IDTechEx Highlights Direct Air Capture's Challenge in Achieving $100/Tonne Carbon Removal

Exploring Direct Air Capture's Economic Viability

In the quest to achieve net-zero emissions by 2050, a significant challenge lies in removing billions of tonnes of carbon dioxide (CO2) from the atmosphere. The latest report published by IDTechEx titled "Carbon Dioxide Removal (CDR) 2025-2035 Technologies, Players, Carbon Credit Markets, and Forecasts" highlights that Direct Air Capture (DAC) stands out among various carbon removal technologies as one of the most promising solutions. However, the current economic viability of DAC is a substantial hurdle due to its high operational costs.

Eve Pope, a Senior Technology Analyst and the report's author, sets the bar for DAC at a removal cost of $100 per tonne of CO2. Reaching this target is deemed essential for encouraging widespread adoption by both government entities and corporations alike. Currently, DAC costs hover around an alarming $1000 per tonne, which drastically limits its application as a feasible solution for carbon removal.

In 2024, DAC technology took a significant leap forward when Climeworks launched the world's largest direct air capture facility, capable of removing 40,000 tonnes of CO2 annually. Furthermore, the upcoming 1PointFive Stratos facility aims for an even larger scale of capture, targeting megatonne-level operations starting in 2025.

As the scale of DAC plants expands, associated supply chains can begin to develop, allowing for the distribution of fixed costs across larger quantities of captured CO2. This scaling up is critical for driving down costs, an essential finding from the IDTechEx report. Notably, the report offers insights into valuable lessons from DAC pioneers regarding the establishment of efficient supply chains. For example, Carbon Engineering's innovative approach for the Stratos facility leverages existing industrial cooling towers in its design, showcasing how incorporating pre-existing industrial solutions can facilitate rapid scaling.

Bringing the costs of DAC closer to the ideal $100 per tonne target will require not only scaling but also significant technological advances. The current state-of-the-art DAC technologies typically operate on temperature-based mechanisms, where researchers are exploring semi-continuous sorbent processes or seeking liquid solvents that can regenerate at lower temperatures (~100°C). These developments could critically reduce the energy demand associated with DAC, which significantly contributes to overall capture costs.

Another avenue gaining traction involves shifting towards electrochemical methods for DAC, promising enhanced energy efficiency and the ability to integrate with intermittent renewable energy sources like wind and solar power. While still at a nascent stage compared to traditional temperature-based methods, several innovative startups including Carbon Blade, Parallel Carbon, and Yama are actively working on electrochemical DAC technologies aimed at lowering capture costs through these new methodologies.

Despite the current high costs associated with DAC, the technology does benefit from favorable conditions in North America. Under Canada's Investment Tax Credit program, DAC initiatives can receive coverage for a substantial 60% of capital expenses. Meanwhile, the U.S. provides the 45Q tax credit, offering $180 per tonne of CO2 captured using DAC, which has remained resilient even amid fluctuating government policies.

These governmental supports serve as a critical bridge connecting the present cost realities to the long-term $100 per tonne goal. Furthermore, voluntary carbon markets play a crucial role in creating business model viability through the monetization of carbon credits. For instance, in 2024, tech giant Microsoft announced a procurement of 500,000 tonnes of CO2 removal from the Stratos facility, demonstrating corporate interest in supporting DAC technologies.

Looking ahead, the sustained success of DAC will hinge on its integration into broader compliance carbon markets under initiatives like Article 6.4 of the Paris Agreement, which aims to establish a comprehensive regulatory framework for carbon credits.

As the climate crisis grows more pressing, the urgency to enhance the scalability and economic feasibility of Direct Air Capture technologies continues to mount. Achieving this would not only serve climate goals but also catalyze a transformative shift in how businesses and governments manage carbon emissions moving forward.

For further insights and information about the comprehensive findings from IDTechEx, visit IDTechEx.com/CDR. To explore their full range of related research offerings, browse through IDTechEx.com/Research/Energy.