World's largest direct air carbon capture plant set to open in Iceland

Climeworks AG, a Swiss developer of technology for direct air capture of carbon dioxide, is opening a new facility in Iceland on Sept. 8 set to be the world's largest. The eight fan-like containers at the Orca plant will suck 4,000 tons of carbon dioxide from the atmosphere annually, the company said. The carbon will then be stored underground at the site southeast of Reykjavik.

Climeworks is tapping into a growing demand for carbon offsets from corporations unable to reach net-zero emissions on their own. Swiss Re AG, the global risk management giant, last month signed a 10-year carbon removal agreement with Climeworks worth $10 million.

Similarly, Carbon Engineering Ltd. launched a new carbon dioxide service in March, signing Shopify as its first customer. Shopify reserved 10,000 metric tons from a new facility that Carbon Engineering and Occidental Petroleum Corp. subsidiary Oxy Low Carbon Ventures LLC are developing in Texas.

The Canadian company spearheading the Texas project has also teamed up with a developer in the U.K. to build that country's first large-scale direct air capture plant, to be built in Scotland and expected to come online in 2026. The Texas and U.K. plants are each expected to absorb and trap up to 1 million metric tons of carbon annually.

But to make a significant dent in the amount of atmospheric greenhouse gases, direct air capture must be able to remove 10 million tons of carbon annually by 2030, according to estimates by the International Energy Agency. So far, cost has impeded a rapid scale-up of the technology.

Direct air capture plants use a lot of energy and must be powered by renewables to avoid becoming large emitters themselves. Depending on what energy source is used, operational costs can range from $250 to $690 for each metric ton of carbon that is sucked in, estimates have shown.

The Orca plant in Iceland will run on geothermal energy, a key source of electricity and heat in the Nordic nation. In an email, Climeworks noted that as a startup a decade ago, it could only capture a few milligrams of carbon dioxide each day. Today, it is capturing thousands of tons a year, "a scale-up ... factor [of] 1 billion."

"We have a detailed scale-up roadmap in place and are planning to move into mass production by 2025," the company wrote. "Climeworks' growing customer base, consisting of private individuals and businesses, is already supporting the scale-up, and making the removal of historic CO2 a reality."

Climeworks is also eyeing using federal tax credits in the United States as an opportunity to expand westward. The company has joined several other carbon removal technology businesses in lobbying the U.S. Congress to expand incentives for such projects.