Deep dive: Direct air capture (DAC) economics & deployment — what's working, what's not, and what's next

Direct air capture technology has crossed a critical threshold. After years of scepticism about whether removing CO2 directly from ambient air could ever be economically viable, the sector secured over $4.2 billion in committed capital between 2022 and 2025, with operational capacity growing from under 10,000 tonnes of CO2 per year in 2022 to approximately 25,000 tonnes per year by mid-2025. Yet this capacity remains orders of magnitude below the gigatonne-scale removal that climate models indicate is necessary, and the cost per tonne of CO2 captured still ranges from $400 to $1,000 at most operational facilities. The central question for sustainability leaders, policymakers, and investors is whether the cost trajectory will follow solar energy's dramatic decline or whether fundamental thermodynamic and engineering constraints will limit DAC to a niche role in the carbon removal portfolio.

Why It Matters

The Intergovernmental Panel on Climate Change's Sixth Assessment Report identifies carbon dioxide removal (CDR) as essential in all modelled pathways that limit warming to 1.5 or 2 degrees Celsius. The IPCC's median scenario requires 5-16 gigatonnes of CO2 removal per year by 2050, with DAC contributing 0.5-5 gigatonnes depending on the pathway. Current global DAC capacity of roughly 25,000 tonnes per year represents less than 0.001% of even the lowest target.

For UK-based sustainability leaders, the urgency is shaped by several factors. The UK Climate Change Committee's Sixth Carbon Budget recommends 23 million tonnes of engineered carbon removal per year by 2050, with DAC expected to contribute 5-10 million tonnes. The UK government's Net Zero Strategy and subsequent policy updates have allocated over 20 billion pounds to carbon capture, utilisation, and storage (CCUS) infrastructure through 2030, with DAC eligible for support through the Greenhouse Gas Removal (GGR) programme. The government's March 2025 update confirmed that DAC facilities will be eligible for contracts under the Dispatchable Power Agreement framework, providing revenue certainty for developers.

Beyond regulatory compliance, DAC addresses a growing commercial demand. Over 110 companies have made net-zero commitments that include residual emissions they cannot abate through operational changes alone. The voluntary carbon removal market reached $1.4 billion in 2024, with DAC credits commanding premium prices of $400-1,200 per tonne compared to $10-50 per tonne for nature-based offsets. Major purchasers including Microsoft, Stripe, JPMorgan Chase, and Airbus have signed advance market commitment agreements totalling over $1.5 billion for DAC-based removal, providing critical demand signals that underpin investment decisions.

The economic implications extend beyond carbon removal itself. DAC facilities require significant energy inputs, creating demand for dedicated clean energy generation. They produce concentrated CO2 streams suitable for geological storage or utilisation in synthetic fuels, chemicals, and building materials. The UK's existing North Sea infrastructure, originally built for oil and gas extraction, provides a geological storage advantage that few other nations can match.

Key Concepts

Liquid Solvent DAC (as deployed by Carbon Engineering, now Occidental's 1PointFive subsidiary) uses large air contactors to pass ambient air across a potassium hydroxide solution that reacts with CO2 to form potassium carbonate. The solution is processed through a series of chemical steps (causticisation, calcination) to regenerate the solvent and release a concentrated CO2 stream. The process operates at high temperatures (approximately 900 degrees Celsius for calcination), requiring significant thermal energy, but benefits from well-understood chemical engineering principles and the ability to use natural gas with carbon capture or clean electricity for heat generation.

Solid Sorbent DAC (as commercialised by Climeworks and Global Thermostat) passes ambient air over solid materials (typically amine-functionalised filters or metal-organic frameworks) that chemically bind CO2 at ambient conditions. The sorbent is then heated to 80-120 degrees Celsius to release the captured CO2 and regenerate the sorbent for reuse. The lower regeneration temperature enables the use of waste heat or low-grade geothermal energy, but current sorbent materials degrade over thousands of capture-release cycles, requiring periodic replacement at significant cost.

