In the CDR space, a capture cost of US$100/tonne of CO2 removed is the eventual industry target because widespread adoption from governments and corporations alike could be achieved at this level. However, direct air capture costs demonstrated so far are closer to US$1000/tonne of CO2. This article explores possible pathways to lower capture costs based on IDTechEx’s research into leading DAC technologies.
If the costs of direct air capture technologies are lowered, IDTechEx predicts widespread adoption of this technology to meet sustainability goals. Source: IDTechEx
Leveraging economies of 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.
DAC technology innovation is still ongoing
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 (~100oC). 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.
Outlook
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.
