Climate action is entering a new phase. Cutting emissions remains the top priority, but a hard truth is emerging: sectors such as aviation, shipping, cement, and steel are not on track to reach their climate goals by 2050. The path to achieving these goals has been blocked by technological and economic limitations, not to mention global instability, redirecting priorities. In the current moment, as countries face economic headwinds, companies are focused on survival today, not on how they will operate in 2050.

That said, there has been real progress. The Canadian steel industry is targeting a 40 percent cut in emissions by 2030, and cement has a roadmap to reduce 15 megatonnes of carbon. Yet the low-hanging fruit has already been picked. Efficiency gains and incremental technology improvements cannot close the remaining gap. Canada still faces dozens of megatonnes in stubborn emissions annually that cannot be eliminated affordably with today’s tools. Meanwhile, the breakthrough solutions we need, such as hydrogen-based steel and sustainable aviation fuels at scale, remain years away from commercial reality.

That’s the problem: we have climate deadlines that can’t wait for technology timelines.

This challenge is global. Even if Canada decarbonized its industry tomorrow, these sectors also exist in other countries that face similar problems, but often have fewer resources to solve them. For example, the governments of Canada and Ontario contributed over $1B to ArcelorMittal Dofasco and Algoma Steel to electrify their production, which halved the Canadian steel industry’s emissions. However, other top steel-producing countries may not offer similar subsidies, creating barriers to global decarbonization. Permanent carbon removal offers a way to bridge the gap, allowing sectors to hit net-zero targets while new solutions scale in availability and affordability.

This reality is giving rise to an emerging international trade system where countries can export and import carbon removal services. Because CO₂ does not respect borders, enabling global decarbonization through exportable carbon removal is not simply desirable; it is necessary.

For Canada, this is not only about climate. It is about positioning ourselves in what could become a $1.2 trillion global market. We have the geology, the expertise, and the clean energy potential to become a major supplier. The question is whether we can move quickly enough to capture the opportunity while the rules are still being written.

Why export markets for carbon removal?

The fundamental driver for the carbon removal export market is geographic and economic mismatch. Countries with hard-to-decarbonize sectors driving their economies will require carbon removal, sooner or later, to address emissions. However, not all of these countries possess the natural advantages to deliver carbon removal technologies at scale.

Canada has more than 389,000 megatonnes of geological storage potential, abundant renewable energy, and technical expertise to host massive carbon removal projects. Our technology portfolio spans the full spectrum: DAC and BECCS that can deliver industrial-scale removals, ocean-based approaches using our extensive coastlines, biochar that supports wildfire mitigation, and mineralization or enhanced weathering that can integrate with mining and agriculture. Canada could remove far more carbon than we need for our own climate goals.

By contrast, Singapore lacks space for large-scale DACCS or geological storage. Yet its carbon tax allows facilities to meet up to five percent of their emissions liability through international credits, creating immediate demand for verified removals delivered from elsewhere. Switzerland faces similar limits at home and is actively pursuing partnerships with countries that can supply the removals it needs to meet its climate goals.

This is an export opportunity waiting to happen.

Just as nations already trade renewable energy certificates or agricultural goods based on comparative advantages, durable carbon removal is becoming a traded service. Countries with the right geology and energy can specialize in removal, while others can purchase what they need.

The infrastructure taking shape

For export countries like Canada, success requires both physical and regulatory infrastructure.

First, we need common standards and accounting rules, or a shared language for what counts as permanent removal.

Right now, carbon removal sectors have been developing in isolation, each with its own verification methods. But just as free trade agreements harmonize product standards, international carbon removal trade needs clear, consistent and widely applicable rules that make it easy to do business. Key questions must be answered: What makes a removal permanent? Who is liable if stored CO₂ leaks? How do we prevent double-counting across borders?

