The U.S. trucking industry is taking a major step toward electrification as shippers move from pilot projects to large-scale fleet commitments.

Smart Freight Centre and Catalyst Mobility, formerly CALSTART, have helped organize a 2,500-truck battery-electric Class 8 order through their Zero-Emission Truck Shipper-Carrier Alliance Leading Electrification (ZET SCALE) program. The organizations say the deal is the largest electric Class 8 truck order in the U.S. and could nearly double the country’s existing electric Class 8 fleet.

The press release says Tesla has been selected as the primary original equipment manufacturer (OEM) for the initial procurement following a competitive request-for-proposals process. Kenworth, Volvo and RIDE will remain secondary options for carriers whose operating requirements call for different truck configurations.

The development comes at a critical point for U.S. freight. Trucks move enormous volumes of goods across the country, but the sector remains heavily dependent on diesel.

Why Heavy Trucks Matter for U.S. Emissions

Transportation is the largest source of direct greenhouse gas emissions in the U.S. economy. Within transportation, medium- and heavy-duty trucks accounted for 23% of transportation-sector greenhouse gas emissions in 2022, according to the EPA.

The emissions challenge is particularly significant for long-haul trucking. The U.S. Department of Energy estimates that long-haul freight trucks account for only about 7% of medium- and heavy-duty vehicles but around 38% of their greenhouse gas emissions, reflecting their high mileage, heavy loads, and energy consumption.

The broader medium- and heavy-duty vehicle fleet is also still dominated by fossil fuels. A DOE analysis found that about 92% of these vehicles ran on diesel and 7% on gasoline, with natural gas and propane accounting for roughly 1%.

That makes Class 8 trucks an important target for decarbonization.

Electric Truck Sales Are Growing, But From a Small Base

The U.S. electric truck market is expanding, although heavy-duty adoption remains relatively small compared with conventional trucking.

• The International Energy Agency said global electric truck sales surpassed 400,000 units in 2025, with electric heavy freight truck sales nearly tripling to about 230,000 units.

U.S. electric truck sales increased 25% to roughly 17,000 units in 2025. However, more than 95% of those U.S. sales were medium freight trucks, partly because Rivian’s electric delivery vans are included in the category.

• For the heavier Class 8 segment, the numbers are much smaller. Reporting based on the International Council on Clean Transportation’s 2026 market monitor put U.S. zero-emission heavy truck sales at about 875 units in 2025, representing only around 0.3% of the market.

The ZET SCALE procurement therefore stands out because its initial order is several times larger than annual U.S. zero-emission heavy-truck sales recorded in 2025.

Tesla (TSLA) Semi Gets a Major Commercial Opportunity

Tesla’s Semi is at the center of the new procurement. As per reports, Tesla has officially started high-volume production of its Semi electric truck at a new dedicated factory in Nevada. The company says the facility can produce up to 50,000 electric trucks a year.

The company currently lists the Semi with an estimated 500-mile range, energy consumption of about 1.7 kWh per mile, and gross combination weight of up to 82,000 pounds for the long-range version. The company says its Megacharger system can restore up to 60% of range in 30 minutes, with charging capability of up to 1.2 MW.

Tesla has also said Semi deliveries will start in 2026. However, the company has faced delays in bringing the truck to high-volume production. In July, Tesla said it was working to increase battery production to support production of the Semi at scale.

The ZET SCALE order allows Tesla to move from limited deployments toward a much larger commercial fleet base.

It also comes as Tesla prepares to expand the Semi beyond the U.S. Reuters reported in September that the company is targeting the European heavy-duty market, where several established truck manufacturers already offer battery-electric models.

Microsoft and PepsiCo Help Aggregate Demand

The bigger story behind the order, however, is not simply Tesla.

ZET SCALE is designed to solve one of the biggest challenges facing electric trucking: fragmented demand.

Individual fleets often hesitate to place large electric-truck orders because of higher upfront costs, uncertain residual values, charging requirements, and questions about how vehicles will perform across different routes.

