DAC (Direct Air Capture) price is lowering faster than expected


A new study was shared widely estimating the cost of direct air capture to be higher than projected, but we show that the cost of DACCS might actually be lower in the near term than people are assuming.

Yesterday a new study from ETH Zurich was shared widely that estimated the cost of Direct Air Capture with storage (DACCS) won’t reach 340 USD per tonne (226–835 USD confidence interval) until a 1 billion ton per year deployment level. This is a much higher cost than other estimates.

As a matter of fact, DACCS costs from some companies are already close to, or at this level. The ETH Zurich study by Sievert, Schmidt &Steffen looked at three different “DAC 1.0” methods. But we are already at DAC 3.0 to borrow Jonte Boysen & Torben Schreiter’s wording. There are over 80 different direct air capture companies using at least 10 different types of methods, able to reach much lower costs than the early iterations.

We are currently assessing proposals for prepurchases through the charitable Milkywire Climate Transformation Fund. The median price requested by 17 DAC suppliers for removed and permanently stored carbon is 530 USD. These suppliers, shortlisted for extended proposals, are all serious contenders.

Since this is all prepurchases there is some uncertainty, but suppliers are willing to sign legal agreements to deliver at these prices. They were also asked what their cost of removal was. Some claim their capture costs are significantly lower than 500 USD today (even below 200 USD) but ask for more to cover uncertainties and overhead. Others have higher costs in 2024 than the price they ask for but are so sure that costs will drop with completion of their next facility that they can offer a lower price. It does not seem to be common to subsidize the capex and opex cost of carbon removal using other capital.

Of course, the companies have other overhead costs that are significant at an early stage, not the least R&D into improved tech, but that should not be included in cost estimates of removal. Note that some early DAC companies that ask for higher prices should not be excluded from support, the very first tonnes removed with a method are typically very costly.

Perhaps even more interesting is that these DAC companies estimated future cost is on average 137 USD/t (median 110 USD) already at a megaton (million) scale. This is at a 1000 times lower volume than the gigaton scale analyzed in the ETH Zurich study.

At CDR.fyi we saw the weighted average DACCS price go from 1261 to 715 dollar per tonne between 2022 and 2023, a 43% decrease. The dataset includes four companies—Mission Zero, Carbon Capture, Airhive, and Arbon—that have already sold DAC tonnes with storage for $320 to $580 per tonne, (all to Frontier / Stripe).

Boysen & Schreiter at Extantia also did work on modeling future costs of Direct air capture assuming learning rates looking from other technologies. Their results for DAC 1.0 is in line with the ETH Zurich study, but DAC 3.0 is in line with DAC companies own estimates (albeit a little bit slower in the model).


DAC is of course just one among many durable carbon removal methods. In our call for proposals at Milkywire, we are evaluating over 70 shortlisted CDR proposals across at least seven different pathways, most of which project future costs comparable to or lower than DAC.

If you want to support the acceleration of innovative carbon removal methods, the Milkywire Climate Transformation Fund welcomes additional donors and buyers. For more information, get in touch.

Author: Robert HöglundRobert manages the Milkywire Climate Transformation Fund, co-founded CDR.fyi, writes reports for the CDR non-profit Carbon Gap, and is a member of the EU Expert Group on CDR and the SBTi Technical Advisory Group.

Will Direct Air Capture Ever Be Affordable? The Rise of DAC 3.0




Published in


12 min read


Feb 6, 2024



DAC plants and/or renderings (1/3). Credits, top row left to right: Mission Zero Technologies, Greenlyte Carbon Technologies/dpa and RepAir; bottom row left to right: Carbyon, Carbon-Atlantis and Global Thermostat.

Direct Air Capture (DAC) has been a prominent topic in mainstream media for over two years now and has often been portrayed through a fairly narrow lens focusing mainly on two specific technologies: Climeworks’ solid sorbent and Carbon Engineering’s liquid solvent systems. This narrow focus, however, overlooks the broader, dynamic landscape of over 80 companies innovating in this field. This article aims to dispel some common, oftentimes overly pessimistic, misconceptions about DAC and its potential. We aim to offer a more optimistic yet grounded and comprehensive view on the topic and — hopefully — inspire new angles for looking at DAC.

Apart from the abovementioned misconception that DAC systems are actually only being developed by two companies, common criticisms can be segmented into two camps:

A) Critics who categorically oppose Carbon Capture, Utilisation and Storage (CCUS), of which DAC is a part, overlooking the state-of-the-art climate change mitigation research in the most recent IPCC report, who often cite a higher (short-term) carbon impact of using the electricity needed by DAC to instead contribute green electrons to decarbonising the grid. A secondary argument focuses on current high DAC tonnage prices, which allegedly delegitimize DAC as a viable solution indefinitely. We will not spend much effort responding to these criticisms as they ignore basic cost curves and developments in grid intensities.

