Myth-busting Direct air capture (DAC) economics & deployment: separating hype from reality

Climeworks' Mammoth plant in Iceland, the world's largest operational direct air capture facility, reached its nameplate capacity of 36,000 tonnes of CO2 per year in late 2025, yet that figure represents less than 0.00007% of annual global emissions. The International Energy Agency's 2025 Net Zero Roadmap calls for DAC to remove 60 million tonnes of CO2 per year by 2030 and 980 million tonnes by 2050 (IEA, 2025). Between current capacity and those targets lies a gap filled with persistent myths about cost trajectories, energy requirements, scalability, and the role DAC should play in the broader climate portfolio. For founders, investors, and policymakers navigating carbon removal procurement decisions, separating evidence from aspiration is essential.

Why It Matters

The carbon removal market is growing rapidly. Frontier, the advance market commitment backed by Stripe, Alphabet, Shopify, Meta, and McKinsey, has committed over $1 billion in purchases, with DAC projects accounting for the majority of contracted volume (Frontier, 2025). The US Department of Energy's Regional Direct Air Capture Hubs program has allocated $3.5 billion across four hub projects. Private capital is following: venture and growth equity investment in DAC companies exceeded $2.1 billion cumulatively through 2025 (BloombergNEF, 2025).

Yet DAC remains one of the most misunderstood climate technologies. Overestimating near-term cost reductions leads to procurement contracts that cannot be fulfilled at expected prices. Underestimating energy requirements leads to siting decisions that increase rather than decrease net emissions. And treating DAC as a silver bullet diverts attention from emissions reductions that are cheaper and faster. Each of these misunderstandings carries real financial and climate consequences.

Key Concepts

Direct air capture uses chemical processes to extract CO2 directly from ambient air at concentrations of roughly 420 parts per million. Two primary technology families dominate: solid sorbent systems, which use amine-functionalized materials that bind CO2 at ambient temperatures and release it when heated to 80 to 120 degrees Celsius (used by Climeworks and Global Thermostat); and liquid solvent systems, which use aqueous potassium hydroxide solutions to capture CO2 and regenerate the solvent using high-temperature calcination at 900 degrees Celsius (used by Carbon Engineering, now part of Occidental Petroleum's 1PointFive subsidiary).

Cost metrics in DAC are typically expressed as dollars per tonne of CO2 captured, but this figure varies dramatically depending on what is included: energy costs, capital amortization, sorbent replacement, CO2 compression and transport, geological storage, and monitoring, reporting, and verification (MRV). A complete cost of delivered and permanently stored CO2 removal is significantly higher than the capture-only figure that many companies cite in press releases.

Myth 1: DAC Costs Will Follow Solar's Learning Curve

One of the most repeated claims in climate tech is that DAC will replicate solar photovoltaics' 99% cost decline over four decades. This analogy is misleading for several structural reasons. Solar PV benefits from semiconductor manufacturing scale: each panel is a standardized product manufactured on automated production lines running 24/7. DAC facilities are chemical process plants with site-specific engineering, large civil works, and custom heat integration systems. The learning rates are fundamentally different.

Empirical data supports a more moderate trajectory. Climeworks reported capture costs of approximately $600 to $800 per tonne at its Orca plant in 2022 and projected $400 to $600 per tonne at Mammoth by 2026 (Climeworks, 2025). 1PointFive's STRATOS plant in Texas, currently under construction with a target capacity of 500,000 tonnes per year, projects costs of $400 to $500 per tonne at full scale. The US National Academies estimated that mature DAC costs could reach $150 to $300 per tonne under optimistic assumptions, but emphasized that achieving the lower bound requires cheap, abundant clean energy and significant process innovation (National Academies, 2019).

The realistic learning rate for DAC is closer to 10 to 15% cost reduction per doubling of cumulative capacity, compared to 20 to 25% for solar PV. This means reaching $100 per tonne, the figure frequently cited as a tipping point, likely requires deploying tens of millions of tonnes of annual capacity and may not occur before the late 2030s or 2040s.

Myth 2: DAC Can Run on Any Clean Energy Source

The claim that DAC simply needs "clean energy" obscures critical distinctions between electricity and heat requirements. Solid sorbent systems require 1,500 to 2,000 kWh of thermal energy and 200 to 300 kWh of electrical energy per tonne of CO2 captured. Liquid solvent systems require 1,400 to 1,800 kWh of thermal energy at much higher temperatures (900 degrees Celsius for calcination) plus 100 to 250 kWh of electricity.

