Learn how small and mid-sized businesses can leverage direct air capture supply agreements and 45Q tax credits to offset carbon costs while meeting corporate ESG commitments.
September 25, 2026
Direct air capture (DAC) technology has moved from experimental laboratory concept to a growing commercial reality, and it's creating new financial opportunities for small and mid-sized businesses. If you operate a facility with significant carbon footprint obligations or if corporate clients are demanding carbon offsets, you may be hearing more about direct air capture supply agreements and something called 45Q credit stacking. While these terms sound technical, they represent a practical pathway for SMBs to reduce their effective carbon costs while helping meet evolving climate commitments.
The fundamental idea is straightforward: DAC companies remove CO2 directly from the air, then either store it permanently or use it in products. The U.S. government, through the Inflation Reduction Act (IRA) passed in 2022, created substantial tax incentives to make this economically viable. For SMBs, this means there are now multiple revenue streams and cost-reduction strategies available if you're willing to engage with DAC operators and corporate carbon buyers.
The 45Q tax credit is the primary federal incentive driving DAC investment. Prior to the IRA, the credit was modest and was set to expire. Under the IRA, it was substantially expanded and locked in through 2032, with permanent provisions extending beyond that date.
As of 2024, the credit structure works like this: businesses that capture and permanently store CO2 through direct air capture can claim up to $180 per metric ton of CO2 captured and sequestered. If the captured CO2 is used in a product or process (sometimes called utilization), the credit is lower—around $130 per metric ton—but still meaningful. These numbers are indexed to inflation, which means they will increase annually, making early participation potentially more attractive than waiting.
There's an important wage requirement embedded in the IRA framework. To claim the full credit amount, captured CO2 must be processed by workers earning at least prevailing wages in their region. This requirement phases in over time, and there are provisions for projects that don't meet it, though at a reduced credit level. For SMBs engaged with established DAC operators, this is usually not a direct concern, but it affects the economics of the DAC projects themselves and thus the terms of supply agreements.
A DAC supply agreement is essentially a contract between your business and a DAC operator or a carbon procurement intermediary. In its simplest form, your company commits to purchasing captured and stored CO2 at a fixed or variable price over a specified period—typically five to ten years.
From an SMB perspective, this accomplishes several things simultaneously. First, it provides your business with verified, permanent carbon removal that can be credited toward your Scope 3 emissions reductions or your corporate sustainability goals. Second, it locks in a known cost for carbon removal, which can be easier to budget than volatile carbon offset markets. Third, and importantly, it helps DAC operators demonstrate offtake certainty, which makes their projects more attractive to investors and lenders.
The pricing in these agreements varies widely based on the technology maturity of the DAC operator, the location of the facility, the storage method, and market conditions. As of early 2024, reported prices for permanent geological storage ranged from $150 to $300 per metric ton, though this landscape is evolving rapidly as more capacity comes online.
For an SMB with annual emissions in the range of 1,000 to 10,000 metric tons, a supply agreement covering 5 to 10 percent of your emissions could represent a meaningful but manageable investment—potentially $50,000 to several hundred thousand dollars annually, depending on your scale and the negotiated rate.
Credit stacking refers to the practice of claiming multiple tax credits or incentives for the same unit of CO2 removal. This is where facility managers need to pay close attention, because the rules around what can and cannot be stacked have real financial implications.
Here's the key principle: The 45Q credit is designed to offset the cost of capturing and sequestering CO2. If a DAC operator is capturing CO2 and storing it, they are the entity that can claim the 45Q credit. However, there are scenarios where credit stacking becomes relevant for SMBs.
Consider a situation where your company operates an industrial process that produces concentrated CO2 as a byproduct—perhaps from a brewery, cement facility, or other manufacturing operation. If you capture that CO2 and sequester it, you can potentially claim a related 45Q credit for point-source capture. If you then purchase additional removal through a DAC supply agreement from a separate operator, that operator claims the 45Q credit for their direct air capture. The two credits do not overlap because they apply to different sources of CO2 removal.
However, if a single DAC operator is capturing air-based CO2 and your company is simply purchasing and claiming that removal through your carbon accounting, you cannot double-count the environmental benefit. The credit belongs to the operator who performed the removal. Your company's benefit is the verified carbon removal for ESG and climate commitment purposes.
Where credit stacking becomes more complex—and where many SMBs need specialized guidance—is when mixing different incentives. For example, some states offer their own carbon credit programs or utilization incentives that might apply to the same CO2 removed through a DAC supply agreement. State programs, federal credits, and corporate carbon purchase pricing can theoretically all apply, but the specific rules depend on the state, the technology pathway, and the exact contractual arrangement.
If your business is considering a DAC supply agreement, several practical factors should influence your decision. First, clarify your carbon accounting and reporting framework. If you're reporting under the Greenhouse Gas Protocol, for instance, purchased carbon removal typically counts toward Scope 3 emissions reductions. Understand whether your climate targets and ESG commitments actually require this type of permanent removal, or whether other carbon reduction strategies might be more cost-effective.
Second, evaluate the financial commitment in context of your overall emissions reduction strategy. DAC currently remains relatively expensive compared to operational efficiency upgrades or renewable energy procurement. A thoughtful approach might be to pursue high-ROI emissions reductions first, then use DAC supply agreements to address harder-to-decarbonize emissions that can't be addressed through other means.
Third, consider the contract terms carefully. Long-term supply agreements lock in pricing, which can be attractive if you expect carbon costs to rise. However, you should understand the bankruptcy and performance provisions of the DAC operator, the permanence guarantees of the storage method, and any pass-through of 45Q credit value. Some agreements allow the SMB to capture part of the benefit if 45Q credits are claimed; others keep that entirely with the DAC operator.
Finally, engage qualified advisors. The intersection of 45Q credit rules, state incentive programs, and corporate carbon purchase contracts is nuanced. An accountant familiar with energy credits and a carbon accounting specialist can help you structure an agreement that optimizes both the tax treatment and the ESG value.
The DAC supply agreement market is nascent but growing as major corporations commit to net-zero targets and DAC technology matures. For SMBs, the opportunity lies in engaging early, understanding the 45Q mechanics, and negotiating agreements that deliver both cost certainty and verified climate impact. The 45Q credit remains available through 2032 and permanent thereafter, giving this pathway stability that temporary carbon offset programs cannot match.
The combination of federal tax incentives, corporate demand for permanent carbon removal, and DAC cost reductions suggests that supply agreements will play an increasingly important role in facility carbon strategies. SMBs that understand how to navigate the credit stacking rules and negotiate favorable terms will be well-positioned to turn their emissions liabilities into manageable, tax-advantaged commitments.
If you're unsure whether a DAC supply agreement makes sense for your facility, consider running a diagnostic assessment that quantifies your emissions, maps your existing carbon cost obligations, and models the financial impact of different removal pathways. Climate Capital Systems' CCS Grant Engine is designed to help facility managers do exactly this—identify which decarbonization strategies, including DAC procurement, deliver the best return on investment for your specific situation.