- Demand from corporates seeking to offset emissions and government incentives boosting companies that are removing carbon directly from the atmosphere
- Biggest momentum is in the United States, where President Biden’s infrastructure bill has authorised $3.5 billion to create four DAC hubs
- Environmentalists concerned that the first commercial-scale plant, in Permian basin, will use captured CO2 to help extract oil, undermining green transition
- Companies also plan to combine CO2 with green hydrogen to make fossil-fuel free fuels for aviation and road transport
May 9 - Travelling any road to limiting warming to 1.5 degrees Celsius will require us to suck carbon dioxide out of the atmosphere, according to the latest Intergovernmental Panel on Climate Change (IPCC) report. Various climate scenarios suggest some 6 billion tonnes a year may need to be sequestered by mid-century, because some industries will still emit CO2, and residual emissions will need to be mopped up.
A decade ago, direct air capture (DAC) was dismissed as unproven and far too expensive to have in the armoury. But things look different as 2030, the decisive date to slash emissions, looms large, and studies show the traditional role of tropical forests in sequestering carbon is weakening due to escalating forest loss from wildfires and the incursion of agriculture.
A study last year found that the Amazon river basin is teetering on the verge of becoming a net emitter of CO2, capturing only 120,000 tonnes of CO2 per year. New government data from Brazil on the weekend showed that deforestation in the Brazilian Amazon in the first four months of 2022 increased 69% compared to the same period of 2021, clearing an area more than double the size of New York City.
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One big advantage of direct air capture is its relatively compact physical footprint. According to one scientific study the technology would require on average 20 square kilometres of space to capture as much CO2 as is still being captured by the Brazilian Amazon.
But replicating a service provided by nature for free will not come cheap. Unlike carbon capture and storage, which captures carbon from the flue gases of a power station or other industrial processes, where CO2 is highly concentrated, CO2 accounts for only 0.04% of our atmosphere. That means huge amounts of energy are required to process and capture it.
And with only 18 direct air capture facilities operating in Canada, Europe and the United States, together capturing only 10,000 tonnes of CO2, the technology will need to scale extremely rapidly if it is to capture more than 85 million tonnes by 2030, and 980 million tonnes by 2050, as envisaged in the International Energy Agency's net-zero emissions scenario.
In Iceland last year Climeworks opened the world’s largest plant, capable of capturing 4,000 tonnes of CO2 a year. In a process powered by geothermal energy, air is drawn by fans onto a solid filter material, which the carbon dioxide sticks to. Once saturated with CO2, the collectors are heated to release the gas, which is mixed with water and injected at pressure into basalt rock, by Climeworks’ Icelandic partner Carbfix. The CO2 becomes rock within a few years, and thus is locked away.
Although these offsets cost as high as 800 pounds sterling per tonne ($986) of CO2 removed, such has been the demand from the likes of Microsoft, Swiss Re, and payment software platform Stripe that Climeworks managed to raise $650 million to scale the technology, and now aims to have a plant 10 times larger up and running in the next few years.
Last month a group of brands, including Google parent Alphabet, Meta, Shopify, Stripe and McKinsey & Co signed up to a platform called Frontier that will pool commitments to spend $925 million over the next eight years on technologies to remove CO2, including direct air capture, in a bid to scale the technologies and bring down costs.
As well as storing carbon dioxide extracted from the air, companies are combining CO2 with green hydrogen to make synthetic fuels, also known as e-fuels, which can help cut emissions from aviation and road transport.
Houston-based HIF Global, along with Siemens Energy, Porsche and other international partners, expect a pilot e-fuels plant in Chile to come on stream later this year. The Haru Oni demonstration plant will producing 130,000 litres of e-fuels a year, combining captured CO2 with green hydrogen powered by wind turbines.
HIF, which stands for “highly innovative fuels”, last month announced plans to build 12 e-fuels facilities globally, which it says will capture 25 million tonnes of CO2 per year and produce 150,000 barrels per day of synthetic fuel from 2026.
Meanwhile, British Columbia-based Carbon Engineering, which is capturing CO2 for both storage and the production of e-fuels, is planning to start producing 100 million litres of synthetic fuels in 2026 at a plant in Canada.
The biggest momentum on direct air storage is in the United States, where President Biden’s infrastructure bill last November authorised $3.5 billion to create four DAC hubs, and another $4.6bn to support enabling infrastructure like CO2 pipelines and geologic sequestration.
There are also several legislative proposals to quadruple the 45Q tax incentive for carbon storage from $45 to $180 per tonne, while California’s low-carbon fuel standard, which mandates reductions in the carbon intensity of transport, includes a credit for DAC plants of about $200 per tonne of CO2.
Both were used to finance the world’s first large-scale DAC plant, currently being built in the Permian basin by 1PointFive, a joint venture involving Occidental’s subsidiary, Oxy Low Carbon Ventures, and Carbon Engineering.
Although 1PointFive also plans to use Carbon Engineering’s technology to make synthetic fuels, in the Permian Basin project the 1 million tonnes of CO2 captured per year will be pumped into the ground and used to extract oil that would otherwise remain trapped under the surface, a process known as enhanced oil recovery.
Such plans have sparked concern among some academics and environmentalists that carbon removal technologies could add to the climate crisis, rather than help to solve it, by increasing the production of fossil fuels, and delaying action to prevent CO2 emissions from happening in the first place.
Occidental, which plans 70 DAC plants by 2035, recently told investors that the CO2 captured and trapped in an EOR reservoir can equal the equivalent lifecycle emissions of each barrel of oil extracted, to produce what it describes as “net zero oil”.
In an interview, Amy Ruddock, European vice president for Carbon Engineering, defended the approach, saying that “when you do enhanced oil recovery, you’d better do your best to decarbonise it”. Moreover, she said, getting DAC to scale means “you need to really look for those markets, which can support direct capture to get going down that cost curve”.
In the UK, Carbon Engineering recently won funding from the UK government to help develop its processes for a project with Storegga Geotechnologies in north-east Scotland. It could potentially tap into carbon transport and storage infrastructure Storegga is developing through the Acorn carbon capture and storage project.
Ruddock said she is also talking to the UK government about a funding mechanism for greenhouse gas removals. One option is to create a contracts for difference mechanism, similar to those used to develop wind and solar in the UK.
At European Union level there are discussions about integrating DAC into its carbon market, and detailed work on carbon-removal certification is under way.
Christoph Beuttler, head of climate policy at Climeworks, said in an interview that he is encouraged by the backing now being given to DAC, though he acknowledges that the industry will need to innovate to cut down on its vast energy needs.
Climeworks hasn’t disclosed the energy consumption of its plant in Iceland, but the biggest demand is heat for releasing the CO2. “We could look at things like solar thermal and heat pumps, but again, that would require improvements in solar thermal. So that's what I mean by building an industry. That there are many, many things that have to be improved.”
Storage for the CO2 that DAC plants will collect will also need to be developed. Climeworks is exploring locations in Norway and in Oman, where there is both availability of renewable energy and geologic storage.
“You will need more energy than you get out. But it's the only way to get off fossil CO2. That's the reality of it, unfortunately,” says Beuttler.
He adds: “We are in a tight spot, in terms of our climate goals. This type of technology gives us the opportunity to just make it. But we have to pull everything together.”