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Edit | Su Jianxun
In a desolate suburb of Iceland, several rows of giant fans are activated at the same time, making a sound like running water.
These are not ordinary fans. When the fan blades stir the air outdoors, the whole device can directly capture carbon dioxide from the air - the air is sucked into a special collection tank, where the carbon dioxide reacts with the solid adsorbent and remains and the remaining gas is sent back into the air.
Carbon capture company Climeworks has a carbon-capture plant in Iceland. Source: Climeworks official website
This technology is intuitively named "Direct Air Capture" (DAC). The carbon-harvesting plant in Iceland is the world's first large-scale DAC plant capable of capturing up to 4,000 tons of CO2 per year.
In the field of CCUS (carbon capture, utilization and storage), there are two main paths, depending on the source of carbon dioxide: carbon capture and storage (CCS) and direct air capture (DAC). The former is also known as "flue gas capture", that is, carbon capture from industrial exhaust gas, and the current technology maturity is higher; The latter, as the name suggests, is a new generation of carbon capture technology derived from natural air.
A lot of hot money is pouring into DACs. On August 11, local time, the U.S. Department of Energy announced that it would invest $1.2 billion to subsidize two local DAC projects. Less than a week later, Servant Oil, Brother Buffett's investment, announced its acquisition of Canadian DAC company Carbon Engineering for $1.1 billion.
Two large capital blessings suddenly brought DAC technology from behind the scenes to the spotlight. Capturing carbon directly from the air sounds sci-fi, subversive and topical – more people are paying attention to the value of DAC, and controversy is also ensuing.
01 Government and enterprises pay more, what is the charm of DAC?
Carbon neutrality is like a scale, with carbon sources (carbon emissions) and carbon sinks (carbon removal) at both ends, seeking positive and negative offsets. Most people are working on the carbon source side to reduce carbon emissions through clean energy transition and energy-saving technologies.
But this is not enough. According to the IPCC, without carbon removal, it will be difficult to meet the Paris Agreement's climate goal of limiting warming to 1.5 degrees Celsius.
To solve the climate problem, you can't put all the eggs in the same basket. According to the International Energy Agency's Direct Air Carbon Capture 2022 report released last year, to achieve net-zero emissions by 2050, the world needs to capture more than 85 million tons of carbon dioxide from the air by 2030 and nearly 1 billion tons of carbon dioxide by 2050.
That is to say, under the objective reality that fossil energy cannot be completely abandoned and zero carbon emissions cannot be achieved for a while, DAC is indispensable in the combination of carbon neutral technology - although it is not the protagonist, there are many key scenes. This has driven the global popularity of DAC carbon negative technology.
The U.S. government spent $1.2 billion on DACs, taking advantage of the project's carbon removal benefits. According to U.S. officials, once operational, the two projects are expected to remove more than 2 million tons of carbon dioxide from the air each year, equivalent to reducing the carbon emissions of nearly 500,000 fuel vehicles on the road.
The U.S. government is betting more on DACs than that. They plan to build two more DAC centers in the future, with a total investment of $3.5 billion in four projects. Officials say the projects, when completed, could help the U.S. achieve net-zero greenhouse gas emissions by 2050.
According to the International Energy Agency, between 2020 and 2022, governments committed nearly $4 billion to earmark DAC project development and deployment. At present, more than 20 DAC projects have been completed or under construction around the world, and Canada, the United States, and Europe are all countries and regions with developed commercial deployment of DAC projects.
Capital markets and large corporations are also eyeing the carbon reduction potential of DACs. The company behind Iceland's DAC factory, called Climeworks, is the star company on the carbon capture track, raising $650 million last year.
Although Climeworks is still a startup, it has a "star-studded" client list. Microsoft, Swarovski, Shopify, PwC... Well-known companies in different industries have signed carbon removal purchase agreements with Climeworks, hoping to offset their carbon emissions and meet their climate commitments.
Another iconic company on the DAC track is Carbon Engineering, which has been working with Occidental for the past few years to provide carbon capture technical support for its oil projects. In addition, the aviation industry, including Airbus and Air France-KLM, is a major customer group of Carbon Engineering, and airlines are looking to buy carbon credits for DAC projects to achieve decarbonization goals.
Carbon Engineering's DAC project factory. Source: Carbon Engineering's official website
From the perspective of CCUS "U", that is, carbon utilization, the application value of DAC is more imaginative.
In addition to being used in oil displacement scenarios in the oil industry, carbon dioxide captured from the air can also be used to manufacture and produce various products such as synthetic fuels, plastics, methanol, and concrete, improving the "green content" of products and helping enterprises achieve green goals. Porsche, for example, recently announced that it sees DAC as an important emerging technology for energy extraction and is considering integrating DAC facilities into its eFuels pilot plant in Chile, where the synthetic fuel to be used in the future comes from carbon dioxide captured in the air.
Turning the perspective to China, DAC is currently in its infancy in China, and China is accelerating the innovation and engineering of DAC.
At the "First DAC Technology Seminar" held on August 22, Professor Wang Tao of Zhejiang University introduced that the implementation plan of "dual carbon" in Zhejiang, Shanghai, Shanxi and other places clearly proposed to strengthen the research and development of DAC technology. In addition, energy companies such as PetroChina, China Energy Construction Co., Ltd., and Huaneng Group have deployed DAC technology and prototype development.
02 Define the "carbon price ceiling", the price of success and the price of failure
Like many emerging technologies, DAC's tech story sounds sexy, but the road to commercialization has stumbled.
It is expensive and an "original sin" that hinders the commercial viability of DACs. Limited by high costs, CCUS technology has been "applauded" and has not yet achieved large-scale commercialization. In the already expensive CCUS field, DAC is "expensive on expensive".
The concentration of carbon dioxide directly affects the cost of capture, and the higher the concentration, the lower the cost. The concentration of carbon dioxide in the air in nature is much thinner than that of industrial flue gas, and the capture environment is more uncontrollable. This makes DAC not only difficult to use itself, but also greater capture material input and energy demand, and multiple factors pile up the overall cost - DAC is known as the "carbon price ceiling".
Even Climeworks, a leading company in the industry, costs $600 to $800 per ton to capture carbon directly from the air. In Wang Tao's view, the spiral of emerging technologies and scale can promote a significant reduction in DAC costs.
The degree of cost reduction is a key inflection point for DAC commercialization. According to a report released by Boston Consulting Group in May, the cost of DACs needs to be reduced by at least 75% to be commercialized. In the United States, the price of $200 per ton has become competitive in the market. Many industry scholars believe that when the price of DAC is reduced to less than $100 per ton, it will be a subversive price.
Cost is certainly a short board for DAC to go to the market, the other side of the coin, it also stimulates technological innovation - the so-called "carbon price ceiling", which determines the commanding heights of the future voluntary carbon market price, who has the ability to take the lead in breaking through the cost reduction route, will grasp the initiative to define the carbon trading price to a certain extent, and attract more corporate customers with price advantages.
In fact, the controversy over DACs is not just at the cost level. The high energy consumption and capture efficiency required to capture carbon directly from the air are the focus of doubts from the outside world, and some people worry that it will become a shelter for high-carbon emission industries. These challenges are all insurmountable questions in the development of DACs.
The technology is sexy and the demand is clear, but DAC still needs a lot of time and patience to truly unlock business value. How long the journey will be depends on the combination of technology, policy and markets.