DAC technology is gaining traction as a potentially viable solution for hard-to-abate industries like transportation and aviation that face decarbonization challenges. In these industries, DAC would be utilized to remove CO2 from the atmosphere to offset CO2 emissions produced from internal combustion engines, jet engines or other sources. The ultimate goal is to achieve net zero or net-negative CO2 emissions.
A number of companies such as Airbus, United Airlines, Audi, Swiss Re, Microsoft, JP Morgan Chase and others are moving forward with programs in which DAC facilities provide carbon dioxide removal (CDR) services. Companies purchase CDR credits from DAC facilities to offset produced CO2 or result in net negative emissions. Airbus, for example, previously announced an agreement with Oxy Low Carbon Ventures (1PointFive) for such a program. Under the agreement, Airbus purchases the capture and permanent sequestration of 100,000 metric tons of CO2 per year for four years by a DAC facility currently under construction by Oxy in the Permian Basin of West Texas. That plant is projected to have a total CO2 removal capacity of 500,000 metric tons.
According to the International Energy Agency, there are 18 mostly small DAC plants currently operating worldwide, but an enormous scale-up is expected by 2050, resulting in capacity to annually capture more than 60 million metric tons of CO2. This growth will require advancements in DAC technology along with modularization of components and advancements in the availability of cost-effective renewable or low-carbon electricity to improve the overall economics of construction and operation.
Financial and tax incentives recently made available by Congress will help by providing billions of dollars for grants, loans or tax credits. The Inflation Reduction Act that was passed in mid-2022 sweetens tax credits already available under Section 45Q of the U.S. tax code for both point source and DAC facilities. The Infrastructure Investment and Jobs Act, enacted in 2021, provides $3.5 billion for DAC hubs and an additional $115 million for DAC technology development.
Siting for DAC facilities must weigh in the availability and abundance of non-CO2-emitting energy resources and proximity to pipelines, sequestration fields and offtake possibilities. In order to achieve net zero CO2 emissions, negative emissions solutions and carbon removal technologies will absolutely be required. DAC could prove to be a key option in the global movement toward decarbonization.