Gigatons of opportunity: Scaling carbon capture


Gigatons of opportunity: Scaling carbon capture

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Climate & Capital’s Billy Gridley talks to Klaus Lackner, who says it’s urgent and feasible to scale air capture of carbon at a historic scale.

Enter the age of “carbonetics”

  • We should aggressively explore carbon dioxide removal via direct air capture to manage temperature overshoot and hard-to-abate emissions
  • A potential massive waste management industry may lie in our future
  • It is still very early in the technology development and commercialization of direct air capture
  • We will not know if direct air capture of carbon dioxide works until we try to de-risk and scale it
  • Direct air capture technologies need their own field. Just like aviation spontaneously created aeronautics. Let’s call it carbonetics. This needs a 30-year runway.

Climate change advocates want carbon reductions and removals. Decarbonizing producers are looking for technologies to abate emissions from fossil fuel products. Capital is finally moving into industrial carbon capture. On June 20th, we connected with Arizona State University’s physicist Klaus Lackner, the intellectual and practical father of direct air capture (DAC). We discussed why he originally conceived DAC and heard his views on the need to ‘buy down’ and test the feasibility of air capture at ever-increasing scales.

In the 1990s, Lackner predicted the challenge of carbon pollution and that the world would need to leave unburned carbon in the ground, and capture the waste byproduct of fossil fuel combustion from the air or store it underground, in order to mitigate global warming. 

Disclosure: The interviewer co-founded Kilimanjaro Energy with Klaus Lackner and others, which was subsequently sold for its DAC intellectual property.


Billy: Carbon capture is hot again. Why now?

Klaus: Because people realize that we have overshot 1.5 degrees Celsius of warming. At 420 parts per million (ppm) we are already 70 ppm above ’s original ‘safe’ concentration. Now many people believe that 1.5 degrees of warming is at best close to 450 ppm. At our current emissions rate we are putting out 2.5 ppm per year. I believe 100 ppm or more of ‘overshoot’ is likely, which equals a backlog of 1,500 gigatons of carbon dioxide. This compares to our current annual emissions of around 40.

Billy: Remember Princeton Professor Rob Socolow’s framework, where seven “stabilization wedges,” each of one gigaton (one billion tons) of annual carbon reduction, would need to be operational by 2050 to stay under 2 C? A wedge is a grouping of similar solutions or measures, e.g., energy efficiency, natural sinks, or carbon capture and storage.

The importance of more carbon ‘wedges’

Klaus: I told you and Rob back then that the seven wedges simply won’t cut it. Now the rest of the world has caught up with that observation. Yes, we can do all those wedges by 2050, but emissions will still not be zero. We will need more and different climate wedges. One or more could be direct air capture (DAC).

Billy: I see that your colleague, Dr. Nathan Johnson, Director of the Laboratory for Energy And Power Solutions at Arizona State University, published a 2021 article concluding that now 10-plus wedges would be necessary. Does that make sense? 

Klaus: Yes. That may be low. We simply must get to negative emissions technologies like air capture as soon as possible. Holly Jean Buck, Assistant Professor at Environment & Sustainability at the University of Buffalo, just wrote an article for the Sierra Club, arguing the need for carbon removal and negative emissions technologies and saying, “The question is not whether society should pursue carbon dioxide removal but how.”

If I let you get away with only 50-year storage full stop, then that tree is unbeatable. But you only paid for a fraction of the sequestration problem.

The case for technical carbon removal 

Billy: Investment capital is pouring into DAC. Why?

Klaus: If we want to take back the overshoot, we must scale carbon dioxide removal (CDR) in scales of tens of gigatons (billions of tons) per year by 2050. It must be a technical removal option because biological is simply not logical. 

Billy: What is direct air capture?

Klaus: DAC is a non-biological means of pulling CO2 out of the air. For CDR, there are three basic alternatives, one natural and two technical: 1) out of the air via photosynthesis (trees), 2) out of the air via technical means (direct air capture), 3) out of the ocean by technical means (removal from the ocean). These three are effectively equivalent, except that the biological means (trees) cannot possibly scale.

Trees cannot capture enough carbon

Billy: Why can’t nature bail us out again?

Klaus: Trees do not solve the problem of long-term, permanent storage (sequestration). Early on, David Archer, Professor of Geophysical Science at the University of Chicago and author of The Long Thaw, taught us that natural geologic removal takes at least 10,000 years and lasts for 100,000s or more. A tree that lasts 50 years just pushes your problem from your generation to your grandkids, an obvious intergenerational equity problem. More importantly, trees can not address the scale problem. Via nature, you would have to be bigger than all current agriculture; that will not work, environmentally or economically, because of competition with food.

By the early nineties I was convinced we will not run out of fossil fuels – we will have to leave them in the ground.

A debate on trees, ‘mechanical’ and otherwise

Billy: You have pursued DAC via mechanical trees. A tree is a marvelous technology. It naturally captures and stores carbon, if not efficiently, then at least low-cost and repeatedly at scale. How does a “good” tree in the U.S. forest compare to a mechanical tree right now in terms of efficiency and cost?