B) Critics who consider CCUS as a viable piece to the decarbonization puzzle, but do not believe that any DAC system will ever reach the now-famous $100/tCO2 long-term cost target. They conclude that DAC is therefore merely a distraction in the fight against climate change. But how did $100/tCO2 become such a magic number amongst insiders? What other DAC technologies are out there? And can these novel approaches reach the elusive $100/tCO2 goal, if we even have to reach it?

A brief history of the magic $100/tCO2 number

The genesis of the $100/tCO2 target traces back to the late 2000s when the current DAC incumbents were founded. At the time, many in the scientific community felt that (nascent) DAC was fighting entropy and was therefore never going to be economically viable. A 2011 report assessing potential costs using known technologies drafted by the American Physical Society (APS) estimated a minimum(!) cost of $600/tCO2, bolstering this criticism. The industry’s public rebuttal took a full seven years to arrive when Carbon Engineering published a peer-reviewed 2018 paper projecting long-term costs for their technology to between $94/tCO2 and $232/tCO2. The company publicly announced this research, stating it proved “CO2 can now be captured from the atmosphere for less than $100 per tonne”, sparking a universal benchmark for the industry. Our own historical investigation suggests that this was the moment the magic $100/tCO2 number was born.

All competitors back then, and all those that have emerged since, were subsequently under pressure to confirm they, too, could hit $100/tCO2 or risk being shunned by customers and investors.

Also in 2018, Prof. William Nordhaus received a Nobel Prize in Economics for his work on estimating the social cost of carbon (SCC), including a 2017 paper that estimated the SCC in 2050 at $102/t (obviously he and the laureates were off by a sizable margin, but that is a different story). The social cost of carbon refers to future damages associated with one tonne of carbon emissions. With the projected cost of DAC and the estimated SCC meeting for the first time at $100/t, the number’s prominence grew. It was finally set in stone in May 2020, when the ARPA-E (an agency within the US Department of Energy (DoE)) issued a funding opportunity announcement for DAC technologies that could hit this mark (see DE-FOA-0001953, Appendix P). They arrived at this number through first principles engineering and economic considerations (particularly a 30% efficiency target, corresponding to less than 500 kWh/t energy consumption). ARPA-E also benchmarked the $100/tCO2 price point against the average selling price of CO2 for industrial use at the time, which also was around $100/t (considering a wide mean variation of prices) and against emissions trading schemes prices in the US and elsewhere at that time.

What is interesting with the ARPA-E analysis — and what aligns well with how we are looking at the offtake markets here at Extantia as well — is that price sensitivity in the market is actually quite comparable with regards to both green CO2 as a feedstock for utilisation pathways (thus circular solutions such as for our portfolio company INERATEC) or permanent sequestration (thus removal). Both markets will be highly relevant for DAC companies going forward.


Figure 1: We can do different things with the pure CO2 gas stream being released by a DAC unit. Credits: Extantia.

The Commodification of CO2: A Market Perspective

Comparing the $100/t target cost for CO2 to tonnage prices of other basic materials and traded commodities yields various insights. It is very hard to find any commodity at all that trades below $100/t. Only very few commodities, such as coal, cement, iron ore and barley, are close contenders to this price point (all somewhere between $100–200/t). Each of the first three are today produced at gigatonne scale globally — a size insiders expect the negative emissions industry to reach one day (ideally minus most of the logistical challenges of the mining industry). The only thing we know of (other than drinking water), that you can get for substantially less than $100/t, is something we also bury underground at gigatonne scale: gravel and sand (selling at around $35–70/t). It becomes clear that when we talk of green CO2 to sell at sub-$100tCOe, we quite literally mean “dirt cheap” carbon removals at a profound scale.


Figure 2: Commodity prices per metric tonne and market sizes of selected commodities. Once direct air capture (DAC) reaches $100/tCO2 and a market size of 0.98 Gt per year as predicted for 2050 by the IEA, only gravel and sand is cheaper (and not even an actual commodity). Credits: Extantia.

One factor that is often overlooked in the $100/tCO2 discussion, however, is inflation. The 2018 Joule paper that led to Carbon Engineering’s $100/tCO2 claim used 2016 dollars. In today’s (2024) money, the famous number would therefore be closer to $130/tCO2. Looking ahead to 2030 and 2050 and assuming a very modest 2% annual inflation, the nominal figure rises to $145/tCO2 and $215/tCO2, respectively. Further justification of a higher viable cost is provided by recent calculations from the US and the German Environment Agency (UBA) putting the SCC today at $190/tCO2 and €237/tCO2, respectively. Also see Figure 8 down below for reference of an inflation-adjusted view on different CO2 target prices.

