Faber is the founder of Carbon-Based Consulting, Merchant is founder and managing director of Carbon Curve and McQueen is co-founder and head of research at the direct air capture company Heirloom. You can reach them athello@heirloomcarbon.com.
It’s odd to work every day developing an industry we wish didn’t have to exist. But that’s exactly what we’re doing. Each morning, we wake up and consider the different ways to pull carbon dioxide from the atmosphere—and the technical and economic feasibility of those methods.
One of the most promising approaches is direct air capture (DAC), a suite of technologies that use materials such as specially engineered sorbents or limestone rocks to suck already-emitted CO2 from the atmosphere. Pairing this technology with permanent storage locks that carbon away so it no longer contributes to warming.
Some experts argue DAC is distracting from the need to quickly and rapidly decarbonize every sector of our economy. Thirty years ago, we would have agreed with them.
But over the last three decades, we’ve released half of all the CO2 emitted since 1750 and we continue to emit over 35 billion tons of the gas each year. Carbon removal will be required to pull us back from the brink of climate disaster.
Under best-case emissions reductions scenarios, we’ll still need to remove six to 10 billion tons of already-emitted CO2 per year to keep warming below 1.5°C and to compensate for hard-to-abate emissions from industries like agriculture and aviation.
We’ve backed ourselves into a corner—we need to stop emitting CO2 and take it out of the atmosphere.
Deploying DAC at the scale needed to meaningfully address climate change will only be possible if the technologies are economically viable. In the industry, $100 per ton of CO2 removed from the atmosphere is widely considered the threshold for economic viability.
Some DAC systems currently report costs near $1,000 per ton of CO2 removed. This price tag is well above both the threshold and the cost of many other kinds of decarbonization, like replacing emissions-intensive coal plants with renewable electricity.
Operating a DAC system involves many costs, including equipment, materials and labor. One of the largest cost drivers, however, is the energy required to pull CO2 from the atmosphere. Theoretically, the minimum amount of energy required to remove one metric ton of CO2 from the air is 125 kilowatt hours (kWh), about the same amount of energy as it takes to power a 50-watt light bulb for the better part of a year.
No DAC technology is 100% efficient (meaning the technology uses the same amount of energy as the minimum 125 kWh to pull carbon from the air). But a system with 10% efficiency is possible. Many energy sources today are much more efficient; wind turbines, for example, can be 30 to 45% efficient.
At 10% efficiency, the expected amount of energy required to remove a ton of CO2 is 1,250 kWh. If we assume an electricity price of roughly $0.045/kWh—consistent with average U.S. renewable electricity prices in the third quarter of 2022—the minimum cost to remove one ton of CO2 is $56. That’s at today’s price, which does not factor in the predicted continued decline in the cost of renewable energy.
With declining electricity costs, reasonable carbon removal costs are more than possible.
The math (and existing literature) suggests the cost of DAC could drop from today’s prices by a factor of 10. Industry precedent also supports this assertion. For example, in 1976, solar photovoltaic modules cost over $106 per watt. In 2019, the cost dropped to around $0.4/W. This more than 99% drop is one of many examples.
With every ton of CO2 we remove from the atmosphere, we are learning how to do it even better. Many factors will determine how cost changes as the technology scales: investing in research and development, implementing manufacturing improvements and achieving economies of scale.
If the time comes when greenhouse gas emissions have been reduced to zero and enough CO2 has been pulled from the atmosphere to restore balance to our climate, we’ll happily cheer as DAC technologies are relegated to the history books.
Until then, direct air capture will be a key part of saving our planet.
Editor’s note: Heirloom’s investors include Breakthrough Energy Ventures, a program of Breakthrough Energy, which also supports Cipher.
Lunchtime Reads and Hot Takes
‘Over My Dead Body’: Backlash Builds Against $3 Trillion Clean-Energy Push — The Wall Street Journal Amy’s take: This sentiment argues in favor of an approach utilizing all clean energy sources given backlash grows in proportion to the growth of any particular energy source.
COP28 team marshals oil and gas industry alliance ahead of climate summit — Financial Times (paywall)
Anca’s take: Tensions at the COP27 in Egypt were nothing compared to what we can expect in the United Arab Emirates this year.
US Senate Votes to Restore Solar Tariffs Up to 254% in Biden Rebuke — Bloomberg
Amena’s take: Although President Biden plans to veto this binding resolution, it underscores a rift between the U.S. Congress and the White House over pursuing renewable energy development.
Amena’s take: An insightful look at how BlackRock CEO Larry Fink’s embrace of energy transition financing has translated into a culture war waged by conservatives.
More of what we're reading:
4 big questions answered about EPA’s power plant rules — E&E News
Fossil Fuel Influence on US Supreme Court Is Pervasive, Whitehouse Says — Bloomberg
The thinking error that makes people susceptible to climate change denial — The Conversation
The investment boom in ‘renewable natural gas’ is sparking debate — Canary Media
DATA DIVE
Economic headwinds slow climate tech investments
Source: PitchBook • 2023 data complete through May 8.
The amount of money going into climate and cleantech venture capital investments so far this year is nearly a quarter less than at this time last year, according to new PitchBook data shared exclusively with Cipher.
The chart above illustrates the impacts of both acute and broad economic challenges facing this sector.
These challenges include the ongoing aftermath from the collapse in March of Silicon Valley Bank, which has been the lender of choice for many cleantech startups. At a more macro level, persistently high interest rates and inflation are also weighing on the space and the economy writ large.
AND FINALLY...
Tiny turbines
Anca snapped this photo in April on her way to northern Denmark. It's a huge contrast to see wind turbines dotting the fields from above and later to stand underneath one of those gigantic installations (an experience Anca will share more about later). Denmark obtained 44% of its electricity needs from wind energy in 2021.
Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.
Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.
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