The alliance pools demand from multiple shippers and carriers. Founding participants include Microsoft and PepsiCo, among others. By combining their requirements, ZET SCALE created a larger purchasing pool that encouraged truck manufacturers to compete for the business.

The model could also help reduce costs beyond the truck itself.

The key advantages include:

• Bulk purchasing: Larger orders can improve pricing and strengthen the business case for electric trucks.
• Shared infrastructure: Deployments are concentrated around freight hubs where charging assets can achieve higher utilization.
• Financing support: ZET Financial plans to use a fair-market-value leasing structure designed to reduce residual-value risk for carriers.
• Operational data: Fleet-specific analysis can compare electricity, diesel, maintenance, and financing costs.
• Multiple OEM options: Tesla leads the first procurement, while Kenworth, Volvo and RIDE provide alternatives for different operating needs.

Ten Freight Hubs Form the First Deployment Wave

The initial deployments will focus on major freight corridors rather than spreading trucks thinly across the country.

ZET SCALE has identified 10 primary freight regions, including Southern California and Los Angeles, Northern and Central California, Seattle-Tacoma, Houston, Dallas, San Antonio, Chicago, Atlanta, and the Northern New Jersey-New York region.

This approach is important because electric trucking depends on more than vehicle availability. Charging infrastructure, route length, electricity prices, truck utilization, and local operating conditions all influence the economics.

Concentrating trucks around established freight hubs can allow fleets to share charging infrastructure and maximize vehicle utilization.

From 2,500 Trucks to 10,000

The 2,500-truck order is being positioned as the first phase rather than the final target.

ZET SCALE aims to expand the model to 10,000 or more electric trucks, while recruiting additional shippers and carriers and expanding into new regions.

That ambition comes as U.S. policymakers and industry groups continue to look for ways to reduce emissions from heavy-duty transportation. DOE’s SuperTruck 3 initiative, for example, is focused on electric and hydrogen fuel-cell technologies and targets a 75% lifecycle reduction in medium- and heavy-duty truck greenhouse gas emissions.

The challenge is no longer simply developing an electric Class 8 truck. The industry must build the commercial ecosystem around it.

ZET SCALE’s approach brings together shippers, carriers, manufacturers, financiers, and charging infrastructure around one procurement strategy. If the model works, it could offer a path for freight companies to electrify without each fleet having to solve the same cost and infrastructure problems independently.

For Tesla, meanwhile, the order could provide an important bridge from limited Semi deployments to a much larger commercial market.

And for U.S. freight decarbonization, the significance may extend beyond the 2,500 trucks themselves. The bigger test is whether aggregated demand can turn electric Class 8 trucks from an emerging technology into a scalable fleet solution.

• READ MORE: Truck Titans Clash: Tesla Semi vs. Nikola Hydrogen 

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Brazilian carbon removal company Mombak has reached the first close of its second reforestation fund, targeting $150 million to finance restoration projects in the Amazon. At the same time, Mombak has signed a multi-year carbon removal purchase agreement with Salesforce, adding another major corporate buyer to its growing customer base.

The amount raised in the first close was not disclosed. The new fund also has access to a R$200 million credit line, worth about $38.9 million, from Brazil’s Climate Fund, operated by state development bank BNDES.

Mombak has already attracted major buyers including Google, Microsoft and McLaren Racing. The new Salesforce agreement is significant. It brings in another big corporate buyer and comes as demand for better carbon removals grows.

The company is starting its second major funding cycle. It used its first $120 million fund to support restoration in the Brazilian Amazon.

Mombak Opens Its Second $150M Amazon Fund

Mombak’s Amazon Reforestation Fund II will invest in projects that restore degraded land in the Brazilian Amazon. The company did not disclose the size of the first close or the investors involved. Its target is to raise up to $150 million.

The fund also has access to a R$200 million BNDES credit line. The funding comes through Brazil’s Climate Fund, a government climate-finance program managed through BNDES’s lending operations. The fund supports projects that reduce greenhouse gas emissions and help Brazil adapt to climate change.

Mombak could access nearly $189 million in potential capital from the equity fundraising target and credit facility. However, they haven’t raised the full $150 million target yet, and the credit line is debt, not equity.

