Canada’s Carbon Removal Sector Runs at 98,250 Tonnes, Falls Short of Pace

Canada's operating carbon removal fleet can pull 98,250 tonnes of CO2 per year — roughly five per cent of the two million tonnes the country needs by 2030 to stay on track with its climate ambitions, according to a new report from Carbon Removal Canada.

The publication, titled "Tracking the Tonnes 2026", takes stock of the carbon dioxide removal (CDR) sector across the country. Its verdict is blunt: the technologies are still developing slowly, and closing the gap between built capacity and stated climate goals will require an investment of approximately $2.2 billion.

What does the inventory actually show?

The report counts 16 operating projects spread across six provinces. Behind them sits a larger pipeline: 38 projects at earlier stages, representing nearly 12 million tonnes of annual capacity and an estimated $9 billion in investment.

That split matters. Announced capacity is not built capacity, and the report keeps the two firmly separate. The 98,250 tonnes that exist today are the sector's entire delivered output; the 12 million tonnes in the pipeline depend on permits, financing and policy decisions that have not yet landed.

The $2.2 billion required to close the gap is, in context, a modest ask. Carbon Removal Canada notes it amounts to less than half a per cent of the $500 billion Canadian financial institutions have already committed to critical sectors.

The money, in short, is not the binding constraint. The follow-through is.

What is holding the sector back?

The report identifies three critical gaps: capacity, funding, and an uneven policy landscape. The third is the one doing the most damage.

In a letter included in the report, Co-Founder and Executive Director Na'im Merchant notes that Canada is currently attracting high levels of interest from domestic and global investors, who are backing infrastructure, energy and resource projects. Amid that momentum, he writes, the carbon removal sector is making too little progress on policy and investment, and risks falling behind.

The comparison with peers sharpens the point. The report states that the European Union, Germany and the United Kingdom are all moving faster than Canada to build long-term demand for carbon removal — the demand signal that turns pipeline projects into steel in the ground.

Canada has the investor interest. What it lacks is the policy architecture to convert it.

Where does the industrial logic sit?

Merchant argues that CDR solutions in Canada can be integrated into industries the economy already depends on — forestry, mining, steel, agriculture and energy. The removal capacity, in other words, does not require a new industrial base. It attaches to an existing one.

He frames the export case directly: "As trading partners in Europe, and increasingly Asia, begin to price the carbon in the goods they import, a Canadian mine, mill or plant that removes and stores carbon has a cleaner product to sell and a new revenue stream that doesn't depend on any single market."

That is a market argument, not a moral one. Carbon border measures abroad could turn Canadian removal capacity into a product feature. The sector's commercial future may be decided in Brussels and Tokyo as much as in Ottawa.

The report also arrives alongside related developments in the Canadian CDR space. Canada has recently opened the door to international carbon markets as part of a push to build its carbon removal industry, and Frontier and Carbon Removal Canada have launched what they describe as the world's first surficial mineralization hub.

What decides what happens next?

The numbers frame the decision. Sixteen projects deliver 98,250 tonnes a year. Thirty-eight more promise 12 million. Two billion dollars separates ambition from inventory, against a 2030 deadline that does not move.

The milestone to watch is policy: whether Canada builds the long-term demand mechanisms its peers are already constructing, or watches the pipeline stay a pipeline.