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Direct Air Capture

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In this report

There are currently 19 direct air capture (DAC) plants operating worldwide, capturing more than 0.01 Mt CO2/year, and a 1Mt CO2/year capture plant is in advanced development in the United States. The latest plant to come online, in September 2021, is capturing 4 kt CO2/year for storage in basalt formations in Iceland. In the Net Zero Emissions by 2050 Scenario, DAC is scaled up to capture more than 85 Mt CO2/year by 2030 and ~980 Mt CO2/year by 2050. This level of deployment will require several more large-scale demonstrations to refine the technology and reduce capture costs.

CO2 capture by direct air capture in the Net Zero Scenario, 2020-2030

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Tracking progress

Direct air capture (DAC) technologies extract CO2 directly from the atmosphere. The CO2 can be permanently stored in deep geological formations (thereby achieving negative emissions or carbon removal) or it can be used, for example in food processing or combined with hydrogen to produce synthetic fuels.  

Today, two technology approaches are being used to capture CO2 from the air: liquid and solid DAC. Liquid systems pass air through chemical solutions (e.g. a hydroxide solution), which removes the CO2. The system reintegrates the chemicals back into the process by applying high-temperature heat while returning the rest of the air to the environment. 

Solid DAC technology makes use of solid sorbent filters that chemically bind with CO2. When the filters are heated and placed under a vacuum, they release the concentrated CO2, which is then captured for storage or use.

Most large-scale opportunities to use the captured CO2 would result in its rerelease into the atmosphere, such as when synthetic fuel is burned. This would not create negative emissions but could still generate climate benefits, for example if synthetic fuels replace conventional fossil fuels.

In a transition to net zero emissions, however, the CO2 used to produce synthetic fuels would increasingly need to be captured from sustainable bioenergy sources or from the atmosphere to avoid delayed emissions from fossil-based CO2 when the fuel is combusted. 

Direct air capture is one of few technology options available to remove CO2 from the atmosphere. Carbon removal is expected to be key in the transition to a net zero energy system in which the amount of CO2 released into the atmosphere is equivalent to the amount being removed. Because certain sectors such as aviation and heavy industry are difficult to decarbonise, carbon removal technologies can offset their emissions and support a faster transition. 

Other carbon removal options 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).  

Some benefits of DAC as a carbon removal option include its limited land and water footprint and the viability of locating plants on non-arable land close to suitable storage, eliminating the need for long-distance CO2 transport. 

The choice of location also needs to be based on the energy source needed to run the plant. The energy used to capture the CO2 will determine how net-negative the system is and can also be a significant determinant of the cost per tonne of CO2 captured. For instance, both solid and liquid capture technologies could be fuelled by renewable energy sources, while recovered low-grade waste heat could power a solid DAC system. 

The CO2 in the atmosphere is much more dilute than in, for example, flue gas from a power station or a cement plant. This contributes to DAC’s higher energy needs and cost relative to other CO2 capture technologies and applications.

Costs and energy needs vary according to the type of technology and whether the captured CO2 is going to be geologically stored or used immediately at low pressure. In fact, CO2 needs to be compressed under very high pressure for it to be injected into geological formations. This step increases both the plant’s capital costs (due to the requirement for additional equipment such as a compressor) and operating expenses (to run the compressor).

Direct air capture energy needs by technology and CO2 destination (large-scale applications), 2021

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As the technology has yet to be demonstrated at large scale, the future cost of DAC is uncertain. Capture cost estimates are wide-ranging, from USD 100/t to USD 1 000/t. In 2018 Carbon Engineering released peer-reviewed research showing that capture costs of USD 94/t to USD 232/t were achievable depending on financial assumptions, energy costs and specific plant configuration.

Nineteen DAC plants are currently operational in Europe, the United States and Canada. Most of these plants are small and sell the captured CO2 for use – for carbonating drinks, for example. 

The first large-scale DAC plant is now being developed in the United States through a Carbon Engineering and Occidental Petroleum partnership. The plant will capture up to 1 Mt CO2 each year and could become operational as early as 2024. 

A plant of this size would be eligible for the 45Q tax credit (providing USD 35 per tonne of CO2 used in enhanced oil recovery and USD 50 per tonne of CO2 stored). Moreover, it could also be eligible for the California Low Carbon Fuel Standard credit if the CO2 is used to produce low-carbon transportation fuels. These credits traded at ~USD 200/tCO2 in 2020.  