Coming back to the Nobel Prize-winning price of $102 that was originally suggested for 2050, we have already observed the EU ETS cap-and-trade market effectively reach this level 25 years early (high in 2023 was €100.23/tCO2). Keeping in mind future inflation along with likely additional developments resulting in potentially higher carbon prices, it is fair to ask whether we need to get down all the way to the magic number of $100/tCO2. We can certainly afford to engage in a more nuanced discussion about how all these factors influence the acceptable cost of DAC over time. From today’s standpoint (2024), it seems quite likely that the (inflation-adjusted) $100/tCO2 is actually more of a lower bound on the viable price range for DAC, rather than an absolute maximum price.

What is clear is that DAC will take decades to (really) scale and that costs will gradually decrease as more capacity is deployed. Using our crystal ball, we can envision a future where DAC never actually reaches the $100 price tag due to the combined and ever-changing effects of scale-up/cost curve effects, inflation and higher SCC market expectations. In simpler terms, we don’t expect to see a $100 price tag for DAC-sourced CO2 in the next few years (despite very meaningful cost improvements), because we are still too far up the cost curve. In the late 2040s, we will approach the bottom of the cost curve, but potentially still not see a $100 price tag, because both inflation and higher carbon market price expectations might have driven tonnage values up. This certainly would neither be a negative indicator for DAC/CCUS at this point nor disprove the intent and thinking behind the magic $100/tCO2 number. An economically viable price for DAC-sourced CO2, and therefore the highest-quality CDR, would still be achieved.

But which technologies will actually be capable of moving down the cost curve to this ballpark of economically viable DAC prices?

Exploring DAC’s Technological Diversity


This is how diverse DAC units can look like (2/3). Credits: top row Airhive and Removr. Bottom row: Skytree/Harvey Wilson.

Where we agree with the DAC critics, is that we also think the $100/tCO2, or even the inflation-adjusted $130/tCO2 figure, is likely out of reach for Climeworks’ and Carbon Engineering’s technologies. Climeworks itself recently suggested that a cost as high as $300/tCO2 (in 2023 dollars) is feasible for 2050. Where we disagree with the critics, however, is that $100/tCO2 may very well be in reach for entirely different DAC technologies.

New technology platforms — few people outside the DAC community are even aware of — allow for substantially steeper learning curves that can drive costs down to $100/tCO2 or even lower. More of these novel technology platforms exist than most people think and new ones continue to emerge.


Figure 3: DAC is an attractive field for entrepreneurs. Credits: Extantia.

The number of DAC startup companies has grown from 5 in 2013 to at least 67 by the end of 2022 (the year of the almighty US Inflation Reduction Act as a defining moment for CCUS). In 2023 the number of DAC startup companies grew again to around 80.

This explosion in the number of companies was also accompanied by a vastly increased diversity of approaches. Although DAC technologies vary in many ways, systems can be categorised by both their capture type and release mechanism. While there were only liquid solvent and solid sorbent approaches until as recently as 2018, we have since seen membrane-based and cryogenic solutions emerge. Furthermore, there is a rich diversity even within solid sorbent approaches based on innovation in novel materials capable of capturing CO2. These include not only amines, but metal organic frameworks, zeolites, hydroxides, and many more.


Figure 4: CO2 capture sorbent types have only diversified recently. Credits: Extantia.

When categorising DAC technologies based on their CO2 release mechanism, we see the same trend: diversification only happened in recent years. Low-grade heat and high-grade heat release mechanisms, together called thermal approaches, have long dominated the DAC industry. Due to accelerated innovation in the last few years, however, the toolbox now contains at least seven strategies for dealing with captured CO2. We prefer some of these new release drivers, like voltage and pH, as they avoid the parasitic energy losses of thermal approaches and therefore often allow for a much lower energy consumption. At least as importantly, the novel capture and release approaches also open up new ways for startups to innovate on reducing capital expenditures (e.g. due to mass manufacturing of modularised key components).


Figure 5: Heat is being displaced as the release driver. Credits: Extantia.

The Next Wave of Innovation


This is how diverse DAC units can look like (3/3). Credits: Carbominer and Heirloom.

With so many new approaches, the obvious question is whether any room for true innovation remains. Historical trends suggest so and even give us an idea of where it will come from. DAC technologies can be divided into three generations. DAC 1.0 arose in the late 2000s and mostly employs well-understood and proven technical approaches with acknowledged energetic limitations — most famously Climeworks and Carbon Engineering. Starting around 2018, DAC 2.0 introduced novel and previously untested capture and release approaches. This includes membrane-based capture approaches like RepAir Carbon (no liquids) and Mission Zero Technologies (liquid solvent-based), which both recently worked their way out of lab-scale at light speed announcing pilot field deployments, reaching TRL 6 within three years from incorporation. Also notable is Verdox, which pioneered an entirely voltage-driven capture and release process, leveraging a proprietary redox-active compound.

