Carbon dioxide removal (CDR) was supposed to be America’s next big climate tech win. The carbon removal industry — which includes a host of nature-based and engineered technologies that remove carbon dioxide from the atmosphere — has grown rapidly over the past decade. As policy shifts dramatically under the Trump administration, the industry can still hang on — the winnings may just land in other places.

Over the past several years, the United States has emerged as a leading backer of carbon removal, pushing the industry forward while capturing a meaningful competitive edge in the form of good jobs, intellectual property, and economic development. But since January, funding has slowed, federal momentum has flatlined, and major players in the industry are facing rounds of layoffs. Headlines like “It Could Be a $250 Billion Market, But Almost No One Is Interested” aren’t exactly rallying investor confidence.

This isn’t to say the industry is collapsing. Tech giants like Microsoft and Frontier continue to announce major purchases in 2025. These early purchasers have been clear that their role is to stimulate demand, not to shoulder the entire market burden. Still, Microsoft accounts for 35% of all carbon removal purchases — and that figure jumps to 76% when excluding nature-based solutions.

Without government support, the path to scaling carbon removal technologies becomes increasingly difficult.

However, this isn’t an industry that we can afford to lose with a change in political current. There is no path to addressing the impacts of climate change without carbon removal.

So how does this sector navigate the next four years of the Trump administration?

The playbook for survival

The carbon removal industry still has viable pathways forward:

Strong, strategic industrial partnerships. Groups like the Carbon Removal Alliance and RMI are showing how CDR can integrate with existing infrastructure, from cement to mining to waste treatment. By forming partnerships with major industrial players, carbon removal companies can create value from byproducts while delivering climate benefits. Vaulted Deep, for example, considers itself a waste management company, taking organic waste that would otherwise decompose and sequestering it underground.

Integrating these industrial processes and end-uses doesn’t only deliver climate benefits — it helps cut costs and create new value streams for industrial players to sell in the voluntary carbon market. Just look at Ebb Carbon and Capture6, companies that have developed technologies that integrate with wastewater treatment and desalination facilities to deliver removals and address problematic byproducts like brine.

States need to step up. When the federal government stalls, the real policy action shifts to the states. The carbon removal “map” of the U.S. is a patchwork of opportunity with a few states stepping up to own it.

Colorado’s new Carbon Management Roadmap lays out a playbook for becoming a leader in CDR, capturing project development and economic activity through carbon management zones, incentives, and streamlined regulations.

California integrated direct air capture into its low carbon fuel standard years ago. This year, legislators proposed a $50 million procurement program, picking up what the federal government has dropped.

While these steps are in the right direction, states will need to make larger commitments and supportive policy frameworks to make a serious market impact. States have a chance to capitalize on the economic and environmental benefits of the growing CDR industry — if they can support it on a similar scale to Frontier and Microsoft.

The global picture is evolving

The rest of the world isn’t waiting, as CDR continues to scale globally. As the United States hesitates, U.S. intellectual property is relocating to countries with more consistent policy, stronger compliance markets, and better bankability. For example, Equatic, a company launched out of UCLA, is building the world’s largest ocean carbon dioxide removal facility in Singapore.

Canada announced a $10 million commitment toward carbon removal purchases in February. While that’s an important market signal, we’re going to need more countries to follow suit (and at a much larger scale) to really create meaningful demand.

There are other signs of hope internationally. Denmark and Switzerland are dedicating meaningful funds to spur demand for carbon removal. And Japan’s emissions trading scheme is expected to become Asia’s second largest, with a clear role for carbon removal.

It isn’t just nation states. The airline industry is building carbon removal into CORSIA, its market-based mechanism designed to reduce emissions. CDR demand from the aviation sector could reach 400 million tonnes per year by 2050. These government and industry actions are demonstrating long-term commitment to carbon removal — providing the certainty that CDR companies and investors need to push solutions forward

By contrast, the U.S. is ceding the field at the worst possible time. Not because we lack the tech, but because we lack the political will. The result is that we risk giving away an industry with massive long-term value, job creation, and economic benefits to Europe and Asia.

The Trump administration should be supporting CDR, not just by preserving 45Q, the carbon capture tax credit that includes direct air capture projects, but by actively working to expand it as part of the reconciliation package currently at the Senate’s doorstep. This isn’t just about climate. It’s about competitiveness.

Carbon removal remains an essential component of our climate response. The question now is who will lead its development — and capture the resulting benefits — in the years ahead.