In a geothermal park in southern Iceland, four large-scale carbon dioxide capture plants will soon be operational. Developed by the Swiss startup Climeworks, the rigs are designed to extract carbon from the air and pump it deep underground, turning it into solid rock. This technology, called direct capture, is currently considered one of the most advanced in greenhouse gas capture. With its help, CO2 removed from the air can be stored for thousands of years, Financial Times states.
In addition, this development allows creating “carbon offsets”, i.e., credits for CO2 extracted from the air or emission reductions purchased by both companies and individuals looking to reduce their carbon footprint.
If a company cannot reduce its CO2 emissions through better technology or better management, it can “outsource” emissions reductions by purchasing carbon credits. The company thus pays for emission reductions or CO2 capture elsewhere, thereby offsetting its emissions.
“Why Iceland? Because here, carbon dioxide, due to specific conditions, can react very quickly with underground rocks and turn into stone,” explains Daniel Egger, director of marketing at Climeworks. Of all the available forms of carbon offsets, this technology is also one of the most expensive globally – about €1,000 per tonne of CO2.
However, there is now an increase in the popularity of carbon offsets in general, regardless of their form. More and more companies are striving for zero emissions, but they are not succeeding in eliminating all of them. Therefore, they will have to purchase carbon credits to compensate. Today, the global carbon offset market is around $400 million a year, according to public registries, and it continues to expand.
However, carbon offset in the form of carbon credits, which appeared back in 1997 after the signing of the Kyoto Protocol, can be very difficult to implement. Many projects in the sector have not yet achieved the promised level of CO2 capture.
Climeworks has joined a growing army of startups developing a new approach to carbon offsets. It primarily aims to permanently remove and capture CO2 as opposed to more traditional projects such as reforestation and landscaping.
“We need technical solutions [like this] to meet our climate targets,” says Egger. – Natural solutions [like landscaping and planting trees] often have limited CO2 storage capacity. In 50 years, everything that we have caught from the air will come back.” He said that trees are very efficient at capturing CO2, but as soon as the wood begins to decompose, the carbon returns to the atmosphere.
Among carbon offset projects, there are still very few options to remove CO2 from the air permanently. A recent study by the consultancy Carbon Direct found 1.1 billion carbon credits in official registries, and none of the registered projects offer permanent capture.
Nevertheless, wealthy investors are interested in this approach, and their number is gradually growing. Microsoft was one of the first to express its desire to acquire carbon credits from Climeworks. Microsoft President Brad Smith is convinced that this kind of support will enable emerging technologies to evolve.
“In fact, we are creating a new market; we are building a new market where there was no trace of it before,” he notes. “This is how we set the right direction of movement.”
Other tech giants are also actively supporting some advanced forms of carbon offsets. Stripe, the creator of the payments system of the same name, is investing $1 million in a portfolio of cross-border carbon capture projects that include technologies for pumping CO2 into cement, capturing and storing CO2 in limestone rocks on the ocean floor, and buying carbon offsets from Climeworks.
“In this way, we are helping to reduce the cost of these technologies,” said Nan Ransohoff, director of climate change at Stripe. He adds that funding is only the first stage: “This industry will need a lot more to grow to the desired scale.”
New projects related to carbon offsets are already being developed this year. This work has intensified, especially in the run-up to the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP-26), which will be held in Glasgow this November. Leaders from all over the world will gather there to agree on the terms of developing the global emissions market. If approved, such a system would help create an international carbon trading mechanism.
However, there are many critics of carbon offsets, and they are all concerned that this practice could become a kind of “fig leaf” to cover up inaction. In their opinion, companies need to, first of all, think about how to reduce their own CO2 emissions.
Inger Andersen, executive director of the United Nations Environment Program, argues that offsets must be “transparent, independent, and subject to the strictest scrutiny,” otherwise there will be no point in them. “We saw very real offsets, but we also saw simulated climate care that didn’t translate into meaningful results,” she says.
Even with the current growth of the carbon offset market and the growing list of companies working on permanent carbon capture techniques, the overall investment in these technologies is still poor. According to Jonathan Goldberg, founder and CEO of Carbon Direct, the current level of funding is not yet able to meet the climate targets. “A lot more capital investment is needed if we want carbon capture to scale,” he says. “Interest in the development of technologies for capturing CO2 is growing, and more and more companies are adopting these technologies.
World’s biggest ‘direct air capture’ plant started pulling in CO2 in September
The start-up behind the world’s most giant direct carbon capture plant said it would build a much larger facility that would permanently remove millions of tonnes of carbon dioxide from the atmosphere in the next few years.
As Zurich-based Climeworks opened its Orca “direct air capture” project in Iceland on Wednesday, co-chief executive Jan Wurzbacher told the Financial Times it had started design work on a facility ten times larger than would be completed the next few years.
Orca will collect about 4,000 tonnes of CO2 a year and store it underground — a tiny fraction of the 33bn tonnes of the gas forecast by the IEA to be emitted worldwide this year, but a demonstration of the technology’s viability.
“This is the first time we are extracting CO2 from the air commercially and combining it with underground storage,” Wurzbacher said.
The Orca plant sells the most expensive carbon offset globally, costing as much as €1,000 a tonne of CO2 removed and counting Microsoft founder Bill Gates among its customers.
Wurzbacher said commercial demand had been so high that the plant was nearly sold out of credits for its entire 12-year lifespan, prompting the accelerated development of the much larger plant using the same technology.
Orca’s other customers include Swiss Re, which recently signed a $10m carbon removal deal with the plant, as well as Audi and Shopify.
Some energy models show the world will need to remove billions of tons of carbon dioxide from the atmosphere a year by the middle of the century to meet net-zero emissions targets.
Critics of direct air capture say the technology is too expensive and consumes too much energy to operate at a meaningful scale.
But its profile has been rising, with US President Joe Biden’s recent infrastructure bill including $3.5bn for four direct air capture hubs.
Climeworks’ rival Carbon Engineering, a start-up based near Vancouver, is developing a plant in Texas with Occidental Petroleum that aims to extract up to 1m tonnes of CO2 a year.
Because the atmosphere is just 0.04% carbon dioxide, extracting it can be time-consuming and energy-intensive.
Wurzbacher said the Orca plant, powered by geothermal energy, was more efficient and used fewer materials than Climeworks’ earlier technology – “it is really the next step up.”
Orca uses dozens of large fans to pull in air, passing through a collector where the CO2 binds with other molecules. The binding substance is then heated, which releases the carbon dioxide gas.
To mark Wednesday’s opening, a tank full of carbon dioxide collected from the air was injected underground, where it will mix with water and eventually turn into the rock as it reacts with a basalt formation, locking away the carbon.