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National Observer
5 days ago
- Business
- National Observer
Could Canada's carbon capture ambitions catch a chill from Iceland's struggling Mammoth project?
Iceland and Canada lie over 4,500 kilometres apart on a world map, yet news that a pioneering carbon removal project near Reykjavik is falling well short of expectations a year after its launch has hit home with some North American sector skeptics closely watching the climate technology's progress. Switzerland's Climeworks, which has raised US $800 million, opened the world's largest operational direct air capture (DAC) plant, known as Mammoth, to global fanfare in May last year. But the facility, which uses what look like walls of giant fans to capture CO 2 directly from the air and then pumps it deep underground, has not measured up to expectations. The pilot project pulled just 105 tonnes of CO 2 from the air in its first 12 months of operation, a fraction of its projected annual capacity of 36,000 tonnes, according to a report by Iceland's Heimildin newspaper last month. 'That is less than the annual emissions of a dozen long-haul trucks,' said Michael Barnard, a prominent clean energy technology analyst and self-styled debunker of greenwashing technologies. Climeworks has not responded to the news report or to requests for comment from Canada's National Observer. But the slow start at Mammoth has sparked discussion in clean energy circles over the wisdom of investing hundreds of millions of dollars in similar CO 2 removal projects in Canada. 'We don't need a billion-dollar vacuum cleaner for the sky,' Barnard said in a LinkedIn post. 'We need heat pumps, EVs, and clean electricity. DAC might serve as niche cleanup after 2050 — maybe.' Canada was already betting on direct air capture before the Iceland setback. The Trudeau government supported DAC development through tax credits covering 60 per cent of construction costs, a $10 million commitment to carbon removal service purchases, and a draft federal offset protocol allowing DAC companies to generate tradeable carbon credits. These incentives and guaranteed demand aim to lure private investment in DAC and potentially boost the Liberals' faltering pledge to reach net-zero emissions in Canada by 2050. Following his April election, Prime Minister Mark Carney said Canada could be a leader in carbon capture and storage as part of a controversial effort to decarbonize oil and gas, including extending tax credits and setting carbon dioxide removal targets. Canada is taking the opposite approach to the United States, where Trump administration budget cuts could eliminate up to US $1 billion in Department of Energy (DOE) funding for two direct air capture demonstration projects in Texas and Louisiana. Nevertheless, DAC is gathering pace elsewhere, with roughly 150 companies working on projects around the world. Eight companies are located in Canada, including Montreal-based start-up Deep Sky's Alpha project — a first-of-its-kind solar-powered DAC technology hub in Alberta partly backed by Bill Gates' Breakthrough Energy Catalyst fund. Deep Sky Alpha, on track to bring the first of as many as 14 different DAC plant concepts online this summer, is expected to cost over $110 million over the next decade. Whether any will make the leap to commercialization remains a question mark, said Phil De Luna, Deep Sky's chief carbon scientist and head of engineering. 'In the current geopolitical climate, with the US Trump administration cutting DOE funding for key DAC projects, there are understandably some concerns about development of the technology,' he told Canada's National Observer. 'But this only makes the industry more focused — and the scrutiny being shown [to projects like Mammoth] is overall a healthy thing and helps all of us in learning as we go in developing DAC technologies.' Trials of a 'first of a kind' technology Where industry observers like Barnard see an expensive technology failing to live up to its hype, De Luna remains optimistic. He said only a 'subsection' of the Mammoth plant was fully commissioned, and despite the low carbon capture rate, the results show the technology works, he said. 'I think the marketing [by Climeworks on its Iceland project] and the attention generated has been a little premature,' said De Luna, who toured the facility during a recent holiday in Iceland. 'This is first-of-a-kind technology, and it's tremendously positive that we know the technology is working,' he said. Jorden Dye, director of the Carbon Dioxide Removal Centre, a Calgary-based think-tank, said the poor results from Iceland were 'nothing more than a bump in the road' and direct air capture could be a viable technology for climate mitigation in the years to come. 