Summary

Direct air capture (DAC) technologies remove carbon dioxide directly from the air. The CO2 can be stored permanently in rocks (achieving negative emissions or carbon removal) or for use, in things like food processing or combined with hydrogen to produce synthetic fuels. There are two main DAC approaches: liquid and solid. Liquid systems pass air through chemical solutions to remove the CO2 and solid DAC places solid sorbent filters that chemically bind with CO2 under high-heat and in a vacuum to release and capture concentrated CO2. DAC isn’t necessarily a negative emissions technology as the captured CO2 can be used and re-released in the atmosphere as with the production of synthetic fuels.

Viability (4)

19  plants operating worldwide at small scale (capturing 0.01 Mt CO2/year) mainly selling CO2 rather than storing it. The first large scale plant capturing 1Mt CO2/year in the US will be operational by 2024. Iceland is leading on storage with plants scaling up to 4,000 tCO2/year. Carbon removal by storing in rocks is more expensive than DAC plants set up to sell CO2. Commercially viability relies on the price of carbon and costs, pilot-scale systems are operating in the US$300-600 per ton range today, estimates are that with scale this can fall to US$100 per ton.

Drivers (5)

The need to decrease global carbon emissions by 45% by 2030 and to reach net zero by 2050. DAC and bioenergy with carbon capture and storage (BECCS) are today the only viable  carbon removal technologies that can be used to offset emissions that will take longer to decarbonise. Attention has increased with Microsoft, Stripe, Shopify and Swiss Re recently purchasing future DAC removal to offset their CO2 emissions. Some of these offsets include funding for the DAC plant itself reducing the upfront cost for the DAC operator.

Novelty (5)

Alternatives to remove carbon from the air include nature-based solutions (e.g. afforestation, reforestation, and restoration of coastal and marine habitats), measures to enhance naturally occurring processes (e.g. land management approaches to increase the carbon content in soil, biochar) and other technology-based solutions such as bioenergy with carbon capture and storage (BECCS). DAC is expensive versus Carbon Capture, Utilisation & Storage and BECCS because CO2 is more dilute in the air than flue gas from a gas or cement plant. But DAC is inherently more scalable as it’s not limited by land or source material.

Diffusion (3)

DAC is appealing because it require no behaviour or supply chain changes. Industry can continue to burn fossil fuels and very slowly move to renewables when costs are comparable. Adoption is almost exclusively down to cost at large scales and the price of carbon. Capture cost estimates are wide-ranging, from USD 100/t to USD 1 000/t. Research suggests capture costs of USD 94/t to USD 232/t were achievable depending on financial, energy costs and specific plant configuration. The need to adopt fast is huge but building plants takes years and price is uncertain making investment risky. A growing range of applications for captured CO2 especially chemical approaches that make use of either liquid solvents or solid sorbents will drive up demand.

Impact (5) High certainty

A high impact scenario is predicated on the fact DAC is fundamental to getting close to 2 degrees of warming. Unlike other carbon removal technologies, DAC is scalable and has the potential to move down the learning and cost curve quickly. The DAC market is highly dependent on the price of carbon which is hard to predict, but assuming something in the order of $100USD/ton and 0.5-5bn tons of CO2 captured each year, the market can reach up to $500bn a year.

Timing (2025-2030) Low certainty

3 major players - Climeworks, Global Thermostat and Carbon Engineering - all scaling up operations over the next few years. Costs will fall quickly with Global Thermostat claiming costs of US$150/tCO and Carbon Engineering planning to scale operations to remove 1mtCO2/year. The US Bipartisan Infrastructure Law (BIL) includes the Carbon Negative Shot initiative centered on deploying carbon capture technologies on a gigaton scale by 2050, by driving down the cost of carbon capture and storage to $100 per ton. The profitability and the development of a competitive market depends in the next few years on the price of carbon and subsidies which are challenging to predict.