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Direct air capture is growing around the world, but more policy support is needed

July 14, 2022 Work Area: Carbon Capture

The Intergovernmental Panel on Climate Change (IPCC) recently reiterated the need for urgent action to mitigate catastrophic climate change. The report’s net-zero pathways include the use of direct air capture (DAC), a carbon removal technology that captures carbon directly from the atmosphere and stores it. According to the IPCC, we’ll need to first ensure significant emissions reductions through measures like improvements in energy efficiency and the advancement of decarbonization technologies. Point source carbon capture and storage can play an important role in this process by reducing significant amounts of emissions at heavy-emitting industrial facilities. 

In addition, methods to reduce atmospheric concentrations of carbon dioxide can both balance hard-to-abate non-point source emissions as well as draw down historic emissions that are currently warming the planet. Direct air capture helps us with both. The IPCC identifies DAC as an important carbon removal technology, and is relied upon in most mitigation scenarios.

How does direct air capture work? 

DAC is similar to capturing carbon from a point source, such as a factory or power plant, but works to remove carbon dioxide directly from the ambient air rather than from a smokestack. The point source carbon capture process typically uses tools called scrubbers with a liquid solvent or solid sorbent that binds with the CO2 in the flue gas. Heat is then applied to release the CO2 in a pure stream that can be compressed and transported to permanent storage such as saline aquifer formations or made into new products.  

Point source carbon capture and DAC have much in common. The scrubber technology is often used in both types of projects. Similarly, methods of transporting, injecting, and storing CO2 are the same for both DAC and point source capture. Finally, one method of supplying heat and power for a DAC facility is to use natural gas with carbon capture. These similarities allow innovation and advancement in one project type to drive innovation in the other. For these reasons, CATF considers direct air capture and point source carbon capture to fall under the same umbrella of carbon management.  

Where does direct air capture stand around the world? 

United States 

The U.S. has long been a leader in the carbon management space. Currently, the 45Q tax credit works to incentivize carbon capture and direct air capture by paying up to $50 per tonne of CO2 sequestered in saline storage formations. Originally passed in 2008, the credit was reformed in 2018 to make it more accessible to project developers. Since then, CATF has been tracking the unprecedented interest in new carbon management projects on our interactive map.  

In 2021, the U.S. enacted the Infrastructure Investments and Jobs Act (IIJA). This bipartisan infrastructure law included several provisions that support DAC. The IIJA provides funding needed to expand CO2 transport and storage capabilities. It creates a low-interest loan program for CO2 transport infrastructure as well as funds the EPA for Class VI well permitting (for injection of CO2 into storage formations), provides FEED grants, and builds upon the CarbonSAFE program with a Department of Energy (DOE) cost share. Finally, the package includes grants for four DAC hubs and a technology prize competition. 

The DOE is also leading an all-hands-on-deck effort known as the Carbon Negative Shot. The purpose of which is to position the U.S. as a leader in research, manufacture, and demonstration of carbon removal technologies such as DAC. The Department of Energy also announced $14.5 million in available funding for low-carbon energy to scale up DAC. The funding opportunity will facilitate engineering studies of DAC systems capable of removing at least 5,000 tonnes of CO2 per year and are coupled with existing low-carbon energy. President Biden also launched the formation of the First Movers Coalition, a partnership between the World Economic Forum and the U.S. Office of the Special Presidential Envoy, at COP26. This coalition of companies that will work to innovate green supply chains and scale new decarbonization technologies, which includes direct air capture.  

CATF is currently working with its partners to enhance the 45Q tax credit to enable more projects to get off the ground. These provisions include increasing the credit value to $180 per tonne (saline storage) for DAC, allowing for direct payment, reducing the minimum capture threshold of an eligible facility to 1,000 tonnes per year, and extending the commence construction deadline to 2032. Finally, CATF is calling for the 45Q tax credit to be indexed for inflation, to prevent the erosion of almost 30% of the credit’s real value by 2026. These policies will ensure these projects and others are developed and deployed at scale to help avoid the worst impacts of climate change. 


In comparison to the U.S., carbon management has been slower to develop in Europe, largely due to the lack of a strong, supportive policy framework, which has resulted in a lack of CO2 storage site development and available funding. However, there are signs this is beginning to change. The most recent amendment to the trans-European networks for energy (TEN-E) regulation included support for a cross-border carbon dioxide network, enabling funding for CO2 capture and storage as a priority. This development followed a dedicated campaign co-led by Clean Air Task Force and Bellona to highlight the importance of such a network to achieving European climate goals. Furthermore, the EU Innovation Fund, designed to provide over €10 billion euros for the demonstration of innovative low-carbon technologies included four carbon capture and storage projects of the seven recipients in its most recent large-scale call. 

