Capturing Carbon from Thin Air: The Race to Scale Direct Air Capture

From Pilot Plants to Million-Ton Targets

Direct air capture (DAC) – pulling CO₂ directly from ambient air – is starting to move from science fiction to scalable climate solution. In 2023, there are only 27 small DAC plants worldwide, together capturing around 0.01 Mt (10,000 tons) of CO₂ per year (Ref). This output is negligible in the context of ~36 billion tons of annual global CO₂ emissions. However, the pipeline is growing fast: over 130 new DAC facilities are in development, which could boost capacity to ~65 Mt CO₂ per year by 2030 if all are realized (Ref). For perspective, that would still be well under 0.5% of global emissions – but it represents an exponential scale-up. In fact, if every announced project is built, DAC deployment by 2030 would nearly hit the level the IEA says is needed in its Net Zero 2050 scenario (~65 Mt/yr by 2030) (Ref). Ambitious longer-term visions go even further: Occidental Petroleum (through its 1PointFive unit) has floated plans to deploy 100+ DAC plants by 2035 (Ref), potentially capturing tens of millions of tons annually. The stage is set for a decade of rapid growth in DAC – on paper, at least.

Major Projects and DAC Hubs Leading the Charge

Several high-profile projects are spearheading this scale-up. In the U.S., the Department of Energy is jump-starting “DAC hubs” – large regional complexes for carbon removal. In 2023, DOE selected two flagship DAC hub projects (out of a $3.5 billion program) for initial funding (Ref). One is Project Cypress in Louisiana, led by Battelle with Climeworks and Heirloom, and the other is the South Texas DAC Hub led by Occidental/1PointFive. Each hub aims to capture 1 million tons of CO₂ per year and permanently store it underground, demonstrating DAC at commercial scale (Ref). The South Texas hub, for example, will start with a 0.5 MtCO₂/yr DAC plant (nicknamed “Stratos”) and plans to expand to 1 Mt/yr, with the site potential to scale up to an astounding 30 MtCO₂ per year over time (Ref). These hubs are essentially first-of-a-kind “carbon factories”, concentrating multiple DAC units with dedicated CO₂ storage infrastructure.

Outside of these hubs, other notable projects include Climeworks’ facilities in Iceland. After operating the 4,000 t/yr Orca plant since 2021, Climeworks is constructing a larger plant called Mammoth (36,000 t/yr) to come online by 2024 (Ref). In Canada, Carbon Engineering (now part of Oxy) has developed a liquid-solvent DAC design that will be used in the Texas hub. Meanwhile, startups like CarbonCapture Inc. (with its planned “Project Bison” in Wyoming) and global efforts in Europe, the Middle East, and Australia are also in the mix. Many of these projects are converging on a new industry standard: DAC facilities of megatonne scale (1 MtCO₂ or more per year) by the mid-2020s to 2030. If even a fraction of the 130+ planned plants reach fruition, we will go from CO₂ removal measured in kilotons today to tens of millions of tons per year within the next decade.

Policy Push: Incentives Fueling the DAC Boom

Why is DAC suddenly taking off after years of being deemed too costly and speculative? A big reason is the surge in government incentives and policy support, led by the United States. The 2022 Inflation Reduction Act supercharged the federal 45Q tax credit for carbon sequestration – raising it to $180 per ton of CO₂ for DAC projects that permanently store the CO₂ in geological formations (Ref). This is a massive increase (previously $50/t for CO₂ storage) and makes DAC removal a potentially viable business model, especially when stacked with voluntary carbon credit revenues. Notably, 45Q now only requires DAC facilities to capture 1,000 tons/year to qualify (Ref), a low threshold that even pilot DAC units can meet, thus encouraging startups to launch initial projects. In addition to 45Q, the Bipartisan Infrastructure Law explicitly allocated $3.5 billion to create at least four Regional DAC Hubs (Ref). The first two hubs (Louisiana and Texas) were announced in 2023, with up to ~$1.2 billion in combined funding for their development. These government funds de-risk the high upfront cost of large DAC plants and associated CO₂ storage wells.

