Trapping CO2 from the air is a costly bet to beat climate change — but money is flowing in anyway

Large corporations and governments are pumping billions into the technology decades away from maturity. How money should be split between emissions reductions today and carbon removal down the road is a fine balancing act, experts say.

Climeworks Orca plant
World largest direct air capture plant in Iceland, built by Swiss firm Climeworks. Image: Climeworks.

Sieving carbon dioxide from the skies to fight climate change is still just hot air based on today’s numbers.

The 19 direct air capture (DAC) plants globally capture 10,000 tonnes of carbon dioxide in a year, according to the International Energy Agency (IEA). That is the same amount the United States emits in about a minute.

The facilities don’t run cheap either. Sequestering carbon at the largest DAC plant in the world, situated in Iceland with a capacity of 4,000 tonnes of CO₂ a year, costs US$600-800 per tonne, making it one of the world’s most expensive climate solutions.

Still, there are those rooting for the technology. Last month, Swiss firm Climeworks, which runs the Iceland plant, raised US$650 million to expand its work from investors, including insurance giant Swiss Re and Singapore’s sovereign wealth fund, GIC. It has plans for a 40,000-tonne plant in about two years, and a 400,000 tonne facility by 2028.

“There will be many opportunities coming in,” said Celine Olesen, a sales manager at Climeworks.

It’s no blip – large funders are pumping money into DAC technology.

Canadian firm Carbon Engineering secured US$68 million in 2019 to work on a similar technology, and is currently part of two projects to build DAC plants that will capture up to a million tonnes of CO₂ a year each, in the United States and United Kingdom.

A group of companies including Google’s parent firm Alphabet, Facebook parent Meta and online payment giant Stripe announced a US$925 million fund in April for carbon removal technology up to 2030. In the same month, climate technology investor Lowercarbon Capital pledged US$350 million for carbon removal start-ups.

The efforts amount to an expensive bet on a nascent sector at least decades away from commercial viability. Directly capturing carbon dioxide from the air, which has until recent years been the subject of scepticism, is increasingly considered essential for keeping global warming in check, as humanity hurtles towards blowing its carbon budget for maintaining a safe living environment.

Cut greenhouse gases today or tomorrow?

With cheaper and more mature decarbonisation options available today, a dollar invested into a solution for the future could mean less emissions captured or avoided now – a potentially significant trade-off given the need for urgent climate action today.

Emissions will need to peak in three years and fall rapidly thereafter to keep global warming sufficiently in check to keep the world liveable, according to the latest report by the Intergovernmental Panel on Climate Change (IPCC), a group of scientists working under the United Nations.

Such efforts could be driven by the rapid deployment of renewables, as well as protecting or restoring forests.

More than 4 gigatonnes of carbon dioxide emissions could be avoided in the next eight years through building solar panels and wind farms, even without a tax on carbon emissions, according to the report.

Nature-based solutions can add another 5 gigatonnes of carbon savings if the global carbon price is around US$50 per tonne of carbon dioxide.

At the same time, all possible ways of keeping climate change to 2 degrees Celsius by the end of the century requires pulling CO₂ out of thin air, which needs to be achieved by novel technologies such as DAC, the IPCC report added.

We are at the tipping point for the climate. For that reason, putting all negative emissions technologies to work makes sense.

Professor Mihrimah Ozkan, department of electrical and computer engineering, University of California, Riverside

The world pledged in 2015 to limit global temperature rise to well below 2°C, and strive for 1.5°C – a threshold scientists say helps avoid the worst impacts of climate change, such as long droughts, heavy storms and malnutrition. The IPCC said 1.5°C will likely be breached before a possible return to under that level; the World Meteorological Organisation said this month that this temperature threshhold could be reached in the next five years.

“We will need to deploy all of the technology we have available at scale today, while still also researching the technologies we’re going to need in the future,” said Marc Allen, co-founder of Singapore-based climate-tech platform Unravel Carbon. He believes DAC will come in handy in the second half of this century, to help fix the temperature and carbon budget overshoot that is likely by then.

As for how funds should be split between the two purposes: “That’s a very, very hard question to answer,” Allen said.

Experts have called for carbon removal technology such as DAC to be developed alongside climate mitigation options for today, rather than see it as a replacement, due to uncertainties over whether it can succeed down the road.

Inherent disadvantages

While there is too much carbon dioxide in the air for a stable climate, it still only amounts to about 0.04 per cent of Earth’s atmosphere – an extremely dilute concentration for carbon capture equipment to handle.

In comparison, similar filters installed to capture emissions from the exhaust streams of industrial activity or power generation – in a process generally known as carbon capture, utilisation and storage (CCUS) – can work with CO₂ concentrations of up to 20 per cent.

As a result, the IEA estimates that even the most expensive applications of CCUS tops off at around US$120 per tonne of emissions, one-fifth the price of DAC today.

DAC will also require a much larger energy expenditure, currently estimated at over 2,000 kilowatt-hours per ton of CO₂ – about five times the energy required for CCUS.

“Direct air capture only makes real emissions sense if you are using renewable energy,” said Dr Philip Andrews-Speed, a senior principal fellow at the National University of Singapore’s Energy Studies Institute.

“If you’re in Iceland or the Sahara Desert, that’s more valid. If you’re in a place with a lot of non-renewable energy and a lot of point emissions sources like China, go with CCUS,” he added.

“Carbon capture at the source certainly makes more sense,” said Professor Mihrimah Ozkan from the department of electrical and computer engineering at University of California, Riverside, referring to CCUS technology.

But Ozkan added that DAC may help to partially offset emissions from sources that are hard to decarbonise, such as concrete and steelmaking, transport and wildfires.

“We are at the tipping point for the climate. For that reason, putting all negative emissions technologies to work makes sense,” Ozkan said.

Not taking off just yet

In the IEA’s vision for reaching net-zero carbon emissions by mid-century, published last year, DAC plants will need to capture 85 million tonnes of CO₂ by 2030, and 980 million tonnes by 2050.

The growth rate required to reach those figures has not materialised yet, nor has has the cost of capture fallen. The price of capturing a tonne of CO₂ at Climeworks’ plants hasn’t dropped since 2017, when it opened what it called its first commercial-scale DAC plant in Switzerland.

The 40,000-tonne capacity plant slated for 2024 will likely operate within the same price bracket as today, at US$800-1,000 per tonne of CO₂, said Climework’s Olesen.

Climeworks is aiming to reduce the price to around US$300 by 2030, and US$100 by 2050, through technology breakthroughs, economies of scale and possibly more favourable policies, Olesen added. Other firms in the industry are looking to beat those numbers, though success for anyone relying on a technology this nascent is far from guaranteed.

US$300 will likely still be much higher than prevailing carbon taxes by the end of the decade; the current calls are for the tax to hit about US$100. Buyers of Climeworks’ carbon credits today are mostly huge multinationals such as computing giant Microsoft and re-insurer Swiss Re, which can afford the high prices and see value in getting into the carbon removal game early.

Governments are also getting into the act. The United States announced a US$3.5 billion fund to establish four DAC hubs across the country last year. The United Kingdom also has a US$80 million programme to support carbon removal projects.

“It is a recognition that we need the technology, and you can’t leave it until 2050 to start,” said Allen.

The article has been edited to clarify that Climeworks issues carbon credits at US$800-1,000 per tonne of CO₂, not US$600-800.

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