'If we are not developing DAC now — working through the prototypes, getting it deployed at ever-larger scale, commercializing it — then we won't have it ready when we need it by mid-century,' he said. Barnard, a former IBM troubleshooter who now consults on energy transition technologies for industrial conglomerates, said DAC 'does work and will work better' as it is developed, but it would not be economically scalable by 2050, if ever. 'DAC is economically non-viable. It's a dead technology walking,' he said. The current uses for captured CO 2 — such as injecting carbon dioxide into aging oil and gas reservoirs to boost pressure and production, as well as into concrete, plastics or biofuels — account for a very small percentage of the 35-45 billion tonnes of CO 2 added to the atmosphere each year, he said. 'So the 'U' in CCUS [carbon capture, utilization and storage], for instance, will never become material," Barnard said. If captured CO 2 isn't being used, he said it only makes sense to build DAC plants where it's possible to store large volumes in geological structures like depleted fossil fuel reservoirs or rock formations deep underground. 'Carbon capture, if it can be made to pencil out at all, only does so in a very limited number of places,' Barnard said. To make sense from a climate and economic point of view, any new carbon removal technology would need to capture around 100 million tonnes annually, according to Barnard's calculations. Achieving this scale would require hundreds of kilometres of so-called 'extractor walls' made of porous materials to absorb CO 2. Nature-based alternatives — from reforesting denuded lands and planting tree farms, to restoring waterways and wetlands — are a better investment, Barnard said, as well as stepping up the electrification of industries and transportation. Canada "well positioned" Despite the economic and technological hurdles, proponents point to DAC's key role in Canada's carbon management strategy to reduce the country's greenhouse gas emissions by 40 to 45 per cent below 2005 levels by 2030. 'Canada is incredibly well-positioned to lead in advancing this technology — which will take time to develop, but which we are definitely going to need due to climate change,' Dye said. "Carbon capture, if it can be made to pencil out at all, only does so in a very limited number of places. Canada has two advantages for DAC projects. First, 80 per cent of the country's electricity comes from renewable sources, primarily hydroelectric power that provides the clean, affordable energy that carbon removal plants need. Second, Canada's underground geology can store about 678 gigatonnes of CO 2 — nearly equal to the country's entire emissions in 2023 and more than twice Canada's objective of carbon removal by 2050, according to Carbon Removal Canada. The industry lobby group projects that a full-scale DAC industry could create 300,000 jobs and add $143 billion to Canada's GDP by 2050. 'DAC needs the intersection of renewable power and geologic storage and there are very few places on the planet that have these in the abundance we do here in Canada,' De Luna said. The global DAC market could exceed US $1 trillion by 2050, according to projections from the UN Intergovernmental Panel on Climate Change and McKinsey & Company. Still, the disappointing news from Mammoth could affect investor perceptions of direct air capture projects, said Na'im Merchant, Carbon Removal Canada's CEO. 'There are well over 100 companies around the world that are doing 'something new and difficult for the first time' to develop these technologies,' he told Canada's National Observer. 'Some might outperform expectations, some might underperform, but we haven't yet made the kind of investment needed to help commercialize these technologies to let up now," he said. "I do worry public perception of a project like Mammoth could affect investor perception [of the viability of DAC]." Multiple pilot projects could help to identify scalable technologies worthy of the major investment needed to build carbon removal plants that can benefit from economies of scale, he said. Barnard disagrees. While Wright's Law — which says the cost of manufactured items gets cheaper for every doubling of units produced — explains a 90 per cent plunge in solar panel prices in the past decade, DAC will not see such cost reductions, he said. 'Solar got cheap because [the industry] had billions of units, huge consumer markets, and steep learning curves and [photovoltaic panels] were relatively simple objects to make,' he said. DAC involves industrial-scale infrastructure moving huge volumes of air through kilometres of fan walls. 