However, direct air capture does not feature in Europe’s 2030 target of 55% reduction in greenhouse gas emissions, meaning policies to achieve these targets do not yet accommodate negative emissions technologies. Direct air capture therefore faces considerable barriers in creating a business case. The EU Emissions Trading System (ETS), which covers approximately 40% of greenhouse gas emissions through a cap and trade system, could provide an incentive for carbon removal technologies in the long term. Currently, the EU ETS does not permit the inclusion of carbon removal technologies, although debate of whether and how carbon removal technologies could be integrated has gained increasing attention of late. Still, at the current ETS allowance prices of about €80, the ETS alone cannot sufficiently support the business case for direct air capture. 

There are, however, important initiatives which the EU and its Member States can take in order to advance direct air capture and other carbon removal methods. A critical first step to create a long-term business case for direct air capture in Europe will come in the form of the Carbon Removal Certification Mechanism (CR CM) which will result in a regulatory framework to certify the verified removal of CO2. The CR CM will be the first-of-its-kind regulatory framework and will enable a variety of carbon removal methods, including direct air capture, to achieve greater regulatory certainty. Ensuring that the CR CM includes strict criteria and guiding principles to certify permanent carbon removals will be essential.  

In the longer term, for negative emissions technologies like direct air capture to scale, EU climate policy will have to integrate carbon dioxide removal as part of emissions targets for 2040 and the overall target of climate neutrality by 2050.  Developing an EU strategy for carbon management will be an important step in providing the political vision needed to scale various carbon capture technologies. In the longer term, the inclusion of direct air capture in the EU and in international accounting rules will be important to filling the gap and ensuring environmental integrity. The CR CM will therefore play a critical role in this process. 

Principles guiding carbon dioxide removal certification

Private Capital  

The joint ambition of DAC companies and private investment has expanded tremendously in 2022. In April, Frontier, a consortium led by Stripe, Google, Shopify, Meta, and McKinsey committed $925 million in an advance market commitment to move forward a variety of permanent carbon removal methods. The initiative is designed to support innovators seeking to scale their permanent carbon removal methods by providing a guaranteed purchase once they have verified the permanent removal of CO2 from the atmosphere. This announcement was followed by 1PointFive and Carbon Engineering declaring their ambition to have 70 DAC facilities in operation worldwide by 2035. 

Direct Air Capture Projects 

When it comes to putting steel in the ground, DAC has lagged behind point source carbon capture, but projects are continuing to be announced and to go into operation. In the table below, direct air capture projects are concentrated in Europe, the U.S., and the MENA region. Presently, operational facilities remain relatively small and concentrated in Europe. In the fall of 2021, the largest operational facility went into operation in Iceland, removing up to 4,000 tonnes of CO2 per year, although Climeworks has recently begun construction of a new facility, Mammoth, which will remove 36,000 tonnes of CO2 per year. Earlier this year, the U.S. Department of Energy announced funding for initial studies for five DAC projects.  

In order to reach the level of removals needed to mitigate the worst impacts of climate change, a rapid scale up in operational capacity is needed. Carbon Engineering is planning three facilities with the ability to remove up to one million tonnes of CO2 per year. More large-scale projects are certain to be announced soon. In the U.S., the IIJA funded four direct air capture hubs through a program that the Department of Energy is currently developing. These initial projects take on the important work of driving down costs through the development of shared infrastructure, innovation, and learning. With the growing interest in DAC from private capital and the potential enhancement of 45Q in the U.S., the potential impact of this critical climate technology is massive. 

Entity Country CO2 Status Capacity (tonnes/year)
Carbon Engineering Canada Use Operating 365
Climeworks Germany Use Operational 50
Climeworks Germany Use Operational 50
Climeworks Iceland Storage In development 36,000
Climeworks Iceland Storage Operational 4,000
Climeworks Iceland Storage Operational 50
Climeworks Italy Use Operational 150
Carbon Engineering Norway Storage In development 1,000,000
Climeworks Oman In development
Climeworks Switzerland Use Operational 50
Climeworks Switzerland Use Operational 900
Climeworks Switzerland Use Operational 600
Carbon Engineering Scotland Storage In development 1,000,000
Carbon Engineering Texas, U.S. In development 1,000,000
Battelle Alabama, U.S. In development
Climeworks California, U.S. In development
Carbon Engineering Illinois, U.S. In development
CarbonCapture Inc Indiana, U.S. In development
AirCapture LLC Washington, U.S. In development
Global Thermostat U.S. Operational 500
Global Thermostat U.S. Operational 1,000

Further information on projects can be located via IEA, Carbon Engineering, and CATF 

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