DAC Pivots to Power: Carbon Tech Finds New Revenue

The direct air capture industry is undergoing a transformation that's reshaping how carbon removal companies stay profitable. With costs still above $500 per ton and policy uncertainty growing, DAC developers are racing to diversify beyond carbon credits alone. The shift is strategic, pairing atmospheric CO2 removal with everything from data center electricity to sustainable fuel production.

This isn't just survival mode. Companies are proving that carbon removal can support entirely new business models while scaling technology that the world desperately needs. The pivot comes at a critical moment when government funding faces scrutiny and the voluntary carbon market remains volatile.

>> RELATED: How Direct Air Capture Could Drop 75% in Cost

Why Pure Carbon Credit Models Face Pressure

Traditional DAC facilities remove CO2 but generate zero operational revenue on their own. Income flows entirely from selling verified removal credits, leaving companies vulnerable to market swings and shifting policies. The model worked when federal support seemed guaranteed, but recent changes have forced a rethink.

The U.S. government's 45Q tax credit remains in place, but broader funding cuts in early 2025 put $7.56 billion worth of clean energy projects under review. DAC developers who counted on predictable support now face questions about long-term viability. Companies are responding by building revenue streams that don't depend solely on climate policy.

Spiritus Launches Power Generation Platform

Spiritus made headlines in October 2025 by launching Orchard Power, a platform pairing natural gas turbines with point-source carbon capture and DAC technology. The system uses waste heat from power generation to drive carbon removal units, creating a dual revenue model. The first deployment will supply 1.5 gigawatts of firm power to a carbon-negative data center campus in Wyoming.

This approach gives Spiritus a steady income from electricity sales while removing atmospheric carbon. It's designed for AI companies needing massive power loads but also facing pressure to meet climate commitments. The New Mexico-based company recently raised $30 million in Series A funding led by Aramco Ventures, with backing from Khosla Ventures, Mitsubishi Heavy Industries America, and TDK Ventures.

The funding will support three major facilities, including a 1,000-ton pilot in New Mexico and the massive Orchard One project in Wyoming. Spiritus is targeting carbon removal costs under $100 per ton, a breakthrough that would make DAC commercially competitive. The company's sorbent technology captures CO2 passively without energy-intensive fans, then uses low-temperature desorption to release it.

>> In Other News: UN Endorses First Article 6.4 Carbon Credit Methodology

Climeworks Builds Portfolio Strategy

Climeworks, the Swiss DAC pioneer, took a different route by introducing Climeworks Solutions in 2024. The service combines DAC with other carbon removal methods including biochar, enhanced rock weathering, and bioenergy with carbon capture. Corporate buyers access multiple removal types at a blended, lower average cost.

In September 2025, Climeworks announced its largest portfolio deal yet with Schneider Electric, covering 31,000 tons of carbon removal credits through 2039. This approach helps maintain revenue while working to reduce DAC costs. The strategy acknowledges that diverse removal methods can serve different customer needs and price points.

Climeworks continues pushing technological boundaries with its Generation 3 DAC system. The new design cuts energy use by 50% while doubling CO2 capture capacity compared to earlier versions. Material lifetime increased threefold, and the company projects costs of $400 to $600 per ton net removal by 2030.

Integration with E-Fuels Production

Other companies are integrating DAC with fuel production from day one. Aeon Blue, a Canadian startup, combines hydrogen production and carbon capture in a single saltwater electrolyzer. The system produces synthetic drop-in fuels while overcapturing CO2 for permanent storage.

For every ton of Aeon Blue's fuel produced, the company removes three tons of CO2 and prevents seven more by displacing fossil fuels. The first pilot facility in Nova Scotia is scheduled to begin operations in 2026. Revenue from fuel sales supports the carbon removal operation, creating a self-sustaining business model.

North American Companies Adding Coproducts

Several developers have built hybrid revenue models into their technology from the start:

1. Avnos: Captures water alongside CO2 in its hybrid humidity DAC system, producing five tons of distilled water per ton of CO2 removed
2. Greenlyte Carbon Technologies and Parallel Carbon: Both pair DAC with hydrogen production for dual revenue streams
3. Skytree: Evolved from air purification to supplying CO2 and water for e-fuel projects
4. Carbon Utility: Produces green hydrogen through electrochemical air capture

Why Timing Matters for This Shift

This business model evolution coincides with increased investor selectivity as the sector matures. Companies demonstrating multiple revenue streams are better positioned to secure financing and attract corporate buyers. Energy-intensive industries like data centers, aviation, and manufacturing want carbon removal paired with other services.

Federal funding uncertainty makes the case even stronger. Projects that generate income from established markets like electricity, hydrogen, or water can finance carbon removal operations more reliably. This financial stability enables faster deployment and continued technology improvement.

What This Means for Industry Scale-Up

This business model innovation represents the maturation of the carbon removal sector. Companies are moving beyond pure-play removal to become integrated climate solutions providers. They're recognizing that profitability requires serving multiple markets simultaneously, not waiting for carbon credit prices to reach break-even levels.

The hybrid approach addresses a fundamental scaling challenge. Revenue from products with established markets finances carbon removal operations more reliably than credits alone. This stability enables the rapid deployment and technology iteration needed to bring costs down to truly competitive levels.

As the industry evolves, expect more DAC developers to follow this playbook. Success will belong to companies balancing carbon removal with commercial viability, proving that climate action and profitable business aren't mutually exclusive. The integration of removal technology with existing industrial processes may be what finally unlocks gigaton-scale deployment.