Crucially, the U.S. is also implementing CO₂ removal purchase programs – the DOE is rolling out a Carbon Dioxide Removal procurement initiative where the federal government will pay for delivered tonnage of CO₂ removals (Ref). This guaranteed offtake acts like a market signal to investors that if they build DAC capacity, a buyer (the government) will pay for the service of carbon removal. It’s a similar model to how feed-in tariffs once spurred the growth of renewables. Outside the U.S., policy support is also ramping up: Canada has proposed a 60% investment tax credit for DAC capital costs (Ref), the EU is developing a Carbon Removal Certification Framework and eyeing up to 50 Mt/yr of carbon removals by 2030 (Ref), and the UK and Japan have both earmarked funding and set targets that include DAC (Ref) (Ref). While the U.S. currently leads in dedicated DAC incentives, it’s clear that governments worldwide see carbon removal as a strategic piece of their net-zero plans. The generous U.S. 45Q credit (up to $180/ton) in particular has been described as a “game-changer” that dramatically improves project economics (Ref). For example, a future DAC plant capturing 1 MtCO₂/yr could earn up to $180 million per year via 45Q – a strong financial pull. Without such support, DAC projects simply wouldn’t be moving forward at the current pace, given their high costs and nascent status.

Innovation Spotlight: Sorbents, Modules, and Hybrid Approaches

Scaling up DAC is not just about money; it’s also a tech challenge. DAC systems come in a few flavors, and recent innovations are improving performance and driving down costs. Two primary technical approaches dominate today’s DAC designs:

• Liquid solvent DAC: These systems use chemical solutions (such as strong hydroxide or amine solvents) to bind CO₂. The leading example is Carbon Engineering’s KOH-based process, which involves large cooling-tower-like contactors that capture CO₂ into a liquid, then a series of chemical reactions to concentrate and release pure CO₂. Liquid solvent DAC typically operates at high temperatures – e.g. using a natural gas-fired calciner around 900°C – to regenerate the sorbent. This approach benefits from industrial scale: a single plant can be very large, but it requires significant heat and infrastructure. Carbon Engineering’s design is being deployed in the 1PointFive (Oxy) Texas project, and its proponents claim it can leverage economies of scale for big, centralized DAC “plants” (on the order of 0.5–1 MtCO₂ per year each).

• Solid sorbent DAC: These systems use solid materials (beads, filters, or resins coated with CO₂-binding chemicals) that air passes through. Companies like Climeworks and Global Thermostat pioneered this approach. CO₂ is captured on the solid at ambient temperature, and then the material is heated (or depressurized) to release concentrated CO₂. A key innovation here is that certain solid sorbents can be regenerated with low-temperature heat (about 80–120 °C) (Ref), which means you can use readily available sources like waste heat or electric heat pumps. Solid DAC units are also highly modular – essentially small modular DAC reactors that can be mass-manufactured. For instance, Climeworks builds its DAC plants by stacking many compact modules, each containing fans and sorbent filters, rather than constructing one giant structure. This modularity opens the door to factory-line production of DAC units, sometimes dubbed “dactories.” One study noted that reaching 1 GtCO₂ per year of removal would require on the order of 20 million modular DAC units (assuming ~50 tCO₂/year per module) (Ref) (Ref) – a daunting figure, but one that emphasizes the need for high-volume manufacturing techniques. The modular approach, akin to assembling lots of Lego blocks, could enable rapid scaling once the manufacturing pipeline is established (Ref).

• Hybrid and novel approaches: New DAC startups are also exploring hybrid methods that blend chemical and natural processes. A prime example is Heirloom, which uses the natural affinity of minerals (notably limestone) for CO₂. Essentially, Heirloom spreads out calcium oxide (lime) which passively absorbs CO₂ from air, turning into calcium carbonate (limestone) – a process that normally takes years in nature, but they’ve accelerated it to just days (Ref). The saturated limestone is then collected and heated in an electric kiln to release pure CO₂ (and regenerate the lime for reuse). This method is a hybrid of direct air capture and carbon mineralization, leveraging nature’s “sponge” (minerals) with an engineered regeneration cycle. Other innovations in the pipeline include electrochemical DAC (using electricity to draw out CO₂), adsorbents like metal–organic frameworks (MOFs) that have high CO₂ affinity, and integration of DAC with renewable energy systems (e.g. using off-peak solar/wind power to run DAC fans and heaters). There’s also research into direct ocean capture, capturing CO₂ from seawater (since the ocean equilibrates with atmospheric CO₂) – which could be considered a cousin of DAC.

