Avnos, the global leader developing novel Hybrid Direct Air Capture (HDAC™) systems that capture CO2 while producing clean water, today issued its 2026 market outlook, highlighting accelerating demand from data centers, industrial hubs, fuel producers, and other sectors.

Despite recent industry headwinds, the outlook builds on a landmark 2025 defined by technical and commercial progress, as the market shifts toward carbon-removal solutions with proven performance and near-term deployment potential.

Data centers driving carbon removal demand

Hyperscalers face unprecedented pressure to expand AI capacity while reducing emissions and conserving water. BloombergNEF predicts 106 GW of U.S. data center power demand by 2035 - up 36% from its previous forecast in April 2025. Larger data centers can require up to 5 million gallons of water per day - roughly 1.8 billion gallons a year, according to the Environmental and Energy Study Institute, intensifying the search for solutions that ease both energy and water demands

Operators are increasingly evaluating technologies that can be deployed directly alongside existing infrastructure, creating new opportunities for integrated carbon removal systems.

Avnos’ HDAC technology is engineered for low-temperature, low-energy operation through a unique combination of moisture-swing regeneration and atmospheric water extraction. Designed specifically for data center integration, this hybrid architecture:

• Utilizes low-grade waste heat, to reduce both data center and HDAC electrical demand
• Produces clean cooling water
• Improves thermal management by redistributing heat across the system
• Cuts total energy use by more than 50% compared to heat-based DAC
• Leverages opportunistic electrical load to improve operational resilience.

“AI infrastructure is expanding at a pace traditional systems simply weren’t designed for,” said Will Kain, CEO of Avnos. “To keep growing responsibly, data centers need technologies that cut energy use, strengthen water resilience, and integrate seamlessly with what’s already on the ground. That’s exactly where HDAC delivers.”

Rising corporate demand for durable carbon removal

Avnos also projects 2026 to be a pivotal year for HDAC as organizations face rising decarbonization obligations and seek durable, verifiable carbon-removal solutions. Recent market data shows rapid acceleration in global demand: durable carbon-removal purchases increased from 8 million tons in 2024 to 25 million tons in 2025, while supply remains limited, and more than $10 billion has already been committed through spot purchases and long-term offtakes.

The widening gap between demand and supply is pushing buyers toward technologies with measurable performance, lower energy needs, and credible pathways to scale. Key signals supporting HDAC adoption include:

• Rising demand for durable, measurement-based carbon removal
• Strong interest from industrial and fuel producers requiring high-purity CO2
• Growing emphasis on co-benefits such as water production and heat recovery.

“The market for durable carbon removal is accelerating, driven by rapid data center growth, industrial decarbonization, and rising resource constraints,” said Kain. “As a result, organizations are increasingly demanding solutions that deliver verified performance, lower energy use, and real deployment pathways.”

Avnos’ 2025 milestones toward commercial deployment

Backed by more than $100 million in public and private funding from partners including Shell, Mitsubishi Corporation, the U.S. Navy’s Office of Naval Research, the U.S. Department of Energy, and NextEra Energy Resources, Avnos is strengthening its position as a leader in next-generation carbon removal. Investors are prioritizing technologies with real hardware, credible economics, and clear deployment pathways — areas where HDAC is demonstrating measurable progress in the field.

This momentum is reflected in meaningful technical and commercial advances across Avnos’ project portfolio:

• Project Cedar (U.S. location to be announced) — Up to $17 million in project financing from Shell and Mitsubishi to build Avnos’ first commercial-scale HDAC facility; coming online late 2026.
• Project Brighton (Bridgewater, New Jersey) — Advanced demonstration hub with the U.S. Navy’s Office of Naval Research; opening in early 2026.
• Project Alpine (Bakersfield, California) — One of the longest-running DAC pilots in the United States, backed by the U.S. Department of Energy, continuing to inform next-generation system design.
• Avnos’ HDAC Technology Development Center (Bridgewater, New Jersey) — Expanded in 2025 to increase testing throughput and accelerate HDAC system iteration.

“With commercial-scale projects advancing and HDAC being proven in the field, Avnos is starting 2026 in a strong position to meet this demand,” Kain said. “Hybrid DAC’s ability to cut energy loads, generate clean water, and produce high-purity CO2 makes it one of the most compelling technologies for customers planning the next generation of infrastructure.”

“It’s compelling that Avnos’ original thesis that water consumption matters is now resonating with AI and data center operators - the fastest-growing infrastructure markets in the world,” said Jim McDermott, Managing Partner at Rusheen Capital Management. “By saving HDAC operators money and delivering durable carbon removal as a powerful free benefit, Avnos is turning the traditional carbon model on its head. There is nothing more powerful than aligning the economics of saving money with carbon removal.”

About Avnos

Integrating water at the heart of its technology, Avnos is rewriting the water–energy equation to scale Direct Air Capture (DAC) economically, responsibly, and sustainably. Its novel Hybrid Direct Air Capture (HDAC™) technology generates clean water as it captures CO2 and eliminates the need for external heat input, resulting in the most resource-efficient, geographically flexible, and cost-effective approach to DAC at scale.

Avnos is advancing multi-million-dollar projects with Shell, Mitsubishi Corporation, the Office of Naval Research, and the U.S. Department of Energy, demonstrating HDAC’s potential to deliver scalable, revenue-generating carbon removal solutions across multiple industries, including data centers, fuels, and industrial applications.

Learn more at www.avnos.com.

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Avnos’ 2026 outlook points to accelerating demand for Hybrid Direct Air Capture driven by AI data center growth.