Unlike many other carbon removal pathways, direct air capture is easy to measure.
Accordingly, the buzzy technology, which involves sucking air from the atmosphere and separating carbon dioxide molecules, has attracted attention from both the public and private sectors, from those angling to precisely measure emissions and removals, as they pursue fast-approaching climate goals.
The Department of Energy, for example, has designated $3.5 billion to four direct air capture hubs as it pursues its “Carbon Negative Shot” of bringing prices for removal down.
However, DAC’s footprint is still tiny. Just 27 DAC plants are in operation worldwide, capturing a total of 10,000 metric tons annually — far from the IPCC’s goal of up to 10 gigatons of removal by 2050.
While a handful more plants are scheduled to come online in 2024 and 2025, and there are more than a hundred projects in various stages of development around the world, DAC’s trajectory is fraught: it remains the most expensive form of carbon removal, tends to be extremely energy intensive, and is still in the early days of scaling.
That said, the market is evolving. A decade ago, the carbon removal landscape comprised just three companies — Global Thermostat, Climeworks, and Carbon Engineering — that are now considered the founding fathers of DAC. Today, those companies are building some of the world’s biggest DAC projects. But, according to Giana Amador, who leads the Carbon Removal Alliance, they are now joined by more than 200 smaller DAC companies, all targeting more efficient and cost-effective solutions.
“We have a strong cohort of new entrants,” Amador told Latitude Media. “I don’t think that’s a ding on any of the existing technologies. I think it’s very likely that in the future, the direct air capture technologies that win out are some combination of technical innovations and expertise from across the different companies.”
These startups, she added, are working to unstick the tech’s biggest bottlenecks, making it more energy efficient, cheaper, more competitive, and more easily manufactured. And while it’s still early days, those companies are already beginning to change the face of DAC.
A new generation of DAC
The term DAC is most often associated with the technologies and methods employed by the largest project developers, but it’s actually more of an umbrella encompassing a wide range of technology classes, explained Phil De Luna, chief carbon scientist and head of engineering at Canadian project developer Deep Sky.
Those tech classes are categorized by the type of sorbent used to capture carbon, and the process by which that sorbent is regenerated. There are liquid sorbents (which rely on a basic solution) and solid sorbents (which operate more like a filter). To regenerate solid sorbents, most approaches use heat or steam, while liquid sorbents are regenerated using chemicals.
“Ultimately, the chemical playground — or the chemistry that can be fine-tuned to separate carbon dioxide from air — is very wide. There are many different ways people are thinking about doing this, which makes it a very rich space,” De Luna said. “That’s why the technology set is so diverse, but that’s also why it’s interesting to see these different generations of direct air technologies come online. The innovation curve is very steep.”
As DAC matures, De Luna said there are essentially two generations of technologies: the first generation identified the challenges that the second generation is now working to solve.
“These are technologies that have a pathway to lower energy intensity than the first generation,” he said. At the same time, the newer entrants lack the longevity and experience of the original players. “There’s a lot to be said about momentum, and a lot to be said about establishment.”
Solving for bottlenecks
Among the hundreds of startups that have filed for DAC patents in recent years, many are focused on developing a business model that could make the tech more sustainable, and build up a carbon removal market that doesn’t rely solely on major corporate removal credit purchases.
Capture6, for example, uses a process that both produces freshwater and eliminates brine waste created by industrial processes. That means that some projects, like a recently announced deal to build a fully integrated water management and carbon removal facility at a desalination facility in South Korea, have multiple revenue streams.
Then there’s Los Angeles startup Avnos, whose “hybrid” DAC solution includes a moisture-responsive sorbent that doesn’t require heat, and which produces five tons of distilled water for every ton of carbon removed. Avnos licenses its tech to project developers and to industrial customers that need access to both water and carbon dioxide.
Mission Zero, a British DAC startup touting a “plug and play” DAC solution and using a liquid sorbent, is similarly eschewing the voluntary markets, and is instead commoditizing carbon dioxide as a gas stream for industrial users, such as for synthetic fuels and building materials. Mission Zero is also targeting the extremely high energy efficiency of under 800 kilowatt-hours per ton of removal for its electrochemical separation process.
While the wider carbon removal market already has large volumes of committed purchases from high-conviction buyers like Microsoft, for example, Mission Zero CEO Nicholas Chadwick said “a billion-dollar market yet it does not make. Carbon as an industrial input, however, is already a $10 billion market, Chadwick said.