The new funding comes as Brazil tries to expand forest restoration and attract more private capital into nature-based climate projects.

BNDES announced in June that R$834 million in new Climate Fund projects will help restore over 65,600 hectares. This includes planting more than 108 million native trees and creating over 27,000 green jobs.

Mombak is therefore part of a much wider push to use public finance to bring more private money into Brazilian forest restoration. Gabriel Haddad Silva, CEO of Mombak, noted:

“The market spent years asking whether high-integrity reforestation could actually deliver. We answered that with our first deliveries ahead of schedule. Now, we are scaling our operations, with renewed support from investors, customers and BNDES.”

The First Fund Planted Nearly 15 Million Native Trees

Mombak’s first reforestation fund raised $120 million from investors including an AXA fund, CPP Investments and Bain Capital. The funding supported restoration projects across 15 Amazon farms, where Mombak has planted nearly 15 million native trees.

The company has also begun delivering actual carbon removal credits.

In August, Mombak announced its first issuance of more than 21,000 tonnes of CO2 removals from native, biodiverse reforestation projects in the Amazon. The credits were certified by Isometric using a Core Carbon Principles-approved protocol. They were delivered over two years early.

Early delivery is notable because delivery delays have been a major problem in the voluntary carbon market. It also gives Mombak a track record to show potential investors and buyers before it scales its second fund.

Mombak expects a much larger issuance of about 80,000 tonnes of reforestation carbon removal credits by the end of 2026. These figures are issued or expected credits, not the total amount of carbon that the company’s new fund could eventually generate.

• SEE MORE: Brazil’s Mombak Delivers Amazon Carbon Credits Early, Giving Google a Climate Win

Salesforce Expands Its Carbon Removal Buying

The Salesforce agreement adds another major technology company to Mombak’s buyer base. The company has buyers like Google, Microsoft, and McLaren Racing. Earlier deliveries also went to McKinsey & Company, Bain & Company, Climeworks, Commons, and Union Square Ventures.

The financial value and volume of the new Salesforce agreement were not disclosed.

Salesforce is already an active buyer of carbon removals. Its FY2026 Stakeholder Impact Report says the company contracted 41,000 tonnes of carbon dioxide removal across six different pathways during the year. It also maintained a commitment to compensate for 100% of its annual emissions with high-quality avoidance and removal credits.

Salesforce’s climate strategy also includes direct emissions cuts. The company saw a 66% drop in Scope 1 and 2 market-based emissions compared to FY2019. It also achieved a 67% reduction in Scope 3 market-based emissions intensity.

That distinction matters. Carbon removals are being used alongside emissions reductions, not as a substitute for them.

Nature-Based Removals Are Scaling Fast 

Mombak’s expansion comes as corporate demand for carbon removals is growing, although the market remains concentrated.

CDR.fyi reported that durable carbon removal purchases excluding Microsoft and Frontier-linked buyers grew at a 151% compound annual rate from 2021 to 2025. Deliveries grew at a 131% annual rate over the same period.

Nature-based removals remain a much larger market than many engineered carbon removal technologies.

CDR.fyi‘s 2025 market survey found that about 11 million tonnes of nature-based removal credits were retired in 2024, compared with roughly 200,000 tonnes of durable engineered CDR. It also found that buyers expected nature-based removals to remain the larger category in the near term.

The broader carbon market is also attracting more investment. MSCI estimates that capital in the global carbon credit market hit $22 billion in 2025. This is up 72% from 2024 and over five times the level in 2021. The research points to growing use of long-term financing and offtake agreements to secure future carbon supply.

That model is especially important for reforestation. Projects need large amounts of capital before trees grow and begin generating verified removal credits.

BNDES Sees Demand Broadening Beyond Big Tech

Mombak’s new fund also comes as the buyer base for carbon removals could become more diverse. Technology companies have been major early buyers because of their growing emissions from data centers and AI infrastructure. But BNDES officials said that demand is also increasing from oil, mining, and steel companies.

Mombak’s CEO, Gabriel Silva, said better reforestation methods and higher productivity are lowering costs. This could make carbon removals appealing to more buyers. This could be important for Brazil.

