World's largest direct air capture plant enters operation in Iceland

A facility in Iceland that can capture up to 36,000 mt of CO2 from the air annually has started commercial operations in a boost to the nascent carbon removal sector.

The Mammoth direct air capture and storage plant, located in Iceland, has successfully started to capture its first CO2, with twelve of its total 72 collector containers installed onsite, operator Climeworks said May 8.

Direct air capture (DAC) technologies extract CO2 directly from the atmosphere, and the CO2 can be permanently stored in deep geological formations, thereby achieving CO2 removal. This sector is still in a nascent stage, with not many commercial plants operating.

Project developer Climeworks is betting big on this technology, and is developing multiple megaton hubs in the US, and is also developing projects in Norway, Kenya and Canada.

This is Climeworks' second commercial DAC facility and is about ten times bigger than its previous plant Orca, also located in Iceland.

The plant, which will filter CO2 from the air and store it permanently underground, will be completed throughout 2024. The plant will use geothermal renewable energy to power its direct air capture process, which requires low-temperature heat like boiling water.

"Once the CO2 is released from the filters, storage partner Carbfix transports the CO2 underground, where it reacts with basaltic rock through a natural process, which transforms into stone, and remains permanently stored," said Climeworks.

Carbon removal growth

DAC projects generate carbon dioxide removal (CDR) credits, which can also be generated by enhanced rock weathering, biomass carbon removal and storage, and biochar projects.

DAC and bioenergy with carbon capture and storage (BECCS) are two removal technologies with the largest carbon credit supply deals. Technology and aviation corporates have been foundational buyers of these credits, helping to scale up DAC projects in particular.

Almost 30 DAC plants have been commissioned globally but most of these facilities are at very early stages of development.

Platts, part of S&P Global Commodity Insights, assesses the price of carbon credits generated from the most competitive tech-based carbon credits, a category in which DAC is the most expensive. The price of credits generated by tech-based carbon capture projects trading in the voluntary carbon market for 2024 was assessed at $109/mt CO2e on May 7 by Platts.

Carbon credits from DAC projects are estimated to be very high, ranging from $300-$2,000/mt CO2e depending on the technology and scale, S&P Global data show.

Hurdles, opportunities

DAC can play an important role in meeting the world's climate goals by 2050, according to the Intergovernmental Panel on Climate Change.

Proponents of DAC see its permanence, flexible location, scalability, and ease of monitoring as attractive attributes.

Critics say DAC still needs to be demonstrated at scale and is extremely expensive.

Nevertheless, the sector is poised for rapid growth with capacity of 8.5 million mt C02e expected by 2030, with major projects planned in the US, Europe and the UK, according to analysts at S&P Global.

Support from governmental policies and voluntary carbon markets is driving momentum but technology breakthroughs and accelerated deployment are needed if costs are to fall.

"For liquid-DAC, the levelized CO2 capture cost could decrease dramatically to below $200/mt CO2 captured, mostly driven by 'learning by doing' effects," S&P Global analysts said in a recent note. "Meanwhile, economies of scale and learning would significantly cut the cost of solid-DAC by 70%, dropping to nearly $100 per metric ton of CO2 once the technology is matured and in scale."

Prior to Mammoth, DAC plants were only capturing around 10,000 mt  CO2/year, according to the International Energy Agency.

Under the IEA's Net Zero Emissions by 2050 Scenario, DAC could capture almost 65 million mt  CO2/year by 2030.