As US bets big on carbon capture, Climeworks outlines necessity of removal technologies

Pictured: The Orca site in Iceland

Some climate scientists have concluded that large-scale carbon capture – whether man-made or nature-based – is needed at scale to avert the worst physical impacts of climate change due to historic and continuing emissions. The IPCC itself has stated that, by 2050, the world’s air-based carbon removal capacity should be 3-12 billion tonnes in a net-zero world. This would see carbon dioxide removal (CDR) solutions account for the any unavailable emissions following a 90% reduction globally by 2050.

One of the biggest movers in this nascent market is Climeworks, which hit the headlines in September 2021, when it opened its first direct air capture and storage plant (DAC), the first step on a broader ambition to scale-up and deliver multi-megaton capacity for carbon capture in the 2030s, rising to more than a gigaton capacity by 2050.

Climeworks currently operates 17 DAC plants, including one, Orca, which is operating on a commercial basis. Orca is based in Hellisheiði, Iceland and has a CO2 removal capacity of 4,000 tonnes per year.

Climeworks’ technology works by drawing air into a collector with a fan. Inside the collector, CO2 is filtered out. When the filter is full, the collector is closed and heated to release the CO2, ready for concentration and storage by storage partner Carbfix. The carbon associated with developing and operating the DAC facilities, Climeworks claims, is typically equivalent to 10% of the carbon that will be captured. This calculation considers the fact that the facilities are powered by renewable energy.

Speaking to edie at the Orca site, Climeworks’ spokesperson Bryndís Nielsen outlines her visions as to why DAC and CDR solutions are vital to reaching net-zero, but shouldn’t be a substitute for carbon reduction and nature-based solutions.

“We know what we need to do [globally] in terms of carbon reduction to stay within the targets for the Paris Agreement and we have to follow the science,” Nielsen tells edie. “But as we’re reducing emissions as much as possible we know that we also have to remove some carbon from the air and atmosphere.

“We only have a certain amount of land around the globe where we can grow forests and restore wetlands and we definitely should be doing that, but additionally, we need direct air capture as well. We can’t just rely on Mother Nature, she is not able to capture the emissions at the same rate that they’re being pumped out and we need to help her with technological solutions.”

Some studies claim that there is not enough land to meet global climate pledges, which rely heavily on the carbon offset markets and nature-based solutions and restoration. Indeed, the Land Gap Report in 2022 found that national climate pledges would collectively require 1.2 billion hectares of land. Nielsen argues that more modular solutions, like Climeworks DAC solutions could help remove emissions without taking up valuable amounts of land.

US expansion

With this in mind, the company has this week (19 April) unveiled plans to develop and support several large-scale DAC projects in the US over the next few years, following the success of its Orca operations in Iceland.

Climeworks has applied to participate in three hubs under the US Department of Energy’s $3.5bn “Regional Direct Air Capture Hubs”. Proposed hubs would be in Louisiana, California, and the Northern Great Plains, with each hub to set plans in place to deliver a megaton capacity by 2030.

The company claims the move will add to its workforce of more than 300 people across Europe, and will employ more than 100 people in the US in the short term. By 2030, Climeworks claims that thousands of direct jobs could be created as a result of the US-based DAC hubs.

The expansion into the US has been spurred by President Biden’s $369bn Inflation Reduction Act, which has increased the tax credits available for companies that can demonstrably capture and store carbon from $50 per tonne to $180 tonne.

But the company is still facing challenges. The aforementioned 4,000 capacity needs to expand exponentially, but costs associated with the technology are still high and are dissuading some investors. Reuters recently reported that it can cost upwards of $1,000 per tonne of captured carbon, but that some firms believe they can reduce this to $150 by the 2030s. The US Government is notably aiming for $100 per tonne.

The inevitable ties that carbon capture will have with oil and gas firms will also raise concerns about greenwashing, and Climeworks is moving to ensure the transparency of its work.

In a bid to differentiate itself from the various climate solutions aimed at investors and corporates Climeworks has this week published its stance outlining that CDR should be viewed as a separate entity from emission reductions.

Climeworks argues that industry standards and target setting need to “clearly distinguish” the different roles that CDR and emissions reductions can play. The main difference, Climeworks argues, is that credits from emission reduction efforts, such as offsetting, should “cease to exist” if net-zero is delivered in the 2050s, but that CDRs would still be required in a net-zero world to “neutralise residual and historic emissions to maintain net-zero CO2, and later on realise net-negative CO2 emissions globally”.

Climeworks currently provides third-party certified CDR services performed at the Orca site. The methodology was co-developed with Carbfix, which turns Climeworks’ captured carbon into minerals below the ground to permanently store it. The certification scheme was validated by DNV in 2022 which ensures that the removals were properly measured and reported.

Nielsen adds that this distinction would help overcome the “moral hazard” of relying too much on reduction credits when decarbonisation may not actually be taking place. Indeed, one in every five cases of corporate risk incidents linked to environmental, social and governance (ESG) issues stems from greenwashing and misleading communications.

“These are both things we need to be doing,” Nielsen adds. “Everybody needs to be reducing emissions, but it is important to identify that reducing and removing emissions are not the same thing. We need this distinction to avoid a moral hazard of confusing people, especially as people are foreseeing more big emitting companies buying credits and as part of their evolutions [and strategies[ and that’s not what Climeworks was founded on.”

Corporate interest

Climeworks has garnered a lot of media attention for its DAC plans, as well as a plethora of corporate supporters.

Microsoft, for example, first announced an intention to source carbon removal solutions from Climeworks in January 2021,  a year after pledging to achieve carbon-negative operations and supply chains by 2030. To achieve this 2030 goal, Microsoft – which is already carbon-neutral in operations – intends to halve emissions this decade and invest to offset and remove more carbon than it emits annually.

Climeworks has since entered into a ten-year purchase agreement with Microsoft, claiming at the time that it was “one of the largest” in the DAC space and will support the removal of “tens of thousands of tonnes of carbon dioxide from the atmosphere”. In total, Climeworks provides solutions for more than 160 companies.

The latest company is Partners Group a Swiss-based financial firm with more than $130bn in assets under management. Under the new agreement, Climeworks will remove more than 7,000 metric tons of CO2 from the atmosphere, to be permanently stored underground.

Partners Group, which co-led a £535m fundraising round for Climeworks in 2022 on behalf of its clients, is aiming to become a net-zero business by 2030.

Other corporate supporters of Climeworks include Ocado, Swiss RE, Audi, LGT and Stripe, the latter of which is spearheading a collaborative private sector commitment to scaling carbon capture technologies. Called ‘Frontier’, the collaboration is backed by $925m of commitments to purchase carbon removals using man-made technologies this decade.

Looking ahead, Nielsen believes direct air capture will act as a crucial tool in the efforts to reach net-zero, alongside nature-based solutions and ambitious and deep decarbonisation cuts.

“We know we need to halve emissions in the 2030s and net-zero will require at least a 90% cut in emissions after that,” Nielsen adds. “This is also, incidentally, how we should be dividing our tasks. So 90% of what we should be doing and enabling globally should be reducing emissions. But for that remaining 10% or so, we need to be retrieving emissions that we’ve been emitting since the Industrial Revolution.

“CDR solutions like direct air capture are a proven and effective way of dealing with those emissions and should be a key part of our future efforts.”