameworks like the EU ETS are seen as key drivers for future market stability, but introducing them too soon could limit innovation.
• Companies are exploring both portfolio-based strategies and single-project investments, each with its own risks and benefits.
• Innovation and compliance must work together to ensure emerging technologies can scale without being stifled by price-driven markets.

Writing the book “Race to Zero”

Marian Krüger and co-author Benedict Probst from the Max Planck Institute wrote Race to Zero to fill a gap in the carbon removal space. “We realised there wasn’t an accessible resource for professionals who need to understand carbon removal without delving into highly technical content,” says Marian.

The book is designed to make carbon removal more understandable for corporate sustainability professionals tasked with integrating it into their strategies. “We wanted to provide a clear starting point for managers to learn about carbon removal technologies and their role in a net-zero strategy,” he adds.

Why and how companies buy CDR

Companies buy carbon removal credits for various reasons. Some are driven by CSR goals or to enhance their brand. Others, particularly larger corporations, see it as a long-term investment in technologies that will shape their future operations.

“We’re seeing a shift towards more strategic purchases,” Marian explains. “It’s not just about ticking boxes. Companies are aligning their carbon removal investments with their core business or securing future technologies.”

However, despite growing interest, Marian acknowledges that demand has not yet reached expectations. “The gap between supply and demand is shrinking, but we’re not there yet. The market is still maturing,” Marian notes.

The growing role of compliance in carbon removal

As the carbon removal sector matures, many are looking to compliance systems like the EU Emissions Trading System (ETS) to drive demand. However, there are risks if these frameworks arrive too soon.

“If compliance comes too quickly, we risk focusing on the cheapest solutions and excluding technologies that need more time to scale,” Marian cautions. “We must avoid stifling emerging solutions.”

While compliance could bring stability, Marian stresses the need for balance. “If it becomes too rigid, it could squeeze out technologies like biochar, DAC, and enhanced rock weathering, which need time to mature.”

He believes that a more flexible approach to compliance would allow innovation to flourish. “Compliance is essential, but it must work hand in hand with innovation,” he says.

Navigating carbon removal portfolios

Companies are building carbon removal portfolios, spreading their investments across different technologies. But, as Marian points out, there are challenges with this approach.

“Diversification helps spread risk, but it can also mean that no single technology gets enough funding to scale quickly,” he says. Companies like Airbus have opted to buy into single projects to help specific technologies get off the ground. But this approach has its own risks.

While diversifying portfolios makes carbon removal more affordable, companies must ensure they’re not spreading their investments too thin. The key, especially for smaller companies, is finding the right balance of technologies to support, while navigating a market that’s still in its infancy.

Conclusion

As the carbon removal market evolves, businesses must adapt. While compliance frameworks will likely help stabilise the sector, it’s crucial to ensure they don’t stifle innovation.

For companies looking to invest in carbon removal, it’s crucial to balance short-term cost considerations with long-term innovation. By strategically supporting a range of carbon removal technologies, businesses can help scale effective solutions that will be key to meeting global climate goals.

In this episode, Simon Bager, Co-Founder and COO at Klimate, speaks with Noah McQueen, Director of Science and Innovation at Carbon180, about CDR in a systems thinking perspective, geopolitical uncertainties, and resilience systems.

TL;DR

• Carbon removal is a "system of systems"—technology, policy, finance, and communities must work together for real impact.
• Success depends on building resilient, adaptable, and transparent ecosystems, not just technological breakthroughs.
• The Nordic region shows that even advanced systems can stall without community engagement.
• Scaling carbon removal now requires strategic, disciplined investment and a focus on proven solutions.
• Resilient carbon removal systems are diverse, locally adapted, redundant, and supported by evolving policy.
• Progress is measured by transparency, collaboration, infrastructure consolidation, and community integration.
• The sector’s collaborative culture and scientific rigor are its greatest strengths.
• Achieving gigaton-scale impact means shifting from rapid growth to building durable, honest, and adaptable infrastructure.

Systems thinking in a CDR perspective

Carbon removal operates within an interconnected web of systems—energy, materials, finance, policy, and community engagement. It’s not just about technology; it’s about ensuring that all supporting systems evolve together to scale effectively. Essential components include policy frameworks, financial infrastructure, public education, and robust monitoring standards. In the Nordic region, while technological and policy infrastructure is strong, the lack of public understanding and support has hindered progress. This highlights how even well-developed systems can stall if one element fails to keep pace.

Geopolitical uncertainties in capital markets and scaling CDR

The landscape for carbon removal has shifted, with the easy access to capital coming to an end. As interest rates rise and venture capital becomes more selective, carbon removal companies face a critical financing gap. Drawing lessons from the wind power sector, carbon removal must prioritise proven technologies that can demonstrate near-term success, maintain research pipelines, and focus on delivering on contracts. This strategic approach to capital allocation will be key in scaling infrastructure while managing rising costs and investor uncertainty.

Resilience systems and high accountability

Building resilient carbon removal systems requires diversity, redundancy, and adaptability. A robust portfolio should incorporate various methods, tailored to specific geographical contexts, with redundant infrastructure to ensure reliability. Policy frameworks must evolve with new evidence and provide long-term certainty for investors. Key indicators of resilience include increased transparency, stronger cross-sector collaboration, infrastructure consolidation, and community integration. These principles will be crucial for scaling carbon removal systems in a way that can adapt to changing conditions and meet long-term climate goals.

Conclusion

Carbon removal’s success depends on optimising the entire system—not just individual technologies. As the sector matures, the focus must shift from rapid scaling to building durable, resilient infrastructure capable of delivering gigaton-scale impact over decades.

This requires honest assessment of system weaknesses, strategic resource allocation, and continued collaboration across all stakeholders. The technical challenges are solvable—the real work lies in aligning the human systems that will determine whether carbon removal fulfils its critical role in addressing climate change.

The path forward demands both optimism and realism: optimism about the sector’s potential and the dedication of its participants, and realism about the complex, interconnected challenges that must be addressed to achieve lasting success.

If your organisation is ready to take meaningful climate action, consider Klimate as your partner in navigating the complexities of carbon removal.