The country has large areas of degraded land that could potentially support restoration, while its emerging carbon market is creating new ways to finance climate projects.

But voluntary reforestation credits remain different from credits issued under Article 6 of the Paris Agreement. Mombak’s current business is focused on voluntary carbon removal purchases. Its credits should not automatically be treated as internationally transferred mitigation outcomes.

Can Mombak Turn Fresh Capital Into Carbon Removals?

Mombak’s new fund combines three important parts of the carbon market: long-term investment, corporate offtake agreements and physical restoration.

The first fund showed that Mombak could attract institutional capital, plant millions of native trees and deliver its first credits earlier than planned. The second fund aims to take that model to a larger scale.

The challenge now is turning financial commitments into measurable and lasting carbon removals. Forest projects need strong land rights, long-term monitoring, credible carbon measurement and safeguards against reversal from fire, drought and other risks.

The market also needs more buyers. The Salesforce agreement helps on that front by adding another major corporate customer to the sector. Mombak’s wider buyer base suggests that demand is beginning to spread beyond a small group of technology companies.

For Brazil, the opportunity is larger still. BNDES is using public financing to help attract private capital into forest restoration, while companies such as Mombak are building commercial models around carbon removal.

The key test will be whether Mombak and other developers can turn that capital into verified, durable carbon removals at scale while delivering wider benefits for Brazil’s forests and communities.

• READ MORE: Costa Rica’s Forests Deliver 10.3M Tons of Net Removals in UN-Backed REDD+ Review

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Gevo is increasingly relying on carbon credits and U.S. clean-fuel incentives to improve the economics of its renewable fuels business. Chief Executive Officer Paul Bloom said at a Water Tower Research conference on September 23 that Gevo now expects more than $60 million in 2026 non-GAAP adjusted EBITDA, up from its earlier $30 million target.

The company says carbon monetization, the Section 45Z Clean Fuel Production Credit, stronger operations, and new Canadian clean fuel opportunities are behind the higher outlook. The forecast is important because it shows how carbon value can add another revenue stream to low-carbon fuel production.

However, the $60 million figure is a company forecast, not reported earnings. Gevo must still deliver the expected tax-credit sales, carbon revenues, and operating improvements.

Carbon Value Is Becoming a Second Revenue Engine

Gevo’s strategy is built around getting value from both its fuel and the carbon benefits linked to that fuel. Its main asset is Gevo North Dakota, a low-carbon ethanol plant in Richardton, North Dakota, with carbon capture and storage (CCS) on site.

The facility produces about 67 million gallons of low-carbon ethanol a year and currently captures and stores roughly 180,000 metric tons of CO2 annually. The site has an operating Class VI well and enough permitted storage capacity to potentially reach 1 million tonnes of CO2 per year.

The captured biogenic CO2 can generate carbon removal certificates, while the plant’s low carbon intensity can also increase the value of fuel-related incentives.

Gevo calls this approach “carbon arbitrage.” The company can seek value from different carbon markets and choose where the carbon attribute has the highest value, although a particular carbon benefit cannot be sold twice.

Chief Executive Officer Paul Bloom said:

“For every ton of fuel we produce about a ton of carbon dioxide. We capture that carbon dioxide and sequester it in a deep well under our North Dakota facility.”

Bloom said the combined value of carbon and incentives can add roughly $1.50 per gallon beyond the underlying fuel commodity value. This is a company estimate and can vary with market prices and policy rules. 

45Z Tax Credits Power Gevo’s 2026 Outlook

The Section 45Z Clean Fuel Production Credit is one of the biggest drivers of Gevo’s improved forecast. The company expects to monetize more than $70 million of 45Z tax credits during 2026, compared with $52 million in 2025.

Gevo also said it had already closed $20 million of 45Z credit sales after the second quarter and was targeting another $50 million by year-end. 

The 45Z credit is a U.S. tax incentive for qualifying domestic clean transportation fuels. The credit is available for fuel produced after 2024 and sold through December 31, 2029, following changes made by federal legislation in 2025. 