'Only thousands of units will be manufactured per type of DAC and most of the components are already bog-standard and cost-optimized,' he said. "Creating the right policy environment, so investors feel DAC is sufficiently derisked must ultimately be more important than early results from a first-of-its-kind carbon removal technology like Climeworks" The technology faces other challenges. 'It takes energy to separate dilute CO 2 from air and then separate the CO 2 from whatever captured it — lots of it. There's no magic breakthrough coming,' Barnard said. DAC's development is also a policy puzzle. "Creating the right policy environment, so investors feel DAC is sufficiently derisked must ultimately be more important than early results from a first-of-its-kind carbon removal technology like Climeworks," Merchant said. He sees the US policy retreat as Canada's opportunity to accelerate the development of demonstration-scale plants capturing hundreds of thousands of tonnes annually. Environment and Climate Change Canada spokesperson Samantha Bayard said in an emailed statement that Ottawa was 'still consulting' on the draft offset protocol for using direct air capture that qualifies for federal offset and pricing systems, as well as clean electricity regulations. The federal government supported DAC because it was 'recognized by the Intergovernmental Panel on Climate Change and the International Energy Agency that there is no credible path to net-zero emissions without [these] carbon management technologies," she said. Canadian 'DAC Olympics' Deep Sky Alpha, being built in Innisfail, AB, will play a central role in growing small-scale pilots to mid-size demonstrators. Start-ups such as ReCarbn, Carbyon, Carbon Atlantis, and Skyrenu are already queuing up for construction and commissioning. 'We see Alpha as the DAC Olympics,' De Luna said, adding the project will help identify what technologies work best for Canada's climate and inform investor decisions on whether to invest the hundreds of millions of dollars needed to scale up the technology. Other Canadian projects are moving ahead as well, including a maiden DAC plant in Fermont, northern Quebec, developed by Ottawa-based TerraFixing and partner Tugliq Énergie, a green energy supplier in Montreal. 'This project will take full advantage of Quebec's clean hydroelectricity and huge wind power resource, so it will point the way toward developing more renewables in the province as well as proving our technology on the way to commercialization,' TerraFixing CEO, Vida Gabriel, told Canada's National Observer. The Fermont project, expected to go online later this year, comprises a pair of TerraFixing DAC units powered by wind and backed up by hydro. Each unit aims to capture up to 1,000 tonnes of CO 2 per year. Industrial-scale demand needed The federal government's carbon removal strategy envisions deploying a range of technologies that will spur the development of a 'world class, multi-billion-dollar carbon management sector.' While it concedes that DAC is 'less mature' than CCUS, it believes direct air capture holds 'significant' potential for current climate action plans. Ottawa's carbon removal procurement plans are an important first step, Merchant said, but federal purchases need to increase tenfold now and another tenfold after 2030, given that industrial demand for carbon credits will drive DAC growth. 'We need to create the demand for DAC across government, the corporate sector, from heavy-emitting industry — we won't get to gigatonne-scale [carbon removal] plants without it,' he said. Corporate early adopters are already emerging. Shopify, an online marketplace platform, last year founded a group called Frontier alongside Stripe, Alphabet, Meta, and McKinsey Sustainability, with plans to spend US $925 million on carbon removal. Separately, RBC and Microsoft have signed deals with Deep Sky to buy DAC carbon credits over the next 10 years. Climate change won't wait, however. DAC proponents argue technologies must be developed now to be ready to capture and store legacy emissions in the decades ahead, regardless of how quickly the world decarbonizes. 'We have to factor in 'pipeline warming,'' De Luna said, adding that even if all emissions ceased immediately, global warming would persist for decades and require removing at least a decade's worth of CO 2 already in the atmosphere. 'The criticism of DAC — it's too energy intensive, too costly, too hard to scale up — overlooks this," he said. "Clean energy, yes, it is absolutely what we should do, but there are still emissions to be dealt with and DAC will be a big part of the solution there.' Carbon cost disincentive One issue is that Canadian companies are reluctant to pay the price of carbon credits. The federal carbon levy, launched at $20 per tonne in 2019, rises $15 annually and is expected to reach $170 per tonne by 2030. But De Luna believes 'over time this willingness to pay will change' as carbon removal gets cheaper and companies face intensifying pressure to decarbonize. Today, the cost of pulling CO 2 from the atmosphere is around US $1,000/tonne — what Climeworks has paid to capture emissions at its Mammoth facility. The Swiss company has said its Generation 3 technology aimed to reduce costs to US $250-350/tonne of CO 2 captured, and achieve a total cost of US $400-600/tonne removed by 2030. Deep Sky sees a route over the next three to five years to reduce their costs to $400/tonne and then 'in the 2030s' closer to $200/tonne. 