DAC Market Expansion: TD Bank’s 10-Year Climeworks Deal, 18, 000 Tonne Deep Sky Offtake (2025 to 2026)

DAC Commercial Scale, TD Bank’s 4 Offtake Deals and Portfolio Strategy (2025 to 2026)

The corporate market for Direct Air Capture (DAC) has fundamentally shifted from small-scale, exploratory purchases to strategic, long-term portfolio commitments, driven by landmark offtake agreements that now serve as the primary mechanism for commercial validation and project de-risking. Before 2025, corporate engagement was characterized by pilot-level credit purchases with limited financial impact. The recent period has seen a structural change, with major corporations like TD Bank using multi-year, multi-technology procurement strategies to secure a future supply of high-durability carbon removals and provide bankable revenue streams for capital-intensive projects.

• In a significant acceleration of market activity, TD Bank executed four major carbon dioxide removal (CDR) agreements between November 2025 and June 2026. This includes two 10-year DAC offtakes with Climeworks and Deep Sky, a 44, 000-tonne bio-oil sequestration deal with Charm Industrial, and a multi-year afforestation credit purchase from Chestnut Carbon.
• This portfolio approach signals a maturing procurement strategy. Instead of backing a single technology, leading buyers are diversifying investments across different removal pathways to mitigate execution risk, hedge against price volatility, and support a broader ecosystem of climate solutions.
• The trend extends beyond TD Bank, with pioneers like Microsoft continuing to sign large-scale deals for various CDR technologies, including a major biochar agreement with Varaha. The entry of financial institutions like TD Bank and JPMorgan Chase alongside tech giants diversifies the buyer base, creating a more resilient demand signal for the entire industry.

$12 B Market Surge, TD Bank Offtakes Signal Financial De-Risking

Announced offtake value has become the most critical leading indicator of the carbon removal market’s health, with financial commitments from corporations like TD Bank now serving as the de facto project financing mechanism for an industry where costs remain high. These long-term revenue guarantees are essential for developers to secure the billions in capital required to build and scale DAC facilities.

• The market saw a dramatic increase in future commitments in 2025, with the total value of announced offtake agreements reaching an estimated $12.25 billion to $13.7 billion. This future demand dwarfs the value of credits retired in the present, indicating strong corporate confidence in the long-term viability of durable removals.
• While technology companies led by Microsoft initiated this trend, the entrance of major financial institutions marks a pivotal expansion of the buyer base. TD Bank’s series of 10-year agreements and a similar deal from JPMorgan Chase with CO 280 demonstrate that the banking sector is now actively underwriting the sector’s growth.
• These agreements are crucial given the current high cost of Direct Air Capture, which ranges from $400 to $1, 000 per tonne. By locking in a buyer for future production, DAC developers can present a more bankable business case to traditional lenders and investors, accelerating the path to building large-scale plants.

Financing is Top Cost Driver for Engineered CDR

This section explains how TD Bank’s offtake agreements provide financial de-risking for the DAC market. The chart directly supports this by identifying financing as the primary cost driver for engineered carbon removal, demonstrating why actions that lower the cost of capital are so impactful.

(Source: Carbon Removal Updates – Substack)

Table: Major Corporate Carbon Removal Offtake Commitments

98% of Companies Fail to Disclose Net-Zero Capital Plans

While the section highlights major corporate offtake commitments, the chart provides crucial context by showing that the vast majority of companies are not making concrete net-zero plans. This contrast underscores the leadership of the firms mentioned in the section and the overall scarcity of corporate action.

(Source: LinkedIn)

Canada vs. Global, TD Bank’s Focus on Domestic and International DAC

While the early DAC market was centered in Europe, recent corporate procurement strategies, particularly from TD Bank, are actively fostering the development of North America as a primary hub for carbon removal projects. Buyers are leveraging offtake agreements not only to meet their climate goals but also to stimulate economic activity and technology leadership within their home regions.