For fuel produced after 2025, eligible feedstocks must be produced or grown in the United States, Mexico, or Canada. The value of the credit depends on the fuel’s emissions performance and other requirements. 

That makes carbon intensity extremely important for producers like Gevo. Lower lifecycle emissions can increase the amount of tax credit attached to qualifying fuel.

In September 2026, the IRS also issued Notice 2026-53, providing the 2026 emissions-rate table and additional guidance on 45Z, including treatment of regenerative agricultural practices. 

Gevo Turns Tax Credits Into Cash

Gevo has demonstrated that 45Z credits can become actual cash rather than simply a future policy benefit. In 2025, Gevo North Dakota sold $52 million of 45Z tax credits. That included a $30 million sale in November, added to $22 million sold earlier in the year. 

The structure is important for Gevo’s business model. The company can sell tax credits to third-party buyers, turning the incentive into cash rather than waiting to use the full value against its own tax liability.

Gevo’s low carbon intensity helps support that value.

The company says Gevo North Dakota has a carbon-intensity score in the low 20s grams of CO2e per megajoule under the GREET model variation proposed for 45Z. British Columbia has previously assigned the plant a score of 19 gCO2e/MJ. 

Its on-site CCS is a major reason for the low score. This creates a direct connection between carbon management and fuel economics.

• SEE MORE: Gevo Advances BECCS Strategy to Meet Rising Demand for Durable Carbon Removal

Canada Adds Another Carbon Revenue Channel

Gevo’s stronger 2026 outlook also includes a new pathway under Canada’s Clean Fuel Regulations (CFR). Canada’s CFR operates a credit market in which each compliance credit represents one tonne of lifecycle CO2e emissions reduction. Credits can be generated by supplying lower-carbon fuels or by reducing the lifecycle carbon intensity of fuels. 

In the second quarter, Gevo received approval for a new pathway covering its low-carbon ethanol with CCS.

The approval allows Gevo to recognize carbon value from qualifying ethanol previously delivered into the Canadian market. The company expected sales under the new pathway to begin appearing in its third-quarter 2026 results. 

This gives Gevo another compliance market alongside U.S. incentives and voluntary carbon removal sales. That diversification is important because carbon prices and fuel markets can change.

North Dakota Expansion Could Scale Fuel and Carbon Revenue

Gevo is also increasing the amount of fuel and carbon value its North Dakota facility can generate. A debottlenecking project is expected to raise low-carbon ethanol output to about 75 million gallons per year, a 10% to 15% increase in ethanol, coproduct, CCS and related incentive volumes starting in 2027.

Gevo said the project remained on track in September and that its new CO2 degassing system had been commissioned ahead of schedule. 

The company plans a big expansion. This could double North Dakota’s ethanol production to 150 million gallons per year. It will include CCS and aims to start in 2028.

More production could mean more low-carbon fuel, more captured biogenic CO2 and more associated incentives. Gevo’s North Dakota site therefore sits at the center of its near-term growth strategy.

Carbon Removal Demand Is Rising But Delivery Lags

The wider carbon removal market is growing, but it remains relatively young. CDR.fyi currently tracks 50.5 million tonnes of durable carbon removal contracted globally, compared with only about 1.7 million tonnes delivered. Its current weighted-average price across publicly disclosed purchases is around $196 per tonne. 

The large gap between contracted and delivered tonnes shows why operational projects can have an advantage.

Gevo’s North Dakota facility is already operating and has generated hundreds of thousands of certified removal credits. That gives the company an existing supply base while many newer CDR projects are still being developed.

However, Gevo’s future carbon revenue will still depend on credit prices, buyer demand, and the amount of CO2 that can be captured and certified.

Can Carbon Management Change the Economics of Renewable Fuel?

Gevo’s updated more-than-$60 million 2026 adjusted EBITDA outlook reflects a business model that goes beyond selling ethanol. The company produced $47 million in revenue in the second quarter of 2026 and generated $11 million of adjusted EBITDA. For the first six months, revenue reached about $89.4 million, while adjusted EBITDA was $19.6 million.

The full-year target is therefore a significant step up from first-half results.