'We are never going to get the cost down to as low a level as we need if we don't start building now,' said De Luna. 'We are never going to get the cost down to as low a level as we need if we don't start building now." 'We are already seeing precipitous cost reductions between the technologies we are piloting at Alpha and the next-generation technologies that we are evaluating for our next projects there," he added. Barnard argues climate action investments by governments and industry should be directed solely at clean energy — solar power, battery technologies and electric vehicles. 'If we electrify as fast as we might, we will not have anywhere near the demand for technologies like DAC,' he said. 'DAC is not going to help us in Canada or on this planet with our 2050 emissions reduction targets. Renewables, led by solar and batteries, will.' 'Co-opted' by Big Oil? Without wider public support, Merchant warned, DAC risked becoming a 'fig leaf' that allows fossil fuel companies to continue business as usual. US oil giant Occidental is an example of this concern. Its Stratos facility in Texas will be the world's largest DAC plant, capturing 500,000 tonnes of CO2 yearly and, according to the company, help preserve its core oil and gas business. 'This gives our industry a license to continue to operate for the 60, 70, 80 years that I think it's going to be very much needed,' Occidental CEO Vicki Hollub told a Houston oil and gas conference in 2023. Investor sentiment for DAC is also highly dynamic, with feverish interest in the technology in the early 2020s giving way to greater investor wariness. That could shift again. 'The carbon removal investor 'gold rush' we saw a few years ago is over. This is a time of stress for the sector,' Gabriel said. 'Canada can seize the opportunity to rapidly advance DAC and move past this phase.' DAC proponents want to reframe the conversation about climate change and the role that carbon removal technologies can play in reducing emissions along with other mitigation efforts. As the climate crisis deepens, 'we will realize we didn't do enough to develop carbon removal technologies so that we have the tools we need to help ourselves," Merchant said. De Luna said he hoped 'ingenuity and innovation' would get the energy transition back on track and DAC could be part of the climate action solution. "With climate change, things are going to get worse before they get better. But will we be able to make things better with DAC and other carbon removal technologies? Yes, absolutely.'
New York Times
10-06-2025
- Business
- New York Times
Carbon Capture Comes Back Down to Earth
Six months ago, the prospects for the nascent carbon removal market seemed as vast as the sky. Bill Gates and other investors were lining up to fund start-ups that promised to suck carbon dioxide out of the atmosphere, helping to curb global warming. Big-name companies like Google, Airbus and Amazon moved in to buy carbon removal credits. And McKinsey projected the market could be worth as much as $1.2 trillion by 2050. One investor called it 'the single greatest opportunity I've seen in 20 years of doing venture capital.' But less than six months into President Trump's second term, in which he has moved to drastically reshape climate policy, the carbon capture industry is decidedly more subdued. The Energy Department last month terminated 24 awards worth $3.7 billion, most of which had been earmarked for carbon removal projects. Applications for new carbon capture and sequestration permits in the United States were down 55 percent in the first three months of the year. And last month Climeworks, the most prominent carbon removal company, which I reported on last year, cut 22 percent of its staff in anticipation of slower growth. Two other carbon capture start-ups, Heirloom and Pachama, have also announced layoffs in recent weeks. 'There is a new administration in the U.S.,' Jan Wurzbacher, the co-chief executive of Climeworks, told me. 'That's a fact, and the new administration puts certain things in question.' Yet it's not just the political landscape that has changed. There are also new questions about the viability of some prominent carbon capture technologies. Want all of The Times? Subscribe.
