Direct Air Capture Market

[160 Pages Report] The global direct air capture market in terms of revenue was estimated to be worth $62 million in 2023 and is poised to reach $1,727 million by 2030, growing at a CAGR of 60.9% from 2023 to 2030. Several factors driving the direct air capture market are - more stringent government regulations and increased interest in synthetic fuels for environmental benefits in carbon reduction. Globally, governments are making strides to achieve a net-zero emission target. Over 140 major carbon-polluting countries, including China, US, and India, have promised to reach net-zero emissions by mid-century in 2050. The increased focus on net-zero emissions allows for an earlier investment opportunity for the developers of DAC solutions.

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Direct Air Capture Market Dynamics

Driver: Increasing emphasis on  global net zero emission goals

The increasing global pressures on the environment, most notably carbon dioxide emissions are estimated to contribute nearly 76 percent of global greenhouse gas emission estimates, are a collective move toward influencing a global movement in adopting Direct Air Capture systems. In 2022, the Global Monitoring Lab in the National Oceanic and Atmospheric Administration (NOAA) announced the average atmosphere carbon dioxide grew to 417.06 parts per million "ppm", an increase of 2.13 ppm from the previous year.  Governments are acting to reach net-zero emissions. More than 140 countries, several of whom are among the highest contributors to pollution (such as China, the United States, India, and the European Union), are committed to reach net-zero emissions by 2050. The strong movement toward net-zero emissions (which requires not only emissions reduction, but also active removal of CO2) provides proper conditions for the viability of Direct Air Capture (DAC) systems to be adopted and succeed.

Restraint: Infrastructural Hurdles to Scaling Up Direct Air Capture

Transportation and storage infrastructure also serves as the backbone of the carbon management industry - Pipelines are workable at a commercial scale in theory, and they are currently commercially deployed in a limited manner. There are pipeline projects specifically for CO2 that the International Energy Agency (IEA) projects will be able to reach surplus CO2 capacity of greater than 420 million metric tons (Mt) in projected storage by 2030. Nonetheless, the total does represent improvement, but it is insufficient to meet the estimated storage need of 1,200 million metric tons (Mt) of CO2 storage by 2030 in the Net Zero Emissions (NZE) Scenario.

Opportunities: Expansion of the utilization of Direct Air Capture (DAC) on a larger scale.

Globally, twenty-seven Direct Air Capture (DAC) plants have been commissioned, collectively capturing nearly 0.01 million metric tons of CO2 annually. Presently, there are plans for at least 130 DAC facilities at various stages of development. Projections indicate that DAC technologies are poised to capture over 85 million tons of CO2 by 2030 and a substantial 980 million tons of CO2 by 2050. Governments worldwide are actively supporting DAC technologies as part of their strategies to achieve net-zero emission goals, creating an opportunity for the technology to be scaled up on a larger magnitude. In line with this trend, Carbon Engineering ULC is set to establish a plant in 2025 with the capacity to capture up to 1 million metric tons of CO2 annually.

Challenges: High cost of direct air capture technology

Direct Air Capture (DAC) utilizes clean energy sources, such as wind and solar, to remove the CO2 already in the atmosphere, but, compared to other CO2 removal techniques, it remains relatively expensive. DAC involves separating CO2, which is energy intensive, and is a newer technology and so there are fewer projects and companies engaged, contributing to cost issues associated with DAC. According to the World Resource Institute (WRI), the costs associated with capturing CO2 from the atmosphere via DAC are between USD 250 - USD 600, with cost variation dependent on the technology utilized, the use of low carbon energy, and the deployment scale. Even though DAC has current cost barriers, new technology could spur usage and cause considerable reductions in costs.

Direct Air Capture Market Ecosystem

In this market, few companies stand out as established and financially stable providers of direct air capture technology. With years of experience, these companies boast a diverse product portfolio, cutting-edge technologies, and robust global sales and marketing networks. Their proven track record in the industry positions them as reliable and trusted partners for customers seeking direct air capture solutions. These companies have demonstrated their ability to adapt to market dynamics and consistently deliver high-quality products and services, making them leaders in meeting the demands of the oil and gas sector. Companies in this market include Climeworks (Switzerland), Carbon Engineering ULC. (Canada), Global Thermostat (US), Heirloom Carbon Technologies (US), Skytree (Netherlands).

The Liquid-DAC (L-DAC), by technology, is expected to be the largest market during the forecast period.

