April 2026 Newsletter

In early April, several outlets reported that Microsoft had suspended negotiations on a number of CDR offtakes (Quantum, 2026a). Microsoft’s Chief Sustainability Officer, Melanie Nakagawa, subsequently clarified that the carbon removal programme remains firmly in place and that, in her words, any adjustments are part of a disciplined approach rather than a change in ambition (S&P Global, 2026; ESG Today, 2026). The episode carries weight because of scale. Microsoft accounted for roughly 90% of global CDR purchases in 2025 and contracted more than 45 Mt of removals in that year alone, against around 1.8 Mt cumulatively for Frontier, the next largest buyer (CDR.fyi, 2026; Chestnut Carbon, 2026).

The most immediate effect has been on financing conversations that were already fragile. A wave of CDR developers raised at the peak of the market in 2022 and 2023, and many of them are now coming up against the limits of that runway. Refinancing was already harder this cycle, with venture portfolios visibly tilting towards AI growth equity. The leaked Microsoft news has made the case for continued capital harder still for developers whose growth stories rested on near-term offtake from a small number of credible buyers. The market reaction also exposed something more reputational. A pause communicated quietly would have travelled less far than one that surfaced through a leak, and the energy spent reading signals into Microsoft’s pacing has, if anything, amplified the impression that CDR demand depends on a single engine.

The more constructive read is that this is a leadership transition rather than a retreat. Microsoft has done much of the difficult work the market needed: setting durability and integrity preferences, proving long-dated offtake structures and underwriting the surrounding ecosystem of MRV providers, registries, insurance products and contract templates that everyone else now benefits from (Chestnut Carbon, 2026). Buyer coalitions like Symbiosis (Google, Meta, Microsoft and Salesforce, focused on nature-based removals) and Frontier (focused on engineered pathways) have built shared diligence and procurement infrastructure that lowers the cost of entry for smaller buyers. The standards exist. The templates exist. What is missing is the next twenty, fifty, one hundred buyers stepping forward at scale.

For corporates, the lesson is to treat removal as a multi-year procurement commitment rather than an annual spot decision, and to use coalition diligence rather than rebuilding each assessment in isolation. Deliverability and balance sheet resilience should weigh more heavily than first-of-a-kind narratives in the projects buyers back. Governments need to do their part on demand signals. The UK, Sweden, Finland, Germany and Canada are moving with grants or purchase programmes, while France, southern and eastern Europe and the US remain largely silent (Quantum, 2026b). For the broader market, the lesson is that the institutional plumbing of CDR has to start carrying its own weight.

On 27 April, Carbonaires opened a Request for Proposals for offtake-backed financing of high-integrity carbon removal projects (Carbonaires, 2026). The RFP is open to engineered and nature-based pathways, including biochar, enhanced rock weathering, BECCS, direct air capture, mineralisation, afforestation and reforestation, soil carbon and blue carbon. Projects must hold a signed or imminent offtake agreement with a minimum contract value of $3m. Successful applicants will be structured and presented to a panel of institutional investors in our network for offtake-backed financing. Submissions are open until 22 May 2026.

Most of the recent commentary has focused on the demand side of CDR. The supply side has its own financing problem, and it is the one we built this RFP to address. Headline corporate ambition has continued to scale even through a difficult year. Around 63% of the Forbes Global 2000 now have a net-zero target, and Carbon Direct estimates a roughly 19 Mt gap between corporate CDR commitments and what is actually being purchased today (Net Zero Tracker, 2025; Carbon Direct, 2026). Even where corporates are ready to spend, the projects they could buy from often struggle to secure the capital they need to deliver against contracted volumes. The market does not lack high-quality projects, and on the demand side the next phase will be defined by buyers committing in size. What sits between the two is the financial infrastructure that turns ready offtake into delivered tonnes, and that is exactly what has been thin.

Carbonaires has been building that infrastructure for several years. Our 2024 streaming transaction with UBS into Carbon Removers, a Scottish BiCRS developer capturing CO2 from whisky distilleries, was a first-of-a-kind reference point for how mature capital markets structures can be applied to carbon removal. The RFP is the next step in extending that approach across a wider pipeline, and in opening up structured exposure to a panel of institutional investors looking for a credible route into the market.

