In 2023, a ton of direct air capture would cost you over $700.
While that represented an improvement over previous years, it was still far from the Department of Energy’s “Carbon Negative Shot” goal of $100 per ton for carbon removal in the next decade. Broadly speaking, DAC’s immense energy needs have enshrined it as the priciest carbon removal pathway.
But today, Google said it has landed on a procurement strategy that allows it to ink deals that meet that goal price per ton — an enormous leap compared with the progress of previous years, one that is thanks mostly to a new deal structure.
- The top line: Google has purchased 100,000 tons of carbon removal and storage from Tennessee-based direct air capture company Holocene for delivery by 2032. The deal, Google said, features the lowest price on record for DAC removal credits — $100 per ton.
- How it’s getting done: That low price per ton is made possible in part by the fact that Google is shelling out a large portion of the payment up front, the company said. But it’s also enabled by the 45Q tax credit, resulting from the Inflation Reduction Act. Holocene believes its projects will qualify for the valuable credit, which provides up to $180 per metric ton of removed and stored carbon dioxide.
- The skeptical take: Holocene has yet to remove carbon at anywhere near the scale of the Google deal. None of the facilities that will eventually remove those tons are yet online; the company just unveiled its first pilot plant, which will remove ten tons each year, in May. And 100,000 tons of DAC is highly ambitious. For context, Frontier is expecting delivery of around that amount in total DAC removal by 2030.
Google’s attempts to bring down the cost of CDR is a familiar one. In the still-nascent voluntary carbon removal market, tech companies have taken the lead in making early purchases. As of today, the Frontier coalition — of which Google parent Alphabet is a member — has contracted the removal of nearly 600,000 tons, and has another nearly $700,000 to spend.
But even as corporations have signed increasingly large deals and the federal government has begun wading into its own procurement plans, services remain expensive and demand remains unclear. Even companies with much cheaper approaches to CDR, like biomass carbon removal, are still struggling to find their feet, as evidenced by the recent failure of the startup Running Tide.
DAC, which involves sucking air from the atmosphere and separating carbon dioxide molecules, is the chosen pathway pursued by some of the industry’s most well-known companies, like Climeworks and Heirloom. And perhaps consequently, it has garnered attention from both the public and private sectors in recent months.
For example, DOE has designated several billion dollars for so-called DAC hubs, and late last year DAC forefather Climeworks announced plans to bring one million tons of capacity to Canada by 2030.
But the technology still faces some steep challenges, and has yet to reach real scale. And despite the market support, the pathway’s extreme energy needs are now coming up against those of the booming data center industry as both grapple for access to clean electricity. (Last week, DAC developer Carbon Capture said it was being forced to relocate Project Bison, a large facility originally planned in Wyoming, because of “growing competition for clean power” in the region.)
The Holocene approach
Holocene’s approach to DAC stems from technology developed at DOE’s Oak Ridge National Laboratory. The company’s founder, Anca Timofte, formerly worked at Climeworks and participated in DOE’s Lab-Embedded Entrepreneurship Program.
Randy Spock, who leads Google’s carbon credits and removals team, said the removal chemistry that Holocene uses means that costs will come down “significantly over time.”
Holocene’s regeneration process (meaning how the sorbent, used to trap carbon dioxide, is regenerated and reused) is heat-driven, rather than electrically driven. According to the company, that leads to significantly lower costs
The process also uses relatively low temperatures compared to other approaches. That low-temperature heat can be sourced from carbon-free or waste heat sources, offering another cost-saving opportunity.
The company’s current scale is indeed small, but Holocene hopes that its approach — which also includes using already-commercialized, off-the-shelf equipment — will scale quickly, and enable the removal of up to 1 million tons of carbon dioxide per year by the end of the decade.