This report segments the direct air capture market based on technology into different types: Solid-DAC (S-DAC), Liquid-DAC (L-DAC), Electrochemical-DAC (E-DAC) and others. The Liquid-DAC (L-DAC) segment accounted to be the most dominating segment in the forecast period. In the Liquid-Direct Air Capture (L-DAC) process, that also CO2 was captured by the sorbents at low-temperature, but L-DAC still is in the first order of technologies, the operational activities are still performed at the lowest price and the fuel is the standard one. Solid DAC has a modular design; it is constructed using small, stackable modules, which results in lower initial deployment costs and facilitates gradual scalability. The flexibility to scale up or down easily makes it a well-suited technology for various applications, from capturing emissions in small industrial facilities to removing atmospheric CO2 in large-scale projects.

By application, carbon, capture and storage (CCS) is expected to be the largest growing during the forecast period.

This report segments the direct air capture market based on phase into two segments: Carbon capture, and storage (CCS) and carbon capture, utilization, and storage (CCUS). The carbon capture, and storage is expected to be the fastest and largest growing during the forecast period. The growth is attributed by the adoption of Carbon mineralization, which involves the permanent removal of carbon dioxide by converting it into a solid mineral form, usually a carbonate, through a chemical reaction with specific rocks. Carbon capture, utilization, and storage (CCUS) are the direct air capture process used for synthetic fuels, i.e., Power-to-X. The synthetic fuels are expected to be one of the top contributors to the aviation sector, providing ~40% of the aviation fuel demand. Predictions state that by 2070, at least ~20% of CO2 absorbed from bioenergy sources or caught directly from the atmosphere will be utilized in combination with clean hydrogen to generate synthetic hydrocarbon fuels.

“North America: The largest region in the direct air capture market.”

North America is poised to be the largest region of the direct air capture market forecast (2023-2030), followed by Europe. North America's primary role is firmly bolstered by clear policies and market-driven activities. The role of US Department of Energy support, particularly in regards to programs such as the The Regional Direct Air Capture (DAC) Hubs program, serves a firm basis for North America's market leader position. Under this program, US will develop four regional direct air capture hubs. Furthermore, policy frameworks have been put in place to encourage the deployment of DAC such as 45 Q tax credit and California low Carbon Fuel Standard.The regional direct air capture market is experiencing growth due to the presence of leading solution providers like Global Thermostat (US), Carbon Engineering ULC. (Canada) and Heirloom Carbon Technologies (US).

In Europe, the net ambitious objectives committed to by the UK and the demand for CO2 in vertical farms in the Netherlands are largely behind the development of the direct air capture market. The UK government has also established commitments of reducing direct emissions from public sector buildings by 50% by 2032 and by 75% by 2037, based on a 2017 baseline. The UK government will be required to utilize technologies, like direct air capture, which effectively captures pre-existing CO2 in the environment, in order to meet these targets.

Key Market Players

The direct air capture market is dominated by a few major players that have a wide regional presence. The major players in the direct air capture market include Climeworks (Switzerland), Carbon Engineering ULC. (Canada), Global Thermostat (US), Heirloom Carbon Technologies (US), Skytree (Netherlands). Between 2019 and 2023, Strategies such as new product launches, contracts, agreements, and expansions are followed by these companies to capture a larger share of the direct air capture market.

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Scope of the Report

This research report categorizes the market based on technology, application, source, and region.

On the basis of technology, the direct air capture market has been segmented as follows:

• Solid-DAC (S-DAC)
• Liquid-DAC (L-DAC)
• Electrochemical-DAC (E-DAC)

On the basis of application, the market has been segmented as follows:

• Carbon Capture, and Storage (CCS)
• Carbon Capture, Utilization and Storage (CCUS)

On the basis of source, the market has been segmented as follows:

• Electricity
• Heat

On the basis of region, the market has been segmented as follows:

• North America
• Europe
• Rest of the world

Recent Developments

• In September 2023, Climeworks collaborated with Great Carbon valley, a pioneering Kenyan systems integrator and project development venture to explore the development of large-scale projects.
• In November 2023, Heirloom Carbon Technologies signed an agreement with CarbonCure, a manufacturer of carbon removal or carbon utilization technologies  to capture CO2 from the atmosphere and permanently embed it in concrete. Under this agreement CarbonCure permanently store CO2 captured by Heirloom’s DAC facilities in nearby concrete plants.
• In October 2022, Carbon Capture, Inc. and Fluor Corporation entered into a contract. Under this contract, Fluor Corporation, a leading global engineering, procurement, and construction (EPC) firm provides engineering and project integration services for Project Bison
• In July 2021, Carbon Engineering ULC. and Lanza Tech, carbon recycling technology provider entered into partnership to generate sustainable aviation fuel (SAF) from atmospheric carbon dioxide (CO2), which is known as Project AtmosFUEL. The project will produce more than 100 million litres of SAF each year, once operational by the year 2031.

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