During Climate Week NYC, experts highlighted how state-level initiatives across the United States are actively advancing policy and regulatory frameworks to scale the carbon dioxide removal (CDR) sector Panelists from the Sabin Center for Climate Change Law, American University, Rocky Mountain Institute, and California Ocean Science Trust examined structural mechanisms to move CDR technologies, including biocharBiochar is a carbon-rich material created from biomass decomposition in low-oxygen conditions. It has important applications in environmental remediation, soil improvement, agriculture, carbon sequestration, energy storage, and sustainable materials, promoting efficiency and reducing waste in various contexts while addressing climate change challenges. More, mineralization, and direct air capture, from early-stage development to full commercial deployment This state-driven momentum comes as subnational governments aim to maintain decarbonization trajectories and address emissions alongside nature-based and technological removal pathways.

Despite growing momentum, the broader carbon removal market faces severe structural supply deficits and regulatory uncertainties at the national level. According to the 2026 State of Carbon Dioxide Removal report, global carbon removal capacity currently reaches approximately 2.2 billion tonnes annually, leaving a projected annual supply gap of 1.2 billion tonnes by 2035 and 5.2 billion tonnes by 2050 relative to Paris-aligned targets. Furthermore, project developers struggle to scale novel CDR approaches due to a shortage of long-term off-take contracts, limited institutional demand, and variable federal support frameworks.

To bridge these market gaps, individual states are establishing distinct legal, financial, and market mechanisms to stimulate private capital and standardize project compliance. California has deployed dedicated funding through its Carbon Removal Innovation Support Program alongside competitive pre-commercial solicitation programs administered by the California Energy Commission. Washington State has embedded engineered carbon management into its legal framework through the Climate Commitment Act and Cap-and-Invest Program, allowing projects to generate offset credits provided the captured carbon meets a strict 1,000-year permanence threshold. Meanwhile, Massachusetts is establishing baseline environmental and economic parameters through state-backed comprehensive study initiatives evaluating coastal and marine CDR deployment.

These subnational policy deployments provide early-stage carbon removal developers with predictable regulatory pathways and regional demand drivers. By integrating rigorous monitoring, reporting, and permanence requirements into state procurement and compliance markets, local governments are establishing replicable frameworks for commercial off-take contracts. Consequently, these subnational legislative actions mitigate capital risks for project developers, offering a structural foundation to scale high-integrity removal projects and attract long-term institutional investment.