Skift
10-06-2025
- Business
- Skift
Travel Brands Stick With Carbon Capture Firm Despite Layoffs and Setbacks
Carbon capture may be a promising climate solution, but the gap between promise and delivery is growing harder to ignore. Travel companies working with Swiss carbon dioxide removal firm Climeworks told Skift they are sticking with the company, even as it struggles to scale up operations and makes deep job cuts. Climeworks, which built the world's first commercial plant that removes carbon dioxide directly from the air and stores it underground, recently announced it would lay off more than 20% of its workforce. The company cited 'macroeconomic uncertainty and shifting policy priorities.' Climeworks has deals in place with several well-known travel companies, including Lufthansa, SWISS Air, British Airways, and the Adventure Travel Trade Association (ATTA). Swiss Air, part of the Lufthansa Group, was Climeworks' first aviation customer in 2024. The airline has called direct air capture a vital long-term tool for reducing aviation emissions. 'Direct air capture is not only a crucial complementary measure for aviation to achieve its CO₂ targets, but also a highly relevant technology for the future production of Sustainable Aviation Fuel (SAF),' Swiss Air has previously said. Lufthansa signed a multi-year agreement with Climeworks and confirmed to Skift that it has no plans to change course. 'Our partnership with Climeworks is in place since 2024,' a Lufthansa spokesperson said. 'Compensation and innovative processes for filtering CO₂ from the air and storing it form a complementary instrument in the Lufthansa Group's sustainability strategy.' Swiss Air told Skift its agreement runs through 2030 and emphasized that payments are only made once carbon capture credits are delivered. A spokesperson said the company wants to support the scaling of the technology. 'Climeworks is currently the only company in the world that operates Direct Air Capture (DAC) commercially,' it added. British Airways announced a contract with Climeworks in the past for a small amount of carbon removal credits, though it did not respond to Skift's recent request for comment. Previously, the airline said carbon removal was essential to its net-zero plans. 'There is no pathway to net zero for aviation without carbon removals,' Carrie Harris, Director of Sustainability at British Airways, said in September last year. The Adventure Travel Trade Association was one of Climeworks' earlier travel-sector partners. It told Skift it is continuing to work with the company. It supports Climeworks through its 'Tomorrow's Air' program, which offers travelers the option to directly remove CO₂ from the atmosphere. 'A Challenging Time' Climeworks says its carbon capture technology works by sucking co2 out of the air and storing it underground in rocks as stable carbonate minerals. source: climeworks Climeworks, which has raised over $800 million, has captured far less carbon than expected. According to the firm has delivered just 1,100 tonnes of carbon removal so far. That's well below the 380,000 tonnes it has signed deals for. Climeworks did not respond to Skift's request for comment. 'We've always known this journey would be demanding,' CEOs Christoph Gebald and Jan Wurzbacher said in a statement announcing the layoffs. 'Today, we find ourselves navigating a challenging time.' Still, the company is pressing ahead with its Mammoth plant in Iceland, which has a nameplate capacity of 36,000 tonnes of CO₂ per year. But in its first 10 months, it only captured 750 tonnes. Once supply chain emissions were factored in, net removals came to just 105 tonnes, the equivalent of the yearly emissions of about eight Americans. Climeworks' older Orca facility in Iceland was designed for 3,000 tonnes per year, but hasn't hit 1,000 tonnes in any single year since opening in 2021. Skift's in-depth reporting on climate issues is made possible through the financial support of Intrepid Travel. This backing allows Skift to bring you high-quality journalism on one of the most important topics facing our planet today. Intrepid is not involved in any decisions made by Skift's editorial team.
CNN
30-05-2025
- Business
- CNN
This company says its technology can help save the world. It's now cutting 20% of its staff as Trump slashes climate funding
Climate change Donald Trump Air quality PollutionFacebookTweetLink Follow Two huge plants in Iceland operate like giant vacuum cleaners, sucking in air and stripping out planet-heating carbon pollution. This much-hyped climate technology is called direct air capture, and the company behind these plants, Switzerland-based Climeworks, is perhaps its most high-profile proponent. But a year after opening a huge new facility, Climeworks is straining against strong headwinds. The company announced this month it would lay off around 20% of its workforce, blaming economic uncertainties and shifting climate policy priorities. 'We've always known this journey would be demanding. Today, we find ourselves navigating a challenging time,' Climeworks' CEOs Christoph Gebald and Jan Wurzbacher said in a statement. This is particularly true of its US ambitions. A new direct air capture plant planned for Louisiana, which received $50 million in funding from the Biden administration, hangs in the balance as President Donald Trump slashes climate funding. Climeworks also faces mounting criticism for operating at only a fraction of its maximum capacity, and for failing to remove more climate pollution than it emits. The company says these are teething pains inherent in setting up a new industry from scratch and that it has entered a new phase of global scale up. 