IDTechEx Research Report Explores Direct Air Capture's Pathway to the US$100/Tonne Target

BOSTON, May 1, 2025 /PRNewswire/ -- To reach net-zero by 2050 targets, billions of tonnes of additional carbon dioxide removal (CDR) will be needed in parallel with emissions reductions. From the broad range of carbon dioxide removal solutions benchmarked in new report from market intelligence firm IDTechEx, "Carbon Dioxide Removal (CDR) 2025-2035: Technologies, Players, Carbon Credit Markets, and Forecasts", direct air capture (DAC) is among the most promising for delivering large-scale removals. But, as of today, it is simply too expensive.

>> In Other News: Aemetis Biogas Completes $1.6 million of LCFS and D3 RIN Sales in April

Eve Pope, Senior Technology Analyst and author of the report, explains: "In the CDR space, a capture cost of US$100/tonne of CO₂ removed is the eventual industry target because widespread adoption could be achieved from governments and corporations alike at this level. However, direct air capture costs demonstrated so far are closer to US$1000/tonne of CO₂."

Direct air capture has been scaling up fast. In 2024, DAC pioneer Climeworks inaugurated the world's largest direct air capture facility, removing 40,000 tonnes per year of CO₂ from the atmosphere. Meanwhile, 1PointFive's Stratos facility (scheduled to come online in 2025) aims to capture carbon dioxide on the megatonne per annum scale.

As DAC plants grow bigger, supply chains can be established and fixed costs can be spread over larger volumes of CO₂, leading to cost reductions. IDTechEx's report, "Carbon Dioxide Removal (CDR) 2025-2035: Technologies, Players, Carbon Credit Markets, and Forecasts", covers cost estimates for DAC and includes key lessons from DAC pioneers for building supply chains. For example, Carbon Engineering (the company originally behind Stratos' liquid solvent DAC approach) based its DAC air contactor design on existing industrial cooling towers. By adapting industrial equipment and collaborating with existing suppliers, rapid scale-up has been enabled.

Further improvements, beyond scaling up to larger facilities, will be needed to bring DAC capture costs closer to the US$100/tonne of CO₂ goal. These cost reductions are expected to come from technology innovations. For the leading DAC technologies, which are temperature-based, popular approaches include developing semi-continuous sorbent processes or finding liquid solvents that can be regenerated at lower temperatures (~100°C). These improvements can lower the overall energy demand of DAC, which can be a major contributor to capture costs.

A more disruptive approach involves pivoting to electrochemical methods of DAC. This could unlock better energy efficiency and flexibility with intermittent renewable energy sources such as wind and solar. While at an earlier stage than temperature-based DAC, there are now several innovative start-ups in this space, including Carbon Blade, Parallel Carbon, and Yama, seeking to lower capture costs through their electrochemical DAC technologies.

Despite the high capture costs of today, DAC is in a good position. In North America, DAC players can access Canada's Investment Tax Credit (covering 60% of DAC capital expenses) or the United States' 45Q tax credit (worth US$180/tonne of CO₂ captured using DAC technology, which has so far weathered the uncertainty of the Trump administration). For now, this financial support from governments can bridge the gap between the US$100/tonne goal and current cost realities.

Voluntary markets provide the rest of business model viability through the sale of carbon credits. For example, in 2024, Microsoft announced a deal to purchase 500,000 tonnes of CO₂ removal from the large-scale Stratos DAC facility. Later down the line, the long-term success of DAC will depend upon its inclusion in broader global compliance carbon markets, with mechanisms for Article 6.4 of the Paris Agreement starting to lay the foundation.

To find out more about this report, please visit www.IDTechEx.com/CDR. For the full portfolio of related research available from IDTechEx, please see www.IDTechEx.com/Research/Energy.