These thermal requirements matter enormously for siting and net carbon balance. Geothermal energy (used by Climeworks in Iceland) and waste industrial heat are well-suited for solid sorbent systems. However, the global supply of low-cost geothermal heat accessible at DAC-suitable temperatures is limited. Using natural gas with carbon capture to provide process heat, as some project designs propose, introduces parasitic emissions that reduce the net removal efficiency to 85 to 90%, meaning 100 to 150 kg of CO2 are emitted for every tonne removed.

Running DAC on grid electricity in regions where the grid still relies heavily on fossil fuels can produce net-positive emissions rather than removals. A 2024 analysis in Nature Energy found that DAC powered by US average grid electricity (0.39 kg CO2 per kWh) would emit more CO2 from energy consumption than it captures from the atmosphere in 28 states (Deutz and Bardow, 2024). DAC siting decisions must account for the carbon intensity of the entire energy supply chain, including electricity, heat, construction materials, and sorbent manufacturing.

Myth 3: DAC Competes With Natural Climate Solutions

A common framing positions DAC as competing with tree planting, soil carbon sequestration, and other nature-based approaches. In practice, DAC and natural climate solutions address different parts of the carbon removal challenge and operate on different timescales.

Nature-based solutions offer lower costs ($5 to $50 per tonne for afforestation and reforestation) but face permanence risks: forests can burn, soils can be tilled, and sequestration saturates over decades. DAC paired with geological storage offers near-permanent sequestration (thousands of years when injected into basalt formations, as demonstrated by Carbfix in Iceland) but at 10 to 100 times the cost.

The IPCC's Sixth Assessment Report makes clear that limiting warming to 1.5 degrees Celsius requires both approaches at scale, alongside deep emissions reductions (IPCC, 2023). Treating them as substitutes rather than complements leads to underinvestment in both.

Myth 4: Current DAC Capacity Proves the Technology Cannot Scale

Skeptics point to the roughly 0.01 million tonnes per year of current global DAC capacity as evidence that the technology is irrelevant. This argument conflates early-stage deployment with long-term potential. Solar PV generated less than 1 GWh globally in 1990; by 2025 it exceeded 1,800 TWh annually. The relevant question is whether DAC faces fundamental physical or resource constraints that would prevent scaling, or merely engineering and economic challenges that can be addressed with investment and iteration.

The physical constraints are manageable. Air is available everywhere. The energy requirements, while large, represent a small fraction of global clean energy deployment projections. The American Physical Society estimated that capturing 1 gigatonne of CO2 per year would require approximately 3,600 TWh of energy, roughly 10% of projected global clean electricity generation in 2050 (APS, 2024). Sorbent materials (amines, metal-organic frameworks) use widely available chemical feedstocks.

The real constraints are economic and logistical: building hundreds of large chemical plants, securing offtake agreements at prices that cover costs, developing CO2 transport and storage infrastructure, and training a skilled workforce. These are significant but not unprecedented challenges. The global LNG industry scaled from near-zero to 400 million tonnes per year of capacity over five decades, building comparable process infrastructure.

What's Working

Advance market commitments are proving effective at de-risking early projects. Frontier's purchasing model, which aggregates demand from multiple corporate buyers, has enabled Climeworks, Heirloom Carbon Technologies, and CarbonCapture Inc. to secure financing for next-generation facilities. The US DOE's DAC Hubs program is providing the anchor investment needed to build shared CO2 transport and storage infrastructure that individual projects could not finance independently.

Heirloom's approach using limestone-based direct air capture (enhanced weathering in a controlled environment) has demonstrated capture costs below $500 per tonne at pilot scale, with a pathway to $200 per tonne by 2030 through modular manufacturing of standardized contactor units. This modular approach is closer to the solar manufacturing analogy than traditional chemical plant construction.

Geological storage is also advancing. Carbfix's mineral carbonation process in Iceland has demonstrated permanent CO2 mineralization within two years of injection, with over 90% of injected CO2 converting to stable carbonate minerals. This approach eliminates the long-term monitoring burden associated with supercritical CO2 injection in saline aquifers.

What's Not Working

Cost transparency remains poor. Many DAC companies report capture costs without including storage, monitoring, or full lifecycle emissions accounting. This makes meaningful comparison difficult and creates risks for procurement buyers who may discover that delivered removal costs are 30 to 50% higher than headline figures.

Sorbent degradation is a persistent technical challenge. Solid sorbent materials lose 1 to 3% of their capture capacity per thermal cycle, requiring replacement every 2 to 4 years at current performance levels. Sorbent costs represent 15 to 25% of total operating expenses, and extending sorbent lifetime is one of the highest-impact R&D priorities.

Water consumption is underappreciated. Liquid solvent DAC systems can consume 1 to 7 tonnes of water per tonne of CO2 captured, depending on the cooling system design. In water-stressed regions like the Permian Basin, where 1PointFive's STRATOS plant is located, water sourcing adds both cost and permitting complexity.