'The overall trajectory will be positive as we continue to define the technology,' said a Climeworks spokesperson. For critics, however, these headwinds are evidence direct air capture is an expensive, shiny distraction from effective climate action. Climeworks, which launched in 2009, is among around 140 direct air capture companies globally, but is one of the most high-profile and best funded. In 2021, it opened its Orca plant in Iceland, followed in 2024 by a second called Mammoth. These facilities suck in air and extract carbon using chemicals in a process powered by clean, geothermal energy. The carbon can then be reused or injected deep underground where it will be naturally transformed into stone, locking it up permanently. Climeworks makes its money by selling credits to companies to offset their own climate pollution. The appeal of direct air capture is clear; to keep global warming from rising to even more catastrophic levels means drastically cutting back on planet-heating fossil fuels. But many scientists say the world will also need to remove some of the carbon pollution already in the atmosphere. This can be done naturally, for example through tree planting, or with technology like direct air capture. The advantage of direct air capture is that carbon is removed from the air immediately and 'can be measured directly and accurately,' said Howard Herzog, senior research engineer at the MIT Energy Initiative. But there are big challenges, he told CNN. The concentration of carbon dioxide in the atmosphere has been shooting upward, but still only makes up about 0.04%. Herzog compares removing carbon directly from the air to needing to find 10 red marbles in a jar of 25,000 marbles of which 24,990 are blue. This makes the process energy-intensive and expensive. The technology also takes time to scale. Climeworks hasn't come anywhere close to the full capacity of its plants. Orca can remove a maximum of 4,000 tons of carbon a year, but it has never captured more than 1,700 tons in a year since it opened in 2021. The company says single months have seen a capture rate much closer to the maximum. The company's Mammoth plant has a maximum capacity of 36,000 tons a year but since it opened last year it has removed a total of 805 tons, a figure which goes down to 121 tons when taking into account the carbon produced building and running the plants. 'It's true that both plants are not yet operating at the capacity we originally targeted,' said the Climeworks spokesperson. 'Like all transformative innovations, progress is iterative, and some steps may take longer than anticipated,' they said. The company's prospective third plant in Louisiana aims to remove 1 million tons of carbon a year by 2030, but it's uncertain whether construction will proceed under the Trump administration. A Department of Energy spokesperson said a department-wide review was underway 'to ensure all activities follow the law, comply with applicable court orders and align with the Trump administration's priorities.' The government has a mandate 'to unleash 'American Energy Dominance',' they added. Direct air capture's success will also depend on companies' willingness to buy carbon credits. Currently companies are pretty free to 'use the atmosphere as a waste dump,' said Holly Buck, assistant professor of environment and sustainability at the University at Buffalo. 'This lack of regulation means there is not yet a strong business case for cleaning this waste up,' she told CNN. Another criticism leveled at Climeworks is its failure to offset its own climate pollution. The carbon produced by its corporate activities, such as office space and travel, outweighs the carbon removed by its plants. The company says its plants already remove more carbon than they produce and corporate emissions 'will become irrelevant as the size of our plants scales up.' Some, however, believe the challenges Climeworks face tell a broader story about direct air capture. This should be a 'wake-up call,' said Lili Fuhr, director of the fossil economy program at the Center for International Environmental Law. Climeworks' problems are not 'outliers,' she told CNN, 'but reflect persistent technical and economic hurdles faced by the direct air capture industry worldwide.' 'The climate crisis demands real action, not speculative tech that overpromises and underdelivers.' she added. Some of the Climeworks' problems are 'related to normal first-of-a-kind scaling challenges with emerging complex engineering projects,' Buck said. But the technology has a steep path to becoming cheaper and more efficient, especially with US slashing funding for climate policies, she added. 'This kind of policy instability and backtracking on contracts will be terrible for a range of technologies and innovations, not just direct air capture.' Direct air capture is definitely feasible but its hard, said MIT's Buck. Whether it succeeds will depend on a slew of factors including technological improvements and creating markets for carbon removals, he said. 'At this point in time, no one really knows how large a role direct air capture will play in the future.'