Electrochemical DAC represents an emerging third approach that uses electrochemistry to drive the CO2 capture and release cycle, potentially eliminating the need for thermal energy entirely. Companies including Verdox, Mission Zero Technologies, and Heirloom Carbon (using a related electrochemical mineralisation approach) are developing systems that could reduce energy requirements by 30-50% compared to thermal processes. Most electrochemical approaches remain at technology readiness levels 4-6, with commercial deployment expected between 2027 and 2030.

CO2 Transport and Storage infrastructure is essential for DAC deployment at scale. Captured CO2 must be compressed to supercritical conditions (above 73 atmospheres pressure) for pipeline transport or shipping to geological storage sites. The UK's planned CO2 transport and storage clusters (HyNet in the northwest, East Coast Cluster centred on Teesside, Acorn in northeast Scotland, and the Viking CCS project in the Humber) provide the backbone for DAC deployment in the UK.

Levelised Cost of Carbon Removal (LCCR) calculates the total cost per tonne of CO2 permanently removed from the atmosphere, including capital expenditure, operating costs, energy, sorbent or solvent replacement, CO2 transport and storage, and monitoring, reporting, and verification (MRV) over a facility's operating life. LCCR provides the most comprehensive cost metric but is sensitive to assumptions about facility lifetime, capacity utilisation, energy prices, and learning rates.

DAC Cost and Performance Benchmarks

Metric	Current (2025)	Near-Term Target (2030)	Long-Term Target (2040)
Cost per Tonne CO2 (Liquid Solvent)	$400-600	$200-300	$100-150
Cost per Tonne CO2 (Solid Sorbent)	$600-1,000	$250-400	$100-200
Energy per Tonne CO2 (Thermal)	5-9 GJ	4-6 GJ	3-5 GJ
Energy per Tonne CO2 (Electrical)	1.5-2.5 MWh	1.0-1.8 MWh	0.7-1.2 MWh
Sorbent Lifetime (Cycles)	3,000-5,000	8,000-12,000	15,000+
Facility Capacity Factor	70-85%	85-92%	90-95%
Land Use (hectares per MtCO2/yr)	2-5	1-3	0.5-2

What's Working

Climeworks Mammoth Plant, Iceland

Climeworks' Mammoth facility, which began operations in mid-2024, represents the largest solid sorbent DAC plant in the world with a nameplate capacity of 36,000 tonnes of CO2 per year. Located adjacent to the Hellisheidi geothermal power plant in Iceland, Mammoth uses geothermal energy for both electricity and the low-grade heat required for sorbent regeneration, achieving near-zero operational emissions. Captured CO2 is dissolved in water and injected into basaltic rock formations through the Carbfix process, where it mineralises into stable carbonate minerals within 2-3 years.

Early operational data indicates that Mammoth is achieving capture rates at approximately 85% of nameplate capacity, with energy consumption of 6.5 GJ thermal and 1.8 MWh electrical per tonne of CO2. The cost per tonne is estimated at $800-1,000 at current scale, though Climeworks projects costs declining to $400-500 per tonne as the facility reaches sustained full capacity and operational optimisations are implemented. The company has secured over $600 million in advance purchase commitments from corporate buyers including Microsoft, Shopify, and Swiss Re.

1PointFive STRATOS, Texas

Occidental Petroleum's 1PointFive subsidiary began commissioning the STRATOS facility in Ector County, Texas, in late 2024, with full operations expected through 2025. STRATOS is designed to capture 500,000 tonnes of CO2 per year using Carbon Engineering's liquid solvent technology, making it by far the largest DAC facility under construction globally. The facility is co-located with Occidental's enhanced oil recovery operations in the Permian Basin, which provide both a revenue stream for the captured CO2 and access to geological storage infrastructure.

STRATOS benefits from the US Inflation Reduction Act's 45Q tax credit, which provides $180 per tonne for DAC-captured CO2 permanently stored in geological formations. At 500,000 tonnes per year, this represents $90 million in annual tax credits. Combined with revenue from CO2 sales for enhanced oil recovery and voluntary credit purchases, 1PointFive projects that STRATOS will achieve positive cash flow within 3-5 years of full operation. The US Department of Energy also awarded $1.2 billion to the South Texas DAC Hub, anchored by STRATOS, through the Bipartisan Infrastructure Law's Regional DAC Hubs programme.