DAC 3.0 — to Extantia’s observation — is a third wave of companies that started to emerge around 2021 when DAC 2.0 had seemingly more or less run out of entirely new approaches. The name of the game became driving innovation on a process level by creating new capture-release permutations that had never been tried before, or combining multiple capture or release approaches in one system. This generation of companies includes the likes of Greenlyte Carbon Technologies or Parallel Carbon, which have swapped out thermal approaches for a liquid solvent capture and electrochemical release approach (Greenlyte) or following a passive air contacting strategy and releasing via pH swing (Parallel Carbon). Maia — also a DAC 3.0 company — is combining multiple release mechanisms such as low-grade heat and voltage for favourable bottom line economics. These and other companies have been introducing a creative fusion of processes and mechanisms, pioneering unique approaches that sidestep conventional energy (or cost) penalties. Most interestingly, the vast majority of DAC companies have by now progressed in technological maturity (i.e. TRL) towards solving mainly engineering challenges rather than fundamental research challenges, which makes the technologies VC-investable.


Figure 6: DAC systems have a capture side and a release side. By combining different approaches for capture and release, unit economics can be optimised. Credits: Extantia.

Why Technological Diversity Enables $100/tCO2

The reason we are so interested in the technological diversity of DAC approaches is the associated increase in the aggregated likelihood of achieving an acceptable levelised cost of capture (a.k.a. $100/tCO2). Different technologies tend to follow different cost learning curves that determine a potential cost floor. The more shots on goal, the greater the likelihood of one solution having a sufficiently high learning rate. The learning rate of a technology is typically defined as the per cent decrease in cost achieved by every doubling of total installed capacity. We project a learning rate for DAC 1.0 similar to that of coal power at 8%, as both are derived from relatively established components put together in relatively bespoke engineering designs. This learning rate implies a gigatonne scale DAC 1.0 cost of roughly $250/tCO2.

DAC 2.0 and 3.0, on the other hand, tend to rely on more unique components and are built on less established technology platforms, suggesting learning rates closer to those of wind power at 12% and gas power at 15%. We believe their typical modularity and system complexity is closer to that of wind power than that of gas power, resulting in projected learning rates of 13% for DAC 2.0 and 14% for DAC 3.0. These learning rates both enable $100/tCO2 cost at gigatonne scale, though exact current costs and scales are difficult to determine. Importantly, however, this shows that reasonable learning rates allow the novel DAC technologies to achieve the magic $100/tCO2 target.

In our analysis, we are applying the same learning rate to both Capex and Opex, which seems a reasonable simplification for the model given the relatively high energy consumption at the current very small scale. Sequestration costs are also included with the same learning rate. In target locations for DAC (e.g the US Permian Basin), sequestration is already today at or below ~$10/tCO2, making it a comparably marginal cost item to total DAC/CDR cost (src1, src2).


Figure 7: Learning rates must improve to achieve $100/tCO2. Credits: Extantia.


Figure 8: Potential DAC cost paths relative to CO2 commodity price ranges (nominal USD, 2% inflation-adjusted). Credits: Extantia.

The broadening array of DAC technologies, underpinned by varying learning rates, presents a mosaic of potential pathways to the elusive $100/tCO2 target. Despite the cost limitations of DAC 1.0, we also still see tremendous value in supporting incumbents come down the cost curve. They are pulling the rest of the industry up with them and provide a gradually decreasing ceiling for society on the price of durable carbon removal. We therefore hope all three DAC generations continue to innovate, collaborate, and prove the DAC doomers wrong. In this spirit, we also want to thank the DAC Coalition for its thoughtful and inclusive work in service of the industry.

If you are working on a novel DAC solution that can achieve the $100/tCO2 target, please reach out. At Extantia, we believe that technological pluralism not only fosters a rich environment for breakthroughs but also underscores the importance of supporting the continuum of DAC research and development to scale carbon removal. The journey ahead to scale is long, but — while it certainly is not a silver bullet — DAC is playing a crucial role as an important piece of the puzzle in averting the climate crisis.

Many thanks to Gregory Thiel and Benjamin Bronfman for helping us understand more about the history of the $100/tCO2 sound barrier.

We would also like to thank Jonte Boysen, who has been with us as Entrepreneur in Residence for the past few months. You have contributed significantly to our CDR activities and we wish you the best of success in your upcoming endeavour in the space.

UPDATE: We have added a paragraph to better explain our assumptions on the influence of different partial cost drivers on our total cost per tonne extrapolation. Thank you for your feedback.