Think back to 2 weeks ago. Did you feel a paradigm shift on May 31? Here at CCR we did. As did the Fast Company, CNN Tech, and The Washington Post. On that sunny Wednesday, the world’s first commercial-scale direct air CO2 capture project opened for business.
The Center for Carbon Removal attended the launch and our team was treated to a tour of the facility, which captures CO2 from the air and sells it to a nearby greenhouse. While the growth of tomatoes and eggplants is enhanced by the supplemental CO2, don’t be fooled; the ambitions of ClimeWork’s—indeed those of the direct air capture industry—are much larger than veggies.
At the project launch event, company CEO Christoph Gebald said Climeworks is only a “base camp” in their plan to offset 1% of global emissions through similar direct air capture projects by 2025. Beyond this 1% target, he explained that Climeworks envisions expanding by another order of magnitude over the subsequent decade to start delivering “negative emissions” at the billion ton CO2/year scale. What’s more, Climeworks is not alone in their ambition to commercialize direct air capture systems. Companies like Carbon Engineering in Canada, Global Thermostat in California, and Infinitree in NY also have operational direct air capture demonstration plants with commercial scale projects in their sights for the near future.
This flurry of commercial activity around direct air capture is likely to come as a surprise to many in the climate field. Historically, direct air capture has been largely framed as overwhelmingly expensive or impractical at commercial scale by carbon capture experts, due to the challenge of capturing the dilute CO2 in the air (exhaust streams of power plants and other industrial facilities like oil refineries, steel mills, and cement plants have much more concentrated CO2 steams). The fact that Climeworks was able to not only secure millions of dollars in public and private sector investment to develop a functional direct air capture technology, but also attract and enroll a paying customer begs the question: have experts been overlooking the potential for direct air capture systems to decrease in cost and help drive industrial innovation and sustainability?
Although experts are currently skeptical of direct air capture’s high prices and small scale, there are a few reasons why the technology is disproving the climate community’s preconceptions, and is actually following a similar trajectory as many established strategies:
Initial abatement costs are not unreasonable or unprecedented. While the cost and carbon lifecycle assessments for the first of a kind projects can be tricky (especially given that companies are often reluctant to share verifiable data), early direct air capture projects will likely cost around $500/ton CO2—give or take a few $100/ton (Pilke, 2009). This is not cheap, and comparing this cost to the price of current carbon markets like RGGI (~$5/ton CO2) and CA (~$10/ton CO2) might give the impression that large-scale commercial deployment of DAC is decades away. But these costs for direct air capture are actually on par with the debuts of other first-of-a-kind climate technologies (including wind, solar, and electric vehicles) on a $/ton CO2 abated basis. Even today, we have policies that pay similar orders of magnitude for “commercially-viable” climate technologies:
Renewable Portfolio Standards (mandating a state procure a certain portion of their electricity from renewable sources) are estimated to cost up to $181/ton CO2 in NY (Chen et al. 2009).
In order for the Federal Government’s incentives for electric cars to be purposeful and effective, the abatement cost for hybrid vehicle incentives had to be as high as $217/tCO2 (Tseng et al. 2013). Considering the example of Canada’s hybrid vehicle rebates, the the average cost per tonne of CO2 abated was $195 (Chandra et al. 2010). These costs are reaffirmed by Kammen et al.’s findings “that any carbon price would have to exceed $100/t-CO2-eq in order to render PHEVs' reductions cost-effective” (Kammen et al. 2008).
In Germany, the feed-in-tariff supporting solar generation was estimated to cost over $500/ton CO2 on average between 2006-2010 (Marcantonini and Ellerman, 2013).
The lesson here is that some climate policies are designed to create markets for new, innovative technologies; not to reduce the marginal cost of CO2 emissions as much as possible (as is the goal for economy-wide carbon pricing regulations). On this basis and with the right regulatory frameworks, direct air capture could provide a reasonably cost-competitive climate solution in the near future.
Cost reductions for direct air capture systems are likely with further deployment. The initial Climeworks project will capture roughly 900 tons of CO2/year to sell to a greenhouse that is already recycling inexpensive heat energy from a nearby waste incineration plant. While many experts would perceive this small scale, niche end market and cheap energy as red flags, Climeworks sees these aspects of the technology as assets, and not deficiencies. It can be easier to raise funds for $million-scale projects than for $billion conventional carbon capture projects at power plants. Moreover, because the technology Climeworks is developing is modular, multiple small projects can provide the manufacturing experience needed to innovate system design and decrease costs rapidly. With market competition from other direct air capture developers deploying similar modular strategies, it is reasonable to expect that direct air capture innovation and cost improvements will continue.
Broad, bipartisan appeal for the technology. Direct air capture has managed to capture the imagination of many people—from tech enthusiasts to environmental campaigners. Furthermore, politicians on both sides of the aisle have acknowledged beneficial aspects of direct air capture. For example, Senators Barrasso (R-WY) and Schatz (D-HI) have co-sponsored legislation that would create a $50M Federally funded direct air capture innovation prize. Early policy wins for direct air capture could provide an important entry point for larger carbon capture and negative emissions policy efforts in the future (Stephens, 2009).
In conclusion, the whirlwind of commercial activity regarding direct air capture indicates that there is likely more to direct air capture than initially met the eye of climate experts. While a challenging future still lies ahead—one commercial scale project doesn’t signal that direct air capture is here to save the day on climate alone—targeted initiatives intended to catalyze the deployment direct air capture systems could prove highly valuable in offering innovators like Climeworks the opportunity to continue to expand the frontier of industrial innovation and sustainability.