In Iceland, Climeworks and CarbFix are currently capturing CO2 from the atmosphere and blending it with CO2 captured from geothermal fluids for injection and underground storage in basalt rock formations. This is the first operating application of this type, turning CO2 into rock within 23 years through mineralisation. The plant has just been expanded to capture 4 000 tCO2/year, making Orca the largest DAC plant removing CO2 from the atmosphere. On a nearby site, CarbFix intends to build a CO2 mineral storage terminal able to store CO2 received from a number of customers in Northern Europe.  

Greater attention and backing for DAC is coming from both the private and public sectors. The voluntary market for DAC-based CO2 removal has expanded, with companies such as MicrosoftStripeShopify and Swiss Re purchasing future DAC removal to offset their CO2 emissions.  

Some of these agreements are hybrid, wherein the company purchasing the offsets is effectively supporting the capital investment to build the DAC plant that is eventually going to capture CO2 from the atmosphere. For instance, United Airlines is directly investing in DAC in line with its commitment to become carbon neutral by 2050, while Microsoft is purchasing DAC removal from Climeworks and, through its climate innovation fund, is also investing in Orca, the largest operating DAC plant for carbon removal. 

On a smaller scale, some DAC companies are currently offering commercial offset services, to individuals as well as companies willing to pay a recurring subscription to have CO2 removed from the atmosphere and stored underground on their behalf. The price of the subscription varies (depending on the amount of removal purchased) from USD 600/tCO2 to USD 1 000/tCO2

Further support for DAC has come from programmes such as X-Prize (offering up to USD 100 million for as many as four promising carbon removal proposals, including DAC) and Breakthrough Energy’s Catalyst Program (which raises money from philanthropists, governments and companies to invest in critical decarbonisation technologies, including DAC). Private investment rounds have also been successful: in 2020 Climeworks raised the largest-ever DAC investment, equivalent to USD 110 million.  

Increased public funding is also available for DAC deployment. In the United States, the Department of Energy announced financing specifically for DAC in March 2020 (USD 22 million) and March 2021 (USD 24 million). Furthermore, almost USD 9 billion in CCUS support was included in the USD 1 trillion Infrastructure Investment and Jobs Act passed by the Senate in August 2021. This includes funding to establish four DAC hubs. There are a number of proposals to increase the value of the 45Q tax credit, including in the 2022 budget proposal that would provide USD 85 per tonne of CO2 captured and stored from some industrial applications and USD 120 per tonne for direct air capture with storage. In the United Kingdom, the government announced funds of GBP 100 million (~USD 123 million) in June 2020 for carbon dioxide removal.  

The improved investment environment led to announcements of several new DAC projects in 2021, including the Storegga Dreamcatcher Project (United Kingdom; aiming at carbon removal) and the HIF Haru Oni eFuels Pilot Plant (Chile; producing synthetic fuels from electrolysis-based hydrogen and air-captured CO2 from Global Thermostat's DAC technology). Synthetic fuels (up to 3 million litres) will also be produced by the Norsk e-Fuel AS consortium in Norway by 2024, including with CO2 captured from DAC. 

Carbon removal technologies such as DAC are not an alternative to cutting emissions or an excuse for delayed action, but they can be an important part of the suite of technology options used to achieve climate goals. 

For this reason, DAC needs to be demonstrated at scale, sooner rather than later, to reduce uncertainties regarding future deployment potential and costs, and to ensure that these technologies can be available to support the transition to net zero emissions and beyond. 

In the near term, large-scale demonstration of DAC technologies will require targeted government support, including through grants, tax credits and public procurement of CO2 removal. Technology deployment may also benefit from corporate sector initiatives and pledges to become carbon-negative through the voluntary market.  

Longer-term deployment opportunities will be closely linked to robust CO2 pricing mechanisms and accounting frameworks that recognise and value the negative emissions associated with storing CO2 captured from the atmosphere. 

Acknowledgements
  • Christoph Beuttler, Climeworks  
  • Geoff Holmes, Carbon Engineering 
  • Ronald Chance, Global Thermostat 

Analysis