Gevo has said the stronger outlook is supported by 45Z monetization, the Canada CFR pathway, low-carbon fuel sales, operational improvements and its carbon business. The broader market lesson is that carbon value can materially change the economics of renewable fuel production.

For Gevo, ethanol provides the core commodity product. CCS creates carbon removal value. 45Z creates a federal clean fuel incentive. Canada’s CFR creates another compliance market. The challenge now is turning those different revenue streams into durable cash flow.

If Gevo can continue producing low-carbon fuel, monetizing eligible incentives and delivering certified carbon removals, its North Dakota facility could serve as a model for how fuel production and carbon management can operate as one integrated business.

• READ MORE: Gevo Expands Carbon Credit Business as Low-Carbon Fuel Growth Boosts 2026 Outlook

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Renewable energy and carbon removal have emerged as two important themes at Climate Week NYC 2026, as companies and policymakers look for ways to turn climate targets into real projects. The event, running from September 20 to 27, is highlighting a growing problem: renewable energy is expanding quickly, but in many markets companies still cannot find enough clean power to meet their targets.

At the same time, US states and local governments are exploring new ways to support carbon dioxide removal (CDR) as federal support becomes less certain.  The two issues are closely linked. Companies need more clean electricity as power demand rises, while CDR could help address emissions that remain after direct cuts.

Renewable Energy Is Growing, But Supply Is Still Tight

A new RE100 Annual Disclosure Report released ahead of Climate Week found that limited renewable supply and cost are the biggest barriers for companies trying to reach 100% renewable electricity. Lack of procurement options and regulatory barriers are the next biggest challenges.

The report covers 408 RE100 members, providing one of the largest datasets on corporate renewable energy procurement.

Globally, RE100 companies now source 59% of their electricity from renewable energy, up from 53% in the previous report. Importantly, 65% of that renewable electricity comes from facilities built within the past 15 years, showing that corporate buyers are helping support newer renewable capacity.

But progress varies widely by market. In South Korea, renewables account for only 12% of RE100 members’ electricity use, and just 5% of members have reached 100%. In Taiwan, renewables supply 6% of members’ electricity, while in Singapore the figure is also 6%, up only one percentage point from the previous year.

Japan improved from 36% to 40%, while South Africa jumped from 54% to 84% and Mexico from 38% to 52%. China and India each have 28% of RE100 members using 100% renewable electricity. This shows some companies are finding ways to overcome supply barriers, even in tough markets.

Renewables Hit a Record — But the 2030 Gap Remains

Corporate demand is rising as the global renewable industry expands at record speed.

The International Renewable Energy Agency (IRENA) noted that the world added a record 692 gigawatts (GW) of renewable power in 2025. This raised the total installed renewable capacity to 5,149 GW.

Renewables made up 85.6% of all new power capacity added during the year. Solar accounted for about 510 GW of the 2025 increase, while wind added nearly 159 GW. Despite this growth, the pace is still below what is needed to meet the global goal of tripling renewable power capacity by 2030.

António Guterres, United Nations Secretary-General, said:

“Renewable energy records are being smashed year after year as the clean energy revolution accelerates. But we must go further and faster to clear the bottlenecks that delay the transition, drive investment to developing countries, and break our addiction to volatile fossil fuels once and for all.”

IRENA estimates that renewable capacity must reach about 11.2 terawatts (TW) by 2030. That requires average additions of around 1,122 GW every year through 2030 and annual growth of about 16.6%.

• If the 2024 growth rate were maintained, the world would reach only about 10.3 TW, leaving a shortfall of roughly 0.9 TW.

The IEA also expects strong renewable growth but says current policies are not yet enough to fully deliver the global tripling target. Its main forecast puts renewable capacity at about 9,530 GW in 2030, while an accelerated policy scenario reaches more than 10,400 GW.

The gap is not simply about building more solar and wind farms. Grid connections, transmission, storage, permitting, and access to renewable power contracts are also becoming major constraints.

