Is Large-Scale Direct Air Capture Realistic?

Direct air capture (DAC) is a promising new technology that could prove to be a critical tool in scrubbing planet-warming gases like carbon dioxide from the atmosphere. It is foundational to the energy transition strategy of Occidental Petroleum, which looks set to launch the world’s biggest DAC project as soon as 2024, with other oil firms also exploring it with keen interest. Yet with so few projects in existence today, major questions linger over the long-term viability of widely deploying the technology — with costs needing to fall dramatically and uncertainties abounding about how to scale it up.

A report from the UN Intergovernmental Panel on Climate Change (IPCC) this month said carbon-capture technologies, including DAC, will be “unavoidable” in the fight against global warming, even though these solutions still have a lot to prove. DAC — which involves large machines that vacuum emissions from the air — is newer and much more expensive than today's point-source carbon capture and storage, which captures emissions right at a specific source of pollution. Yet there is a lot to like about DAC. Its footprint on land and water use is comparatively small and it is easier to quantify the volumes of CO2 being captured and stored than point-source solutions. Air-captured CO2 is also readily available for other uses such as climate-neutral feedstocks for fertilizers or synthetic fuels.

Learning by Doing

In the International Energy Agency’s (IEA) Net Zero by 2050 Scenario laid out last year, DAC will account for more than 85 million tons of CO2 captured in 2030 and some 980 million tons annually by 2050. Today, existing DAC projects capture less than 10,000 tons per year. Carbon-removal consultant Na’im Merchant, who describes himself as a “cautiously optimistic DAC supporter,” says despite all the attention DAC receives today, it’s still too early to know its potential until there is more deployment.

“There’s just so much we have to learn,” he tells Energy Intelligence. “I don’t know if it’s viable, I don’t know when it becomes viable but … we will get a decent amount of information on where we stand when we’ve gotten the first few of these large-scale plants up and running and we’re learning from that.”

There are currently 18 DAC projects in operation globally, all in the demonstration phase. The 19th, led by Oxy-backed developer 1PointFive, is due to begin construction later this year and start commercial operations in 2024. The project, using technology developed by Canada-based Carbon Engineering, aims to capture up to 1 million tons of CO2 per year and utilize it for enhanced oil recovery for Oxy in the Permian Basin. Oxy said last month that it could build as many as 70 DAC plants by 2035 globally if current market conditions persist.

Colossal Costs

Deployment of projects like this will be key to bringing down the high costs of DAC. Oxy says its first plant will remove carbon from the air for about $300 per ton, although it expects the next plant to cost less as equipment gets more standardized and supply chains are optimized. The IEA said in a report this month that DAC costs are “extremely uncertain” and largely depend on the specific technology deployed.

The IEA reckons the cost of capture for a large-scale DAC plant (at least 1 million tons/yr) ranges from about $125-$335/ton, depending on many factors including the technology, energy costs, financial assumptions and whether captured carbon is stored or utilized. The US Department of Energy’s carbon-negative “Earthshot” initiative, aimed at accelerating emerging technologies, targets a cost of $100/ton or less for CO2-removal solutions within a decade.

Policy incentives could help push projects along. The IEA says a carbon price above $160/ton “could make DAC-based capture profitable” — although some would say that such a high price won't be widely adopted anytime soon. California’s Low-Carbon Fuel Standard credits combined with existing federal tax credits under 45Q in the US could make projects “commercially attractive” at $200-$250/ton if they qualify, the IEA says, although a facility must have capture and storage capacity above 100,000 tons/yr to qualify for 45Q. Heat and electricity — preferably sourced from renewable generation — account for some of the largest capture and storage costs, so projects built close to available wind, solar or geothermal resources will have a leg up initially.

Social License

Another potential obstacle to widescale DAC deployment is the “social license” to operate the facilities and associated infrastructure, Merchant says. While these large projects may be technically and even economically feasible, there will inevitably be surrounding communities dubious of hosting these new technologies. “How are regulations going to help speed up or get in the way of deployment of direct air capture? I think that’s something that we really haven’t figured out yet. What are the potential roadblocks from a permitting standpoint, from a social-license standpoint, from a community buy-in standpoint?”

Despite the challenges, project funding is not likely to get in the way of DAC deployment. Governments around the world are already on board, with nearly $4 billion in commitments specifically for DAC. New research and development funding is expected soon in Australia, Canada, Japan and the UK, among other places. Last week, some of the world’s largest tech companies launched the Frontier climate initiative, committing $925 million to purchase captured carbon between now and 2030, an “advance market commitment” designed to guarantee future demand for CO2.