A Canadian DAC facility needs to meet the same permanence standards that Singapore or Switzerland would accept for their climate commitments. This is where frameworks like Article 6 and the EU’s Carbon Removal Certification Framework (CRCF) become crucial. They’re creating the common language that lets carbon removal flow across borders with confidence.

The European Union’s CRCF is expected to roll out methodologies for DACCS and BECCS in 2026-27 and will establish common quality standards that make cross-border trade credible. Rather than each country developing its own verification systems, the CRCF creates a shared language for what constitutes a high-quality, permanent removal.

Second, we must advance developments in CO₂ transport and storage. Norway’s Northern Lights project, launching in 2025, will offer open-access storage services where CO₂ can be shipped from other countries and permanently stored in subsea geological formations. These “CO₂ hubs” function like international airports for carbon, creating shared infrastructure that multiple countries can access. With all the advantages mentioned, Canada is perfectly placed to develop world-class hub infrastructure.

Early market signals

Although small today, the market is accelerating. Durable carbon removal purchases reached about 8 million tonnes in 2024, with record growth in Q2 2025 driven by Microsoft’s multi-million-tonne commitments across DAC, BECCS, and mineralization. Such corporate buyers are providing the proactive capital and offtake agreements that make financing possible, while also setting pricing precedents.

On the public side, compliance-grade demand is emerging. Singapore’s carbon tax flexibility creates immediate market pull. Switzerland’s Article 6 bilateral agreements allow removals to count toward national commitments. Japan’s Joint Crediting Mechanism is working to recognize removals for national targets and build legal frameworks for cross-border CO₂ transactions.

Canada’s strategic position

Canada sits at the intersection of multiple advantages. The country has extensive geological storage capacity in both onshore and offshore sedimentary basins, developed oil and gas subsurface expertise that translates directly to CO₂ storage, existing pipeline infrastructure, a stable regulatory environment, abundant clean electricity potential, and a growing ecosystem of carbon removal companies.

What’s missing are key policy frameworks to turn these assets into exportable services:

• Article 6 readiness: Canada needs to establish federal authorization and registry processes so Canadian removal units can be “authorized” and exported with proper accounting adjustments. This mirrors what Switzerland and Japan have already implemented.
• Open-access infrastructure: Developing hub-and-spoke CO₂ networks with transparent access tariffs would allow multiple removal operators to share transport and storage infrastructure, reducing costs and risks.
• Develop international standards, or at least align them: The gold standard for an international industry would be internationally recognized standards, whether built by ISO or another organization, so each country doesn’t have to reinvent the wheel for measuring and reporting carbon removal technologies. However, absent true international harmonization, we must ensure Canadian measurement, reporting, and verification systems align with EU CRCF standards and leading international registries to maximize the fungibility of Canadian units in export markets.
• Indigenous partnership frameworks: Co-developing governance and benefit-sharing agreements with Indigenous communities for storage hubs and BECCS feedstock regions to de-risk projects socially and legally, which will be essential for long-lived infrastructure that must maintain public trust over decades.

The window is open, but not for long

The timing couldn’t be more critical. EU certification methodologies roll out in 2026-27, the UK’s revenue support models are still taking shape, and most international transactions remain one-off deals. There’s a narrow window where early movers can establish themselves before the market matures and competition intensifies.

Canada’s path forward isn’t complicated, but it requires coordination. Federal and provincial governments need to work together on Article 6 authorization procedures, build open-access storage infrastructure for domestic and international needs, and align our certification systems with emerging international standards.

The market signals are already flashing green. Microsoft is locking in multi-million-tonne contracts, Switzerland is actively buying removals from overseas, Singapore is accepting international credits against carbon taxes, and Norway is opening its storage infrastructure to the world.

The question is no longer whether durable carbon removal will become a global market. The question is who will lead it. Canada has the resources to be a supplier of choice and if we move quickly, we can capture billions in annual export revenue while helping the world close the climate gap. If we hesitate, others will define the market and take the lead.

By Daniel Kelter, September 2, 2025