All these technological avenues aim at the same outcome: lower energy per ton of CO₂ captured, lower capital cost, and more reliable performance. For instance, solid sorbent designs operating at 100°C can potentially use cheap low-grade heat or even solar thermal energy, improving efficiency (Ref). Modular systems promise easier replication and learning-by-doing cost reductions. And each approach has its niche: high-temp solvent systems might fit where waste heat or cheap natural gas is abundant (with CO₂ from the gas hopefully captured too), whereas modular electric systems pair well with clean electricity sources. This diversity of approaches is healthy at this stage – it’s not yet clear which DAC technology (or mix of technologies) will prove best as the industry scales. We are essentially in the “betamax vs VHS” moment of DAC tech, with companies experimenting with different chemistries and engineering designs to capture CO₂ more effectively.

The Scalability Challenge: Energy, Cost, and Carbon Math

For all the excitement, DAC faces significant challenges if it’s to contribute meaningfully to climate goals. First and foremost is the energy requirement. Capturing CO₂ from thin air is inherently energy-intensive because CO₂ is only ~0.04% of the air by volume. In practical terms, current DAC systems consume on the order of several hundred to over 2,000 kWh of energy per ton of CO₂ (in combined heat and electricity). That means a 1 MtCO₂/yr DAC facility might need something like a few terawatt-hours of energy annually, equivalent to the output of a mid-sized power plant. To avoid defeating the purpose, this energy must be carbon-free – otherwise, DAC could emit more CO₂ than it removes. Fortunately, most proposed DAC deployments plan to use renewable electricity and heat (or buy zero-carbon energy). For example, DAC plants in Iceland tap into geothermal heat; others may use dedicated solar farms or even nuclear energy for heat. Even so, the sheer scale of energy needed for gigaton-level DAC is daunting: removing 1 GtCO₂ per year could demand on the order of 10–15% of global electricity generation if today’s technologies are used, though future efficiency improvements could cut this fraction down. The takeaway is that DAC’s growth must go hand-in-hand with growth in clean energy capacity – a major scalability consideration.

Cost is the next big hurdle. DAC currently produces the world’s most expensive CO₂ molecules. Estimates for current DAC costs range from $600 to $1,000 per ton of CO₂ removed (Ref) (Ref) – far higher than most carbon prices or credits today. Only small quantities of CO₂ have been sold at those prices (mainly to tech giants and corporate buyers eager to claim early mover status on carbon removal). The consensus is that costs need to plummet to below $200/ton (and ideally ~$100) for DAC to be deployed at climate-significant scale (Ref) (Ref). How can costs come down? Classical economics suggests learning curve effects as manufacturers build more units, improved sorbent materials with higher efficiency, bigger plants to capture economies of scale, and cheaper energy inputs. The $180 45Q credit already helps close much of the gap between $600 and $200. Additionally, companies like Climeworks have a roadmap to reach $250–300/ton by 2030 and then push lower (Ref). Some analyses (e.g. by BCG) argue that with aggressive innovation, DAC could achieve ~$150/ton by the 2040s – not cheap, but potentially acceptable for offsetting the hardest-to-abate emissions (like aviation). Until those cost reductions manifest, though, the industry will rely on subsidies and premium niche markets. This raises the question: who pays for cleaning up CO₂ at $500/ton in the meantime? So far, the answer has been a combination of government (through tax credits and grants) and voluntary corporate buyers. Encouragingly, there’s a growing voluntary market for engineered carbon removals – companies such as Microsoft, Stripe, and Shopify have committed millions to purchase CO₂ removal from DAC and other tech, to help bootstrap the market. Even the US government’s forthcoming purchases will create a form of demand signal.

