Diverse business model strategies of European Carbon Removal startups
European startups in the carbon dioxide removal (CDR) sector encounter multiple challenges in adopting the traditional business model of generating and selling CDR credits in the Voluntary Carbon Market (VCM). Traditional models require vertical integration across activities like monitoring and storage infrastructure, while lacking B2B characteristics and benefits of clearly defined value propositions and associated customer segments. An explorative survey of 69 European CDR startups, supplemented by follow-up interviews, reveals a shift towards diversified business models in response to these challenges. In a simplified framework, three alternative business models can be conceptualized as deviations from the traditional business model: the insetting business model, the product business model, and the asset business model.
These alternative models allow startups to leverage their technological strengths while navigating the CDR market's early-stage challenges, ultimately facilitating specialization and a maturing industry. Startups are increasingly adopting business models with more distinct B2B characteristics, intentionally targeting more defined customer segments and clearer value propositions to facilitate repeatability and increase efficiency. Successfully navigating alternative business models in the CDR market demands flexibility, resilience, and a strong commitment to brand identity and value integrity. Startups that adapt pragmatically to current challenges while positioning themselves for future opportunities are better poised for long-term success as the market matures.
This report has been created in collaboration with remove. remove is Europe’s premier non-profit accelerator program designed to support early-stage CDR startups. The remove team has worked with European CDR founders since 2021, connecting them with relevant ecosystem stakeholders, addressing individual challenges on their entrepreneurial journey, and providing non-dilutive funding through a two-stage accelerator program. In their role as the core partner of remove, sus.lab shapes the program with thought leadership and ecosystem development.
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