CNN
30-05-2025
- Business
- CNN
This company says its technology can help save the world. It's now cutting 20% of its staff as Trump slashes climate funding
Climate change Donald Trump Air quality PollutionFacebookTweetLink Follow Two huge plants in Iceland operate like giant vacuum cleaners, sucking in air and stripping out planet-heating carbon pollution. This much-hyped climate technology is called direct air capture, and the company behind these plants, Switzerland-based Climeworks, is perhaps its most high-profile proponent. But a year after opening a huge new facility, Climeworks is straining against strong headwinds. The company announced this month it would lay off around 20% of its workforce, blaming economic uncertainties and shifting climate policy priorities. 'We've always known this journey would be demanding. Today, we find ourselves navigating a challenging time,' Climeworks' CEOs Christoph Gebald and Jan Wurzbacher said in a statement. This is particularly true of its US ambitions. A new direct air capture plant planned for Louisiana, which received $50 million in funding from the Biden administration, hangs in the balance as President Donald Trump slashes climate funding. Climeworks also faces mounting criticism for operating at only a fraction of its maximum capacity, and for failing to remove more climate pollution than it emits. The company says these are teething pains inherent in setting up a new industry from scratch and that it has entered a new phase of global scale up. 'The overall trajectory will be positive as we continue to define the technology,' said a Climeworks spokesperson. For critics, however, these headwinds are evidence direct air capture is an expensive, shiny distraction from effective climate action. Climeworks, which launched in 2009, is among around 140 direct air capture companies globally, but is one of the most high-profile and best funded. In 2021, it opened its Orca plant in Iceland, followed in 2024 by a second called Mammoth. These facilities suck in air and extract carbon using chemicals in a process powered by clean, geothermal energy. The carbon can then be reused or injected deep underground where it will be naturally transformed into stone, locking it up permanently. Climeworks makes its money by selling credits to companies to offset their own climate pollution. The appeal of direct air capture is clear; to keep global warming from rising to even more catastrophic levels means drastically cutting back on planet-heating fossil fuels. But many scientists say the world will also need to remove some of the carbon pollution already in the atmosphere. This can be done naturally, for example through tree planting, or with technology like direct air capture. The advantage of direct air capture is that carbon is removed from the air immediately and 'can be measured directly and accurately,' said Howard Herzog, senior research engineer at the MIT Energy Initiative. But there are big challenges, he told CNN. The concentration of carbon dioxide in the atmosphere has been shooting upward, but still only makes up about 0.04%. Herzog compares removing carbon directly from the air to needing to find 10 red marbles in a jar of 25,000 marbles of which 24,990 are blue. This makes the process energy-intensive and expensive. The technology also takes time to scale. Climeworks hasn't come anywhere close to the full capacity of its plants. Orca can remove a maximum of 4,000 tons of carbon a year, but it has never captured more than 1,700 tons in a year since it opened in 2021. The company says single months have seen a capture rate much closer to the maximum. The company's Mammoth plant has a maximum capacity of 36,000 tons a year but since it opened last year it has removed a total of 805 tons, a figure which goes down to 121 tons when taking into account the carbon produced building and running the plants. 'It's true that both plants are not yet operating at the capacity we originally targeted,' said the Climeworks spokesperson. 'Like all transformative innovations, progress is iterative, and some steps may take longer than anticipated,' they said. The company's prospective third plant in Louisiana aims to remove 1 million tons of carbon a year by 2030, but it's uncertain whether construction will proceed under the Trump administration. A Department of Energy spokesperson said a department-wide review was underway 'to ensure all activities follow the law, comply with applicable court orders and align with the Trump administration's priorities.' The government has a mandate 'to unleash 'American Energy Dominance',' they added. Direct air capture's success will also depend on companies' willingness to buy carbon credits. Currently companies are pretty free to 'use the atmosphere as a waste dump,' said Holly Buck, assistant professor of environment and sustainability at the University at Buffalo. 'This lack of regulation means there is not yet a strong business case for cleaning this waste up,' she told CNN. Another criticism leveled at Climeworks is its failure to offset its own climate pollution. The carbon produced by its corporate activities, such as office space and travel, outweighs the carbon removed by its plants. The company says its plants already remove more carbon than they produce and corporate emissions 'will become irrelevant as the size of our plants scales up.' Some, however, believe the challenges Climeworks face tell a broader story about direct air capture. This should be a 'wake-up call,' said Lili Fuhr, director of the fossil economy program at the Center for International Environmental Law. Climeworks' problems are not 'outliers,' she told CNN, 'but reflect persistent technical and economic hurdles faced by the direct air capture industry worldwide.' 'The climate crisis demands real action, not speculative tech that overpromises and underdelivers.' she added. Some of the Climeworks' problems are 'related to normal first-of-a-kind scaling challenges with emerging complex engineering projects,' Buck said. But the technology has a steep path to becoming cheaper and more efficient, especially with US slashing funding for climate policies, she added. 'This kind of policy instability and backtracking on contracts will be terrible for a range of technologies and innovations, not just direct air capture.' Direct air capture is definitely feasible but its hard, said MIT's Buck. Whether it succeeds will depend on a slew of factors including technological improvements and creating markets for carbon removals, he said. 'At this point in time, no one really knows how large a role direct air capture will play in the future.'