Another critical factor is permanence and utilization. DAC’s climate benefit is only as good as the fate of the CO₂ it captures. To truly count as negative emissions, the CO₂ must be stored for the long term (hundreds to thousands of years). The safest bet is deep geological storage – essentially pumping the CO₂ into saline aquifers or basalt formations where it will remain trapped (and eventually mineralize) permanently. When DAC CO₂ is injected into such sites (akin to how some carbon capture and storage projects operate), the removal is considered effectively permanent and verifiable. In fact, advocates highlight that DAC storage provides among the most permanent and trackable carbon removals available – the CO₂ is stashed away and monitored, which avoids the risks of reversal that afflict nature-based solutions like forests (which can burn or decay) (Ref). However, not all CO₂ captured by DAC is destined for permanent burial. Some projects plan to use CO₂ as a commodity – for example, combining CO₂ with green hydrogen to produce synthetic fuels, or using CO₂ in concrete curing, or (more controversially) for enhanced oil recovery (EOR). Using DAC CO₂ for EOR means injecting it into depleted oil wells to push out more oil; that oil is then burned, re-releasing CO₂. Critics argue this simply creates a vicious cycle: you spend energy to capture CO₂ from air, only to enable more fossil fuel extraction, negating much of the benefit () (). Studies have shown that DAC coupled with EOR can result in a net removal far lower than the captured amount – in one analysis, Oxy’s first DAC plant might only achieve ~39% net removal of the CO₂ it captures if the CO₂ is used for oil production (). For these reasons, most sustainability experts stress that DAC should be paired with dedicated CO₂ storage for maximum climate impact, and policies like 45Q incentivize this by paying the highest credit for storage rather than usage. On the positive side, some CO₂ utilization pathways (like mineralizing CO₂ into long-lasting materials) could also provide permanence, but these are still being developed. The key point is that DAC is not a climate cure-all unless its output (captured CO₂) is handled in a climate-beneficial way.

Lastly, there’s the question: Can DAC really contribute to net-zero by mid-century? Many climate scenarios, including those assessed by the IPCC, bank on billion-ton-per-year scale CO₂ removal by 2050 (on the order of 5–10 GtCO₂/yr globally) (Ref). Within that, DAC is often cited as a significant component because of its high durability and land-efficiency relative to biological methods. The IEA’s Net Zero scenario imagines DAC ramping up to ~980 MtCO₂ in 2050 (Ref), roughly a gigaton. These numbers are staggering compared to today’s thousands of tons. Reaching them will require a hockey-stick growth curve for the industry: doubling capacity again and again every few years, for multiple decades. Is this realistic? It’s not impossible – we’ve seen analogous growth in renewables (solar PV went from ~1 GW in 2000 to ~1,000 GW by 2022). But DAC has additional challenges: it requires continuous operating expenditures (energy, sorbent replacement) for each ton captured, not just one-time installation. Some experts worry that building and operating DAC at climate-relevant scale would demand an unwieldy expansion of infrastructure (fans, contactors, pipelines, wells) and resources (chemicals, water for cooling or processing) (). On the other hand, proponents note that DAC does not need much land – it’s about 100 times more land-efficient than nature-based solutions like reforestation for the same CO₂ removed (Ref) – and can theoretically be placed anywhere (preferably where energy and storage are available). They argue that a network of DAC facilities could be a manageable addition to our industrial landscape, especially as other emitting industries shrink in a net-zero transition.

In evaluating DAC’s potential, it’s crucial to maintain a balanced perspective. DAC is not a substitute for aggressive emissions reduction – we must cut CO₂ emissions at the source first and foremost to meet climate targets. However, DAC and other carbon dioxide removal methods are likely essential for balancing out the last residual emissions and to offset legacy carbon pollution (Ref). Sectors like aviation, shipping, cement, or agriculture may have leftover emissions that are very hard to eliminate completely; removing an equivalent amount of CO₂ from the air can offset those. DAC offers a way to do that at scale, in a controlled and measurable fashion. The coming years will test whether the lofty plans (and heavy investments) in DAC translate into real tons of CO₂ sucked from the sky. Key milestones to watch for include the successful commissioning of the first 1Mt/yr DAC plants by the mid-late 2020s, the trajectory of DAC costs (can they halve this decade as hoped?), and the development of a robust market for carbon removal services. By 2030, we’ll likely know if direct air capture is on track to be a significant climate tool or if it remains a niche tech with promise just over the horizon.

Can DAC Deliver on Climate? – A Solution-Focused but Critical Outlook

For sustainability professionals, the rise of DAC presents both opportunities and dilemmas. On one hand, it’s a promising new tool to address emissions that are otherwise impossible to eliminate. DAC’s flexibility (deployable anywhere, feeding CO₂ to various end-uses or storage) and the high purity of its CO₂ output make it attractive. It could enable “negative emissions power plants” when coupled with clean energy, or supply carbon for synthetic fuels and materials without extracting oil. The flurry of investment and innovation around DAC is also spurring broader progress in carbon management technologies, which can spill over into point-source carbon capture, carbon utilization, and more. In short, DAC is a high-potential climate innovation – one that is getting a real chance to prove itself at scale in the next decade.