Klaus: This is not a good comparison because it is apples and oranges. And we need to specify these total costs via development and scaling and then compare. Let’s start here: You can pull a plow with a horse or with a tractor. The horse is the natural pulling machine. The tractor is the technological equivalent. The tractor is the heck of a lot better at it. For a given size, a mechanical tree collects at a rate that is roughly 1,000 times larger for a given size. Furthermore, the mechanical tree doesn’t store anything. That’s separate. Yet the natural tree only temporarily stores, maybe for 50 years. The comparison is awkward at best.

Billy: How about 200 sequential tree projects, 50 years each, getting you to 10,000 years. Will that work?

Klaus: I have no trouble with having temporary storage, including that of a tree, and I’ll be willing to pay a price for it, but the ideal storage operator now should have the liability that once that tree is gone, they recapture the carbon and put it away again and again. If I let you get away with only 50-year storage, full stop, then that tree is unbeatable. But then we let you off the hook with a violation of the polluter pays principle. You only paid for a fraction of the problem.

Billy: What about taking back carbon from the ocean?

Klaus: In the ocean, the carbon content is one in 25,000 water molecules, while in air, it is one in 2,500. So I’d rather go for industrial removal from air. 

Billy: Let’s step back. What drove your life’s work towards air capture?

Klaus: Early on, unlike many environmentalists, I realized the importance of humans all having enough energy. The developing world needs and wants to reach a standard of living that they can see but only dream of. To avoid the real sustainability crisis, it must be possible for everyone to have the energy at the scale to allow for population growth to slow and to afford a decent standard of living for all. By the early nineties, I was convinced we would not run out of fossil fuels – we will have to leave them in the ground. Our real bottleneck is not access to reduced carbon: it is figuring out how to avoid accumulation in the atmosphere of its waste product, carbon emissions.

Billy: So we stop putting waste in the air and take some back for the avoidance of doubt? Reduction and removal? 

We are still as confused as they were in the early days of wind [power], as to where we need to go, but we just happen to be 10 times closer to the target.

Coping with missed carbon targets

Klaus: Yes. You have to deal with distributed sources – airplanes, ships, and vehicles – which is half of all emissions. More importantly, you had better develop the means to counterbalance hard-to-abate residuals and distributed sources and manage the overshoot. The World Resource Institute (WRI) now concurs. Given trends decades ago, it was clear to me that we would have to figure out how to go to zero carbon and balance the global atmospheric carbon books sometime in the first half of the century. This means CDR on a huge scale. I think the overshoot issue will dominate all other issues. Back then, I would look at it like a physicist on energy content. Today I would analyze it on a financial basis. 

Billy: What were your first observations about the feasibility of direct air capture?

The starter economics of carbon capture 

Klaus: Initially, I observed that in a given volume of air, there is far more carbon dioxide energy than wind energy. With simple assumptions (cheap renewable energy, wind speed of 6 meters a second, and a ‘tipping’ or waste fee of $30 per ton of CO2), in any afternoon, the volume of air passing through a windmill contains $300 worth of kinetic energy versus $21,000 worth of CO2. It is an odds-on proposition to try to contact and grab that CO2, in particular, if you use virtually free ‘natural’ energy. The cost of solar, without the cost of an inverter to connect to the grid, is down to $0.01 per kilowatt-hour; it has energy content equal to that of unabated natural gas.

Billy: People find it hard to get their brains around this math. How big could the overshoot be? How much carbon dioxide removal (CDR) every year would be required? Does it make you pessimistic?

Australia could pick up far more CO2 than they need to compensate for their own emissions, and could sell the difference as certificates of carbon sequestration. 

Amount of carbon to capture? A lot.

Klaus: It is not a question of optimism or pessimism. If you want to solve the problem, let’s first agree on how big the problem is. I am simply saying that the scale of the removal is not one or 10 gigatons a year: I figure it could be 20 to 40 gigatons, maybe more. 

Billy: That’s huge. A gigaton is roughly two times the mass of all humans in the world, so we urgently need to scale. In April 2022, Climeworks announced a $650 million equity round to help launch Orca and Mammoth, the world’s largest direct air capture plant at 36,000 tons per year, in Iceland using power from geothermal energy. Promising scaling evidence?

Klaus: Early promise. We need to test the scaling potential, starting at kilo- (1,000), moving to mega- (1 million), then moving to giga- (1 billion) ton scale to better characterize the nature of this technological ‘learning curve.’ Remember, the vast majority of successful technologies learn, but we don’t know anything about the unsuccessful technologies. We have to learn by doing.

Billy: At Columbia University and Kilimanjaro Energy, we raised $20 million and said, “look, we can do it.” At Climeworks, they have raised 30 times as much ($600 million), and they are trying to capture at $500 a ton. How much capital do we need to get to what proof points in price and quantity?

We are so used to having ‘reduced carbon’ from the ground that we don’t really think about the possibility of capturing carbon from the air, adding renewable energy to it, and producing reduced carbon liquid fuel.