“What we are doing is providing a CO2 generator, a source of CO2 from the atmosphere, converted to commodity-grade at the site where it’s required,” he said. That approach, Mission Zero hopes, will allow it to scale much more rapidly, and the company expects to be on par with or cheaper than traditional commodity sources by next year.
Amador, at the Carbon Removal Alliance, said these alternative business models are helpful in the short-term, but that it will be difficult to reach the 10-gigaton scale via these “side markets” alone.
“Without taking the climate piece into consideration,” she said, “I don’t think you can make a credible business case in the long term.”
On the tech side, DAC startups are experimenting with different, cheaper sorbents, modular designs, and other ways to reduce energy consumption, like using passive air contacting rather than fans.
Noya, for example, is leveraging the more traditional business model of selling removal to offtakers like Shopify, but says its modular, geography-agnostic approach will allow it to scale quickly and get cheap fast.
That includes using a sorbent made up of activated carbon, and off-the shelf fans, pumps, and compressors, said co-founder and CEO Josh Santos. Noya expects to reach the $100 per ton target between 2030 and 2035, Santos said.
Today, however, costs for most of these next-gen DAC approaches remain high — even for those developing solutions with lower energy needs and cheaper inputs. This is in large part because they’re still manufacturing and deploying at a very small scale.
Identifying the challenges
DAC broadly faces all of the classic market challenges of cost and scale.
Amador estimates the average cost is around $600 per ton, which is higher than other removal methods, and expensive for the voluntary carbon offset market. And the industry hasn’t yet reached economies of scale; manufacturing is hard and slow, most parts aren’t modular, and repairs are long and pricey.
But there are also a handful of challenges that have more to do with the tech itself.
One big one, De Luna said, is the lifetime of a company’s chosen sorbent, which affects everything from overall cost to deployment timelines and removal scale. There’s also the reality that seasonality and changes in temperature can have a major impact on how well a given system works.
Then there’s the energy intensity caveat. Most DAC companies need an immense amount of low-carbon heat or electricity, and in much of the world sourcing that power is difficult and time consuming. A lot of today’s smaller DAC companies haven’t yet reached the point of sourcing power on a commercial scale, De Luna said, but the more established companies are looking to sign power purchase agreements with renewable energy developers.
That process comes with another set of challenges, he added, because in many cases, a solar project needs to have come online within two years to meet the additionality requirements of some carbon removal registries.
(Image credit: International Energy Agency)
Many of these tech challenges are difficult to address in a lab, and deployment out in the field is the only way to identify them, said Charlotte Festa, director of product at Climeworks.
“This is where we see a big challenge for those smaller companies: to actually make the move from the lab stage to the field,” she explained. That deployment experience is what gives Climeworks its edge, she added. “Our objective was always to go out into the field as quickly as possible, and we’ve realized more and more that that’s extremely important.”
That, in some part, is how Climeworks sees its role in the evolving DAC market: alongside working to improve its own tech, simultaneously easing the path forward for the influx of startups, many of whom are struggling to get to field deployment. Doing that means bringing in the next wave of buyers, to meet the next wave of removal services, Festa said.
“We see it as our responsibility to help expand the market, and push for more offtakes for DAC and also beyond.”
The future of DAC
Ultimately, Amador said, DAC companies are in an uncomfortable position of trying to sell to a market that’s being built up around them. While the voluntary carbon removal market is growing, she added, federal procurement remains essential.
“Essentially what’s happening is they’re going to private sector investors and saying, we’re trying to raise seed funding, or Series A, and we don’t have any customers,” she added. “Even the existence of a market, even for companies who aren’t trying to sell a product yet, can be extremely catalytic.”
Today, it’s still too soon to tell which among the influx of DAC startups will succeed, and what the market will ultimately look like, Amador said.
“We’re still in a stage as an industry where it’s okay to fail,” she added. “We’re still very much in the innovate phase as opposed to the narrowing-and-scaling phase.” (That said, the market has already seen one major exit, with Occidental Petroleum’s $1.1 billion purchase of Carbon Engineering last summer.)
However, for the success of the industry as a whole, said Festa, it’s important that eager DAC startups don’t overpromise.
“There’s a lot of great innovation happening, but on the other hand I think something we also see is an increased tendency to promise very low costs very soon,” she said. By some estimates, DAC is not on track to reach its price goals, and could still cost up to $500 per ton by 2050.
“If we’re talking about trust, it’s not helpful to the industry as a whole if we make empty promises,” Festa said. “In the end, it will come down to public perception that decides on success versus failure, and that will determine the fate of direct air capture and also carbon removal as a whole.”