On the other hand, a critical lens is needed to ensure DAC development stays on a climate-positive path. There is a risk that the hype of DAC could be used to delay conventional mitigation – for instance, if companies or policymakers lean on future carbon removal as an excuse to slack off on cutting emissions now. Additionally, if DAC is primarily deployed for carbon utilization in short-lived products or, worse, to enhance oil recovery, its net contribution to climate goals could be negligible or even negative () (). There are also legitimate concerns about resource usage: a gigaton-scale DAC industry would need vast amounts of renewable energy and potentially significant volumes of sorbent materials and water, raising sustainability questions that must be managed responsibly (). Community and environmental impacts of large DAC facilities (for example, building big contactor arrays and CO₂ pipelines) will need scrutiny and public engagement, much like any large infrastructure project.

The encouraging news is that many stakeholders – from government agencies to NGOs and the DAC companies themselves – are aware of these concerns and are discussing standards for responsible deployment (e.g., siting DAC where it can integrate with existing infrastructure and not compete with other resource needs) (Ref) (Ref). The fact that DAC has captured the imagination (and funding) of both public and private sectors means we have a window now to shape its development. Sustainability consultants can play a key role in this phase: helping design projects that maximize co-benefits (such as using renewable energy, creating local jobs, and sharing benefits with communities), advising on life-cycle assessments to ensure net carbon removal, and crafting corporate strategies that incorporate DAC appropriately (e.g. as part of a portfolio of emissions reduction and neutralization measures).

In conclusion, direct air capture is scaling up from an experimental concept to a tangible industry at an unprecedented pace. The coming years will be critical to see if we can truly bridge the gap from 10 thousand tons removed per year to 10 billion. With the right mix of policy support, technological innovation, and ethical deployment, DAC could evolve into a powerful asset in the fight against climate change – one that addresses the toughest emissions and helps achieve net-zero emissions by mid-century. But it will require continued realism about its limitations and challenges. In the spirit of solution-focused optimism, we can celebrate the momentum behind DAC (the funding, the projects, the breakthroughs) while also rigorously questioning: Are we solving the energy and cost equation? Are we locking away the carbon for good? Are we scaling up fast enough – and smart enough? The answers will determine whether direct air capture becomes a climate savior, a mere stopgap, or a misadventure. For now, the world is investing in finding out, and the race to remove carbon at scale is on.

References

[1] IEA – Tracking Direct Air Capture: Global status and outlook for DAC (2023). (International Energy Agency). Available at: https://www.iea.org/energy-system/carbon-capture-utilisation-and-storage/direct-air-capture

[2] IEA – Inflation Reduction Act 2022 – 45Q Tax Credit Expansion. (International Energy Agency Policy Database). Available at: https://www.iea.org/policies/16255-inflation-reduction-act-2022-sec-13104-extension-and-modification-of-credit-for-carbon-oxide-sequestration

[3] DOE OCED – Regional Direct Air Capture Hubs Program (2023). (U.S. Department of Energy – Office of Clean Energy Demonstrations). Available at: https://www.energy.gov/oced/regional-direct-air-capture-hubs

[4] Oil & Gas Journal – Occidental’s 1PointFive South Texas DAC Hub Awarded US DOE Funding. Sept 13, 2024. Available at: https://www.ogj.com/energy-transition/article/55139879/occidentals-1pointfive-south-texas-dac-hub-awarded-us-doe-funding

[5] World Economic Forum – Achieving Net Zero: Why Costs of Direct Air Capture Need to Drop for Large-Scale Adoption. Aug 9, 2023. Available at: https://www.weforum.org/stories/2023/08/how-to-get-direct-air-capture-under-150-per-ton-to-meet-net-zero-goals/

[6] Frontiers in Climate – Carbon Purchase Agreements, “Dactories,” and Supply-Chain Innovation: Scaling Up Modular DAC to a Gigatonne. January 2021. Available at: https://www.frontiersin.org/articles/10.3389/fclim.2021.636657/full

[7] CIEL – Direct Air Capture: Big Oil’s Latest Smokescreen. (Center for International Environmental Law, Report, Nov 2023). Available at: https://www.ciel.org/wp-content/uploads/2024/04/Direct-Air-Capture-Big-Oils-Latest-Smokescreen-November-2023.pdf

[8] IEA – Direct Air Capture 2022: A Key Technology for Net Zero. (Report, April 2022). Available at: https://www.iea.org/reports/direct-air-capture-2022