Advance Market Commitments Driving Investment

The Frontier coalition, initiated by Stripe and joined by Alphabet, Meta, McKinsey, JPMorgan Chase, and others, committed $1 billion to advance purchase agreements for permanent carbon removal between 2022 and 2030. By early 2025, Frontier had contracted approximately $430 million in purchases across multiple DAC developers. These commitments reduce revenue uncertainty, enabling developers to secure project finance at lower capital costs. The model has inspired similar initiatives: the First Movers Coalition (convened by the World Economic Forum) includes DAC in its demand commitment framework, and the NextGen CDR Facility (backed by Swiss Re and the Boston Consulting Group) operates a comparable European procurement programme.

What's Not Working

Energy Requirements Remain a Fundamental Challenge

DAC is inherently energy-intensive because atmospheric CO2 concentration is approximately 425 parts per million, meaning that enormous volumes of air must be processed to capture each tonne of CO2. Current facilities require 5-9 GJ of thermal energy and 1.5-2.5 MWh of electricity per tonne of CO2 captured. At scale, a 1-million-tonne-per-year DAC facility would consume 1.5-2.5 TWh of electricity annually, equivalent to the output of a dedicated 500-800 MW wind farm operating at typical capacity factors. Scaling DAC to gigatonne levels without competing for clean energy that could otherwise displace fossil fuel generation requires dedicated, additional renewable energy capacity that does not yet exist.

In the UK context, where offshore wind capacity is expanding rapidly but grid constraints limit onshore deployment, identifying suitable locations with both clean energy availability and proximity to CO2 transport infrastructure remains a significant planning challenge. The UK's Climate Change Committee has flagged this energy competition risk, recommending that DAC deployment be paired with dedicated low-carbon energy supply rather than drawing from the national grid.

Cost Reduction Pace Is Uncertain

DAC proponents frequently draw analogies to solar photovoltaic cost declines, which fell 99% over four decades following a consistent learning rate. However, DAC cost reduction faces constraints that solar did not. Solar PV benefited from semiconductor manufacturing scaling laws, where cost declines were driven by improvements in a single, mass-producible component. DAC costs are distributed across air contactors, sorbent or solvent systems, thermal energy, electrical energy, and CO2 handling, each with different learning rates and floor costs.

A 2024 analysis by the UK's Energy Systems Catapult estimated DAC learning rates at 10-15% cost reduction per doubling of cumulative capacity, compared to 20-25% for solar PV historically. At this rate, achieving $100 per tonne would require cumulative deployment of 50-200 million tonnes, representing $30-100 billion in cumulative investment before the technology becomes cost-competitive with many abatement alternatives.

Sorbent and Solvent Degradation

Solid sorbent materials currently degrade after 3,000-5,000 capture-release cycles, requiring replacement every 2-4 years at significant cost. Sorbent replacement accounts for 15-25% of operating costs at current facilities. Amine-based sorbents are particularly vulnerable to oxidative degradation when exposed to atmospheric oxygen during the capture phase, and to thermal degradation during regeneration. Improving sorbent durability to 10,000-15,000 cycles would reduce replacement costs by 60-70%, but achieving this while maintaining capture kinetics and capacity remains an active research challenge.

Liquid solvent systems face different but analogous challenges: the high-temperature calcination step (approximately 900 degrees Celsius) requires substantial energy and imposes thermal stress on reactor components, driving maintenance costs and limiting facility availability.

Monitoring, Reporting, and Verification Gaps

Credible carbon removal requires robust MRV demonstrating that captured CO2 remains permanently stored. For geological storage, this means monitoring injection wells, reservoir pressure, and potential leakage pathways over decades or centuries. The Carbfix mineralisation process provides high confidence in permanence (mineralised CO2 is geologically stable for millennia), but this approach is geographically limited to basaltic formations. Saline aquifer storage, which offers far greater global capacity, requires ongoing monitoring and faces greater public acceptance challenges.