Project developers with signed or imminent offtake contracts can register and apply at rfp.carbonaires.com/signup before the 22 May 2026 submission deadline. Investors interested in offtake-backed exposure to high-integrity carbon removal can get in touch directly. The wider point for the market is that the next phase of CDR will not be defined by another round of first-of-a-kind announcements. It will be defined by the financial infrastructure that turns committed buyers and ready supply into delivered credits.

On 1 April 2026, Vietnam issued Decree 112/2026/ND-CP setting out how projects can apply for a Letter of Authorisation under Article 6 of the Paris Agreement. The decree, which enters into force on 19 May 2026, divides eligible activities into a priority list (capped at 90% of credits transferred internationally with a corresponding adjustment) and an encouraged list (capped at 50%) (Decree 112/2026/ND-CP, 2026; Quantum, 2026c). Direct air capture, biochar, CCUS and modernised agricultural removals sit on the priority list. Forestry, REDD+, mangroves, improved forest management and agroforestry sit on the encouraged list. Vietnam now has bilateral agreements in place with Japan under the Joint Crediting Mechanism, with Singapore, with South Korea and with the Swiss KliK Foundation (KliK Foundation, 2024; NCCS, 2025).

Strictly, all Article 6 transfers, whether reductions or removals, require a corresponding adjustment that affects the host country’s NDC accounting (UNFCCC, 2022). The more useful version of the question is what kind of activity sits inside the host country’s planned NDC pathway and what does not. Most NDCs were drafted around emissions reductions in energy, transport and industry, and around LULUCF sinks. CDR generated from genuinely additional engineered or process-based projects, such as direct air capture, biochar and mineralisation, was largely outside the NDC pathway in the first place, so a corresponding adjustment on those tonnes carries limited domestic opportunity cost. Forestry sits at the opposite end of the spectrum. REDD+, IFM and mangrove credits map directly onto the host country’s existing LULUCF inventory and NDC accounting, which means a corresponding adjustment on those projects has a real cost to the host country which they will need to make up elsewhere. That logic is visible in Vietnam’s tiered caps. It is also visible in Singapore’s exclusion of afforestation and reforestation methodologies from its initial Ghana eligibility list (Quantum, 2025), and in countries like Zambia openly stating they intend to retain low-cost mitigation domestically and only sell higher-cost mitigation abroad (Carbon Market Watch, 2022).

The other reason this matters is the longer arc of where CDR demand will actually come from. In the short term, demand sits largely in the voluntary carbon market and is driven by corporate net-zero commitments which primarily do not require a corresponding adjustment. In the medium term, compliance markets are likely to start absorbing some of that CDR demand, with the EU ETS revision expected in 2026 anticipated to introduce permanent removals such as DACCS and BioCCS, and the UK integrating CDR from 2029 (European Commission, 2026; ICAP, 2026). In the longer term, sovereign procurement of internationally transferred credits to meet NDCs is the most consequential pool. The EU’s 2040 climate target, adopted in March 2026, allows up to 5% of effort from international credits, with quality criteria covering integrity, additionality, permanence and human rights safeguards (Council of the European Union, 2026; ICAP, 2026). What those criteria mean in practice, including the share of removals versus reductions and the types of credits that will qualify, is still unresolved and is expected to firm up over the coming months as the European Commission publishes its thinking. If the eventual criteria tilt towards removals, host country positive lists like Vietnam’s become an early read on where authorised, CA-backed CDR supply will actually be available.

For corporates or developers, a host country’s positive list is a useful proxy for where high-integrity, CA-backed CDR supply will exist at scale, and is increasingly part of long-term portfolio design rather than a downstream policy question. For investors, bilateral and PACM-aligned removals projects in priority-listed jurisdictions deserve closer attention as the longer-dated demand picture firms up. For developers, aligning project structures with host country positive lists from the outset is becoming part of the bankability story.