• Before 2025, the most visible DAC activity was located in Europe, primarily associated with Climeworks’ pioneering plants in Switzerland and Iceland. North American projects were largely in planning stages.
• The 2025–2026 period has seen a definitive shift. TD Bank’s 10-year agreement with Quebec-based Deep Sky provides a foundational demand signal for Canada’s domestic DAC industry, anchoring a key developer in the region.
• This focus is reinforced by TD Bank’s portfolio deal with Climeworks, which specifically targets credits from projects across North America. This provides the Swiss company with guaranteed buyers as it expands its footprint on the continent.
• This trend is a direct response to supportive government policies in the region, which, when combined with strong corporate demand from buyers like TD Bank, creates a highly attractive environment for developers to build new DAC facilities.

Incentives Make Canadian DAC More Profitable Than US

The section focuses on a geographical comparison of DAC markets. The chart provides a direct ‘Canada vs. Global’ data point by comparing the profitability of DAC in Canada and the US, explaining why Canada is an attractive market for investment and a focus for TD Bank’s domestic strategy.

(Source: LinkedIn)

DAC from Pilot to Commercial, TD Bank’s Validation of Market-Ready Tech

The transition of corporate procurement from one-off, small-volume purchases to multi-year, large-volume offtakes represents the market’s clearest validation that DAC technology has advanced from a promising concept to a commercially deployable solution. Although costs remain high, buyers like TD Bank are now treating DAC as a viable, albeit premium, tool for achieving long-term net-zero targets.

• The period before 2025 was defined by demonstration projects. Facilities like Climeworks’ Orca plant proved the technology worked but were primarily seen as pilot-scale validations.
• The signing of 10-year binding agreements by a major financial institution like TD Bank in 2026 marks a crucial shift in perception. It signals a new level of confidence from sophisticated buyers in the ability of DAC providers to deliver verified, durable carbon removals over the long term.
• The continued high price point, estimated at $400–$1, 000 per tonne, confirms that DAC has not yet reached full technological maturity or mass-market scale. However, the willingness of buyers to pay this premium for high-permanence removal is what enables the industry’s learning curve and path to cost reduction.
• TD Bank’s decision to build a portfolio that also includes bio-oil and afforestation credits indicates a pragmatic view of the market. While DAC is now commercially viable, a diversified strategy remains the most prudent approach until the technology becomes more scalable and cost-effective.

Canada Has 1000+ Gigatonnes of CO2 Storage Potential

This section discusses the maturation of DAC technology from pilot to commercial scale. The chart supports the ‘market-ready’ argument by demonstrating that Canada has vast CO2 storage potential, ensuring that a critical downstream requirement for commercial-scale deployment is readily available.

(Source: The Hub)

TD Bank’s Next Move, Watching for PPA-Style Standardization in DAC

The next critical inflection point for scaling the Direct Air Capture market will be the shift from bespoke, privately negotiated offtake deals to standardized contracts modeled on the Power Purchase Agreements (PPAs) that were instrumental in scaling the renewable energy sector. The current wave of agreements from leaders like TD Bank and Microsoft is paving the way for this evolution by establishing market norms and proving the model’s viability.

• If this happens: A broader and more conservative set of corporate buyers, along with project finance lenders, will be able to enter the market with confidence, dramatically increasing the pool of available capital for DAC projects.
• Watch this: The emergence of standardized offtake term sheets, master agreements, and third-party financing structures for carbon removal. This will reduce transaction costs and timelines, making it easier for both buyers and sellers to execute deals.
• These could be happening: We can expect to see the development of aggregation platforms that allow smaller companies to pool their demand to sign larger, more impactful offtakes. This would further democratize access to high-quality carbon removal and accelerate the industry’s growth beyond its current reliance on a few large corporate champions.

The questions your competitors are already asking

This report covers one angle of the market for corporate carbon removal procurement. The questions that matter most depend on your work.

• Climeworks and Deep Sky investments and funding. Are offtakes from buyers like TD Bank sufficient to de-risk their first commercial-scale projects?
• Which financial institutions are following TD Bank’s lead in adopting large-scale, multi-technology carbon removal portfolios?
• Which corporations are gaining or losing ground in the market for high-durability carbon removals?
• How does DAC (Climeworks, Deep Sky) compare to bio-oil sequestration (Charm Industrial) for building a bankable corporate carbon removal portfolio?

This report does not answer these. Enki Brief Pro does.

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