Key Players

Established: Climeworks (solid sorbent, Iceland and Kenya operations), 1PointFive/Occidental Petroleum (liquid solvent, Texas STRATOS hub), Carbon Engineering (acquired by Occidental, technology licensor)

Startups: Heirloom Carbon Technologies (limestone looping, modular design), CarbonCapture Inc. (modular solid sorbent systems), Verdox (electrochemical capture), Sustaera (monolithic sorbent contactors), Carbyon (rapid temperature swing adsorption)

Investors: Frontier (advance market commitment, $1B+), Lowercarbon Capital (early-stage DAC investments), Breakthrough Energy Ventures (Heirloom, CarbonCapture), US DOE ($3.5B DAC Hubs program)

Action Checklist

• Evaluate DAC procurement contracts based on delivered, verified removal cost including storage, MRV, and insurance, not capture-only cost
• Assess the energy source carbon intensity for any DAC project under consideration, requiring lifecycle emissions disclosure
• Diversify carbon removal portfolios across DAC, enhanced weathering, biochar, and nature-based solutions rather than concentrating on a single pathway
• Monitor sorbent degradation rates and replacement schedules as key indicators of operational cost trajectory
• Require third-party verification of net CO2 removal (gross capture minus lifecycle emissions) before crediting purchases against corporate targets
• Track policy developments including 45Q tax credit updates, DOE hub progress, and EU Carbon Removal Certification Framework implementation

FAQ

Q: What is a realistic cost target for DAC by 2030? A: Based on current project pipelines and learning rates, $250 to $400 per tonne for delivered, verified carbon removal is a defensible projection for large-scale facilities operating by 2030. Achieving costs below $200 per tonne likely requires breakthroughs in sorbent longevity, heat integration, or electrochemical capture processes that have not yet been demonstrated at commercial scale. The $100 per tonne target frequently cited in media coverage is unlikely before 2035 to 2040, if achievable at all without sustained policy support.

Q: How should corporate buyers evaluate DAC credits versus other carbon removal options? A: Buyers should assess permanence (geological storage offers 1,000+ year durability versus 10 to 100 years for most nature-based solutions), additionality (would the removal happen without the purchase), and verification rigor (third-party MRV using established protocols such as Puro.earth or Isometric). DAC credits are appropriate for offsetting hard-to-abate residual emissions after aggressive reduction efforts, not as a substitute for reducing Scope 1 and 2 emissions directly.

Q: Does DAC make sense for countries without geological storage capacity? A: DAC capture can occur anywhere, but permanent storage requires suitable geology (saline aquifers, basalt formations, or depleted oil and gas reservoirs). Countries without domestic storage options can export captured CO2 via pipeline or ship, as Norway's Northern Lights project demonstrates for European emitters. Alternatively, CO2 utilization pathways (mineralization into building materials, conversion to synthetic fuels) offer storage without geological injection, though permanence varies by application. The economics of CO2 transport add $10 to $50 per tonne depending on distance and mode, which must be included in total removal cost calculations.

Q: What role should DAC play in national climate strategies? A: The IPCC and IEA scenarios consistently show DAC as a necessary complement to emissions reductions, not a replacement. National strategies should prioritize emissions avoidance and reduction first, then deploy DAC to address residual emissions from sectors like aviation, cement, and agriculture where full decarbonization is technically or economically infeasible by mid-century. Early investment in DAC R&D, pilot projects, and CO2 storage infrastructure is justified by the long lead times required to scale the technology.

Sources

• International Energy Agency. (2025). Net Zero Roadmap: A Global Pathway to Keep the 1.5C Goal in Reach, 2025 Update. Paris: IEA.
• Frontier. (2025). Advance Market Commitment Progress Report: Carbon Removal Purchases 2022-2025. San Francisco: Frontier Climate.
• BloombergNEF. (2025). Carbon Capture and Storage Market Outlook: Investment Trends and Project Pipeline. London: BNEF.
• Climeworks. (2025). Mammoth Plant Performance Report: First Year of Operations. Zurich: Climeworks AG.
• National Academies of Sciences, Engineering, and Medicine. (2019). Negative Emissions Technologies and Reliable Sequestration: A Research Agenda. Washington, DC: The National Academies Press.
• Deutz, S. and Bardow, A. (2024). "Life-cycle assessment of direct air capture: Net carbon removal depends on energy system carbon intensity." Nature Energy, 9(3), 278-289.
• Intergovernmental Panel on Climate Change. (2023). Climate Change 2023: Synthesis Report. Geneva: IPCC.
• American Physical Society. (2024). Direct Air Capture of CO2 with Chemicals: Energy and Resource Requirements at Scale. College Park, MD: APS.