• RELEVANT: TotalEnergies and Masdar’s $2.2 Billion Deal Signals a Big Push into Asia’s Renewable Energy Boom

US States Step In as Carbon Removal Needs Grow

Carbon removal was another major issue during Climate Week. At a panel on September 21 at Columbia Law School’s Sabin Center for Climate Change Law, experts looked at how US states can back CDR since federal action is uncertain.

The panel, titled “Mind the Gap: How States Can Advance Carbon Dioxide Removal Despite Federal Backsliding,” brought together experts from the Sabin Center, American University, Rocky Mountain Institute, and California Ocean Science Trust.

The discussion focused on how states can use policy and legal tools to help move CDR from research into larger commercial projects.

The need is significant. The 2026 State of Carbon Dioxide Removal report estimates current CDR at about 2.2 billion tonnes of CO2 per year. That amount needs to increase substantially in climate pathways consistent with the Paris Agreement.

The report projects a gap of 1.2 billion tonnes per year by 2035. It estimates 5.2 billion tonnes by 2050. This gap is between current country pledges and the CDR levels in high-ambition Paris-compatible scenarios.

That does not mean every tonne will need to come from engineered technologies. Nature-based CDR, such as afforestation and soil carbon, remains important, while direct air capture, mineralisation, biochar and ocean-based approaches are also developing.

States Are Already Testing Market Tools

Several states are already creating policies that could support CDR development.

• California runs the Carbon Removal Innovation Support Program, which provides financial incentives for direct-air-capture projects. In 2026, the California Energy Commission opened a solicitation for pre-commercial DAC demonstrations and community engagement. California’s energy research and development programs invest over $200 million each year to create new energy technologies.
• Washington State has taken a different approach through its Climate Commitment Act and Cap-and-Invest Program. State rules accept CDR in the carbon market. They let carbon management projects create offset credits. Washington requires that captured CO2 be stored in permanent sequestration pathways. This keeps it out of the atmosphere for a minimum of 1,000 years.
• Massachusetts is building its policy base through research. The state-supported Carbon Dioxide Removal Study looks at costs, potential scale, long-term storage, environmental effects, and policy options for CDR. This includes both state and nearby federal waters.

These approaches show that state governments do not need to use one policy model. They can support CDR through grants, market rules, research, standards, and project development.

CDR Needs Demand as Well as Technology

Moving CDR from small projects to a large industry requires more than scientific progress. Developers need buyers willing to sign long-term contracts. Investors need confidence that projects will have future revenue. Governments need rules for monitoring, reporting, permanence, and community impacts.

This is a key issue for the CDR market because many projects are still expensive and operate at small scales.

The US federal government previously helped create demand through research funding and carbon removal programmes. But states are increasingly being discussed as another source of support.

The Carbon Dioxide Removal Leadership Act, reintroduced in Congress in July 2026, suggests a federal purchasing program. This program aims to boost demand significantly and reliably. Carbon180 says public procurement could help the industry raise capital, expand production, and lower costs.

State action could complement such federal efforts where they remain available.

Climate Week Puts Delivery Back at the Center of Climate Goals

The discussions at Climate Week point to a common challenge across renewable energy and carbon removal: technology alone does not create a market.

Renewable power is already expanding rapidly, with 692 GW added globally in 2025. Yet, companies in markets such as South Korea, Singapore, and Japan still report limited access to clean electricity.

CDR faces an even earlier-stage market. Current removals are in the billions of tonnes. However, the 2026 State of CDR report shows we will need much more capacity to align with Paris pathways.

For renewable energy, the priority is building generation alongside grids, storage, and procurement systems. For CDR, the priority is creating the finance, demand, and rules needed to move promising technologies into commercial use.

The Climate Week discussions show how states and companies can help fill those gaps. For the clean energy market, the message is that record renewable growth still needs faster deployment and better access to supply. For carbon removal, the message is similar: scientific progress needs policy and market systems that can turn small projects into a scalable industry.

Together, the two trends highlight a broader shift in climate finance. The next phase of the energy transition will depend not only on setting targets, but on building the infrastructure, markets and investment systems needed to deliver them.

• READ MORE: New CDR Report Sounds Alarm on 5.2-Billion-Tonne Carbon Removal Gap by 2050

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