Canada’s nascent carbon dioxide removal (CDR) industry is attracting growing attention from policymakers, investors and climate advocates as the country seeks tools to help achieve net-zero emissions targets and position itself as a global leader in climate technology.
The Canada Energy Regulator’s Market Snapshot: The rise of Canada’s carbon dioxide removal industry highlights how evolving policy frameworks, abundant natural resources and emerging technology developers are laying the foundation for an industry that may play an indispensable role in meeting Canada’s climate commitments.
CDR refers to a suite of technologies and processes that remove carbon dioxide (CO₂) from the atmosphere and store it permanently or use it in long-lived products. This can include direct air capture (DAC), biomass carbon removal and storage (BiCRS), enhanced rock weathering, carbon mineralization and ocean-based removal techniques. According to the Intergovernmental Panel on Climate Change, virtually all scenarios that limit global warming to 1.5°C involve large-scale deployment of CDR alongside deep emissions cuts.
The CER snapshot lays out how Canada’s combination of policy support, renewable energy resources, and geological storage opportunities creates conditions favourable to scaling such technologies domestically. It notes that 78 Canadian companies are currently active in the sector with 48 active and planned CDR projects, data visualized on the Carbon Removal Canada Carbon Console platform.
Federal climate policy is starting to reflect the importance of CDR. A key plank of Canada’s broader climate strategy is using government procurement to help create early demand for carbon removal services, with official commitments to purchase CDR projects that reduce government emissions. Such demand signals are crucial to making early projects economically viable.
Outside government, industry groups are pushing for a more robust policy framework. The Carbon Business Council, which represents more than 100 carbon removal companies, published a policy primer recommending a suite of federal actions — including stable tax incentives, clear regulatory frameworks and streamlined permitting — to unlock tens of billions in economic value and cement Canada’s leadership in the emerging global market. “Canada is positioned to lead on carbon removal with its abundant renewable energy, durable geological storage and expansive coastlines,” a council spokesperson said in a recent overview.
Independent analyses point to major economic upside if Canada scales its CDR industry. A 2023 report from Carbon Removal Canada, for example, estimated that widespread deployment of carbon removal solutions could create more than 300,000 jobs and add roughly $143 billion in GDP by 2050, all while advancing national climate goals.
Canada’s CDR landscape spans a range of technologies and business models. Montreal-based Deep Sky is one of the emerging players in the direct air capture space, developing pilot projects designed to capture hundreds of thousands of tonnes of CO₂ annually using a range of capture pathways and geological storage options.
Elsewhere, CarbonCure Technologies, originally founded in Halifax, has been commercializing carbon mineralization technology that injects captured CO₂ into concrete, permanently storing it while improving strength — a model that has seen adoption in buildings and infrastructure projects worldwide.
Beyond land-based removal, recent reports have underscored the potential of marine carbon dioxide removal (mCDR) approaches, which leverage Canada’s vast coastlines. Analysis from the Ocean Supercluster suggests that ocean-based approaches could create tens of thousands of jobs and contribute significantly to long-term removal capacity if developed responsibly.
Despite the momentum, significant hurdles remain. Most CDR technologies are still at early commercial scales and costly relative to traditional emissions reductions, meaning sustained public and private investment will be necessary to drive down costs and build infrastructure at scale. The energy requirements for processes like direct air capture, potential environmental impacts of certain ocean-based methods, and the need for robust carbon storage networks are among the challenges noted by both the CER and independent research.
The CER snapshot also points to land-use conflicts, permitting issues and the need for transparent measurement, reporting and verification (MRV) systems that ensure CO₂ removals are real, permanent and additional.
Internationally, demand for carbon removal solutions is rising as companies and countries seek to address hard-to-abate emissions in sectors like steel, aviation and heavy industry. Global consultancies estimate the CDR market could be worth more than US$1 trillion by mid-century, a figure that underscores why countries with strong natural advantages — including renewable energy, geological storage and research capacity — are vying to establish early leadership.
Canada’s relative strength in these areas — blended with emerging policy and market signals — has attracted interest from major multinational corporations seeking removal credits as part of their climate strategies. Names such as Microsoft, Amazon, Shopify and Google have engaged with Canadian initiatives, reflecting a cross-sector push into removal markets.
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