Current MRV frameworks for DAC are still maturing. The International Organization for Standardization published ISO 27916 for CO2 storage in 2019, but standards specific to DAC-captured CO2, including guidance on system boundaries, leakage accounting, and additionality, are still under development. The Integrity Council for the Voluntary Carbon Market (IC-VCM) issued Core Carbon Principles assessment criteria for engineered removal in late 2024, but market adoption of these standards remains uneven.

What's Next

UK-Specific Deployment Opportunities

The UK is positioning itself as a European leader in DAC deployment through several strategic advantages. The UK Continental Shelf offers estimated CO2 storage capacity exceeding 78 billion tonnes in depleted oil and gas reservoirs and saline aquifers, sufficient for centuries of storage at projected removal rates. The government's track record of CO2 storage cluster development (with HyNet, the East Coast Cluster, and Acorn progressing through the regulatory process) provides transport and storage infrastructure that DAC facilities can connect to.

Several UK-based DAC developers are advancing projects. Mission Zero Technologies, a Cambridge-based electrochemical DAC company, raised 25 million pounds in Series A funding in 2024 and is developing a pilot facility in northeast England with plans for a 100,000-tonne-per-year commercial facility by 2028. Carbon Capture Scotland is exploring integration of DAC with the Acorn CCS cluster, leveraging the existing Feeder 10 pipeline from St Fergus. The UK's Engineering and Physical Sciences Research Council (EPSRC) funded over 15 million pounds in DAC-related research between 2023 and 2025.

Next-Generation Sorbent Materials

Research programmes at Imperial College London, the University of Edinburgh, and international institutions are developing sorbent materials that could dramatically improve DAC economics. Metal-organic frameworks (MOFs) with tuneable pore sizes and surface chemistry offer CO2 selectivity and capacity improvements of 30-50% over current amine-functionalised sorbents. Humidity-swing sorbents, which release CO2 when exposed to moisture rather than heat, could eliminate the thermal energy requirement entirely. A 2025 paper in Nature Energy demonstrated a MOF-based sorbent achieving 10,000+ cycles with less than 5% capacity degradation, though the material has not yet been tested at pilot scale.

Hybrid and Modular Approaches

The emerging trend towards modular DAC units (shipping-container-sized systems producing 50-500 tonnes of CO2 per year) could reduce deployment barriers by enabling distributed installation without massive upfront capital commitments. Companies including Noya (which retrofits cooling towers with DAC capability) and CarbonCapture Inc. (which uses modular cartridge-based systems) are pursuing this approach. Modular systems sacrifice economies of scale but offer faster deployment timelines, lower financial risk, and the ability to co-locate with distributed energy and heat sources.

Integration with Clean Fuel Production

DAC-captured CO2 combined with green hydrogen produces synthetic fuels (e-fuels) that can decarbonise aviation, shipping, and other hard-to-abate sectors. The UK's Sustainable Aviation Fuels mandate, which requires 10% SAF blending by 2030 and 22% by 2040, creates a domestic market for DAC-derived e-fuels. E-fuel production provides an alternative revenue stream to storage credits, potentially improving DAC project economics in locations where geological storage access is limited.

Action Checklist

• Assess your organisation's residual emissions profile to determine the volume of carbon removal needed to achieve net-zero targets
• Evaluate advance purchase commitments for DAC-based removal through established procurement programmes (Frontier, NextGen, or direct developer agreements)
• Monitor UK government funding programmes including the GGR programme and CCUS cluster support for co-investment opportunities
• Engage with CO2 transport and storage cluster developers (HyNet, East Coast, Acorn, Viking) to understand connection timelines and costs
• Require DAC credit suppliers to demonstrate compliance with IC-VCM Core Carbon Principles or equivalent quality standards
• Model internal carbon pricing at levels sufficient to justify DAC procurement ($200-600 per tonne range) and incorporate into capital allocation decisions
• Track cost reduction milestones across DAC technologies and adjust procurement strategy as costs approach $200 per tonne
• Consider strategic investment in DAC developers or projects as part of corporate venture or sustainability investment programmes

FAQ

Q: What is the current cost per tonne of CO2 removed via DAC, and when will it reach $100? A: Current costs range from $400 to $1,000 per tonne depending on technology, energy source, and facility maturity. Liquid solvent approaches (1PointFive/Carbon Engineering) are at the lower end ($400-600), while solid sorbent systems (Climeworks) remain at $600-1,000. Industry roadmaps target $200-300 per tonne by 2030 and $100-150 by 2035-2040, but these projections depend on continued learning rate improvements and deployment scaling that remain uncertain. The most credible near-term pathway to $200 per tonne involves next-generation sorbent materials, process integration with waste heat sources, and modular manufacturing scale-up.

