Why Banks Are Becoming Anchor Buyers for Durable CDR

For years, tech giants like Microsoft and Google have carried the carbon removal market on their backs. Now, a new type of buyer is stepping up, and it could reshape how the industry scales. TD Bank's recent 10-year deal with Charm Industrial for 44,000 metric tons of durable carbon removal signals something bigger than a single transaction.

Here's what makes this interesting: TD Bank isn't new to carbon credits. Just two months ago, in November 2025, the bank signed a multi-year deal with Chestnut Carbon for Improved Forest Management (IFM) credits, a nature-based solution. Now they're committing to bio-oil sequestration and biochar, which is engineered, durable carbon removal. That's a meaningful upgrade.

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The Durability Problem With Traditional Offsets

Not all carbon removal is created equal. Traditional nature-based credits, like forest conservation, face a fundamental challenge: permanence. Trees can burn. Soil carbon can be re-released. The 2023 Canadian wildfire season alone torched 18.5 million hectares, releasing stored carbon back into the atmosphere.

Durable removal technologies work differently. Bio-oil injected underground stays locked away for thousands of years. Biochar applied to soil remains stable for centuries. Companies buying removal credits increasingly want that kind of guarantee, which is why Oxford Category 5 credits command premium prices.

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Why This Matters for Market Diversification

The carbon removal market has a concentration problem. Microsoft alone accounts for roughly 50 million tonnes in total commitments and drove an estimated $2 to $4 billion in CDR agreements in early 2025. That's incredible for market development, but it's also a vulnerability. No industry can scale sustainably when one buyer dominates.

Financial institutions entering as anchor buyers changes the math. Banks operate on different timelines and motivations than tech companies. They bring stability, credibility, and the potential to channel client capital toward CDR as a new asset class. TD Securities has already indicated plans to provide clients access to carbon credits through its Sustainable Finance platform.

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TD Bank's Carbon Strategy Evolution

TD Bank's two recent deals tell a clear story of portfolio diversification:

1. November 2025: Multi-year deal with Chestnut Carbon for IFM credits from U.S. forests across 37 states
2. January 2026: 10-year agreement with Charm Industrial for 44,000 tonnes of bio-oil and biochar removal starting in 2029

This isn't an either/or situation. The bank is building a diversified carbon removal portfolio, much like how Google contracted over $100 million across multiple CDR pathways in 2024. But the progression from nature-based to engineered removal shows increasing sophistication in how financial institutions approach carbon markets.

What This Means for Canada's CDR Market

A portion of TD Bank's credits will come from Charm's future Canadian operations, marking the company's first expansion north of the border. This creates a domestic buyer-supplier relationship that could anchor Canada's emerging CDR industry.

Charm sees opportunity in addressing multiple problems at once: converting wildfire fuel into permanent carbon storage while repurposing orphaned oil wells for bio-oil injection. For a Canadian bank, backing CDR that also tackles domestic wildfire risk and legacy infrastructure cleanup offers tangible, visible impact beyond emissions accounting.

>> RELATED: How Charm Industrial Uses Manufacturo to Turn Biomass Into Measurable Carbon Removal

The Bigger Picture

In 2024, biochar accounted for 86% of all CDR purchases by volume. Roughly 50% of H1 2025 buyers were first-timers. The buyer base is diversifying, and financial institutions are part of that wave.

TD Bank's progression from forest credits to engineered removal isn't just one company's climate strategy. It's a signal that carbon removal is maturing as an asset class. When banks start treating durable CDR seriously, the industry gets closer to the scale it needs.