Photo: Arizona State University

Greater energy potential than wind and solar

Klaus: The good news is DAC is far more promising than wind and solar were at the starting gate in the 60s and 70s: They had to bring down the cost by a factor 100. And they did. If we are at $500 per ton, which Climeworks is assuming, and which I believe we are, then getting to $100, then $50, is a fair possibility within several decades.

Billy: If we are only a factor five or ten away, why don’t we just put $6 billion into this now. We need this now!

Klaus: Until a year or two ago, the vast majority of people had no interest, for whatever reason. Certainly, there was no economic incentive to make it happen. It was only in May 2022 that the Direct Air Capture Coalition was launched to be a convener for the players in this growing field. I believe that it is still early in this game. As an industry, we have not coalesced around two or three technologies – which sorbents, solvents and regeneration pathways. We need time and capital. We also need more different technologies to be funded. In some senses, we are still as confused as they were in the early days of wind [power] as to where we need to go, but we just happen to be 10 times closer to the target. 

Billy: How much capital do you figure is needed for some “buying down” proof points? 

Klaus: If you want point source capture, you are talking about a single power plant costing hundreds of millions of dollars. But that is capital expenditure for a proven technology. In our model “Buying down the Cost of Direct Air Capture,” which used sensitivity analysis, we figured you might need $200 million of ‘subsidy’ to get to $100 per ton. This is a complex subject and a long road.

Billy: What are your thoughts on Frontier Climate, STRIPE and Shopify’s announcement to pay $925M of permanent carbon removal between 2022 and 2030 via its advance market commitment (AMC), a structure used to de-risk unproven technologies, without picking winners, by agreeing to provide future demand. 

Klaus: This is one of the subsidies we need to accelerate the development of CDR technologies by guaranteeing future demand for them. I do not know the details, but it is simply great. 

We should balance the carbon as it enters the supply chain, when oil and gas comes out of the ground.

Turning carbon into useful stuff

Billy: What might they do with the CO2?

Klaus: Climeworks intends to take its product, in the kilotons, to the merchant carbon dioxide market, selling for $100 to $500 per ton. These outlets for the CO2 from the kiloton to the megaton scale are very useful stepping stones on the journey to gigatons and sequestration. At that gigaton point, you better have a good place to put the CO2 or have plans to make clean fuels from it. To get there you likely will prefer small modular units to drive down costs. 

Small is beautiful 

Billy: Is this why you went for tree-sized capture devices?

Klaus: There are at least two reasons we prefer small mass-producible units: flexibility and geography. First, if you stay small, your cost of trying out a new idea is always small. Once you are committed at a $1 billion scale, you had better do things right the first time. Whereas if you are at the $10,000 scale, you can experiment, and if the next version is not better, you stay with what you have. Second is geography: We want to be location-flexible, where cheap renewable energy is, probably not near people and likely co-located near sequestration sites. In principle, because the air is global and mixes, we can collect wherever and whenever we want.

Billy: So is small beautiful?

Klaus: Yes. A car engine is about 100 times cheaper than a power plant, kilowatt for kilowatt. We are working on capture devices the size of a refrigerator. Cost minimization often works better at small scales. The math of mass production has costs declining in power laws: there is a rule of thumb that says that every time you double cumulative output, the cost of your systems drops by roughly 20%. So if you build 1 million and you go to 1 billion, your cost goes down a hundredfold, not a thousandfold. We need to drive down the cost of capture by doing.

The Australian Century 

Billy: Your geography point makes me think of Australia, the world’s potential first climate superpower, which Climate & Capital wrote about recently.

Klaus: Indeed. Australia is one of the extreme cases of a country with mineral resources, lots of land and renewable energy potential. You can think of storage capacity as another mineral resource — Iceland has its fair share of basalt rock which is great for mineralization. Australia has a lot of saline aquifers into which you could put CO2. Australia could pick up far more CO2 than they need to compensate for their own emissions, and they could sell the difference as certificates of carbon sequestration. 

Will DAC be a $1 trillion or more industry?

Klaus: If you think about this like a global energy waste management industry, the amount of revenues are going to be commensurate. If you think you can make money at $30 a ton in the long run, for 40 gigatons per year, this is a $1.2 trillion industry, which puts you at the same scale as automobiles, aviation, and a little below the energy scale. Right? You are a very large industry with fantastically large associated capital investments.

Direct air capture technologies need their own field. Just like aviation spontaneously created aeronautics. Let’s call it carbonetics.

Elegant circularity

Billy: What about prospects here for waste-to-energy? 

Klaus:  We are so used to having “reduced carbon” from the ground that we don’t really think about the possibility of capturing carbon from the air, adding renewable energy to it, and producing reduced carbon liquid fuel. This would be a great counterbalance to the residuals and distributed sources problems. Renewable energy is so cheap enough that you can play that game. Also, there is elegant circularity.

Billy: What are you most excited about?

Klaus: I am excited about two big things. Firstly, permanent sequestration certificates. I first wrote about this in 2000. The group at Oxford is doing great work on this now. You pay upfront for