Q: How does DAC compare to nature-based carbon removal approaches? A: DAC offers advantages in permanence (geological storage lasts millennia versus decades for forest carbon), measurability (tonnes captured are precisely quantified), additionality (DAC facilities exist solely for carbon removal), and land efficiency (DAC requires 1-5 hectares per million tonnes versus 200,000-500,000 hectares for afforestation). Nature-based approaches offer lower costs ($10-50 per tonne versus $400-1,000 for DAC), co-benefits (biodiversity, watershed protection), and immediate availability. A comprehensive removal portfolio will include both approaches, with nature-based solutions addressing near-term needs and DAC scaling to meet long-term requirements.

Q: What energy sources can power DAC without increasing emissions? A: DAC must use low-carbon energy to achieve net-negative emissions. Suitable sources include: geothermal energy (as used by Climeworks in Iceland), dedicated offshore or onshore wind, solar PV with storage, nuclear power, and waste heat from industrial processes. Grid electricity can be used where grid carbon intensity is below approximately 100 gCO2/kWh, which the UK grid is approaching. Natural gas with integrated carbon capture can provide thermal energy for liquid solvent DAC, though this adds complexity and cost. The key principle is that DAC energy consumption must not displace clean energy that would otherwise decarbonise other sectors.

Q: What role should DAC play in a corporate net-zero strategy? A: DAC should be the final layer of a mitigation hierarchy: reduce emissions first through operational efficiency, electrification, and renewable energy procurement; offset residual hard-to-abate emissions through high-quality removal. Most credible net-zero frameworks (SBTi, ISO Net Zero Guidelines) allow DAC credits only for residual emissions after all feasible abatement has been implemented, typically 5-10% of baseline emissions. Begin with small advance purchase commitments (1-5% of current emissions) to build procurement expertise and support market development, then scale as costs decline and your residual emissions profile becomes clearer.

Q: Is DAC eligible for UK government support? A: Yes. The UK government has confirmed DAC eligibility under the GGR programme, which will provide revenue support through contracts similar to Contracts for Difference used in renewable energy. The CCUS Infrastructure Fund and the Net Zero Innovation Portfolio have both funded DAC-related activities. The UK Emissions Trading Scheme is evaluating whether to include engineered removal credits, which would create additional demand. Additionally, DAC facilities may qualify for Enhanced Capital Allowances for energy-saving technologies, Innovate UK grants for technology development, and regional development funding in areas designated for CCUS cluster investment.

Sources

• Intergovernmental Panel on Climate Change. (2022). Climate Change 2022: Mitigation of Climate Change, Working Group III Contribution to the Sixth Assessment Report. Cambridge: Cambridge University Press.
• UK Climate Change Committee. (2025). Progress in Reducing Emissions: 2025 Report to Parliament. London: CCC.
• International Energy Agency. (2025). Direct Air Capture: A Key Technology for Net Zero. Paris: IEA Publications.
• National Academies of Sciences, Engineering, and Medicine. (2019). Negative Emissions Technologies and Reliable Sequestration: A Research Agenda. Washington, DC: The National Academies Press.
• Energy Systems Catapult. (2024). DAC Learning Rates and Deployment Scenarios for the UK. Birmingham: ESC.
• Climeworks AG. (2025). Mammoth Plant: First Year Operational Report. Zurich: Climeworks.
• Frontier. (2025). 2024 Annual Report: Advance Market Commitments for Carbon Removal. San Francisco: Frontier Climate.
• McQueen, N. et al. (2021). "A review of direct air capture (DAC): scaling up commercial technologies and innovating for the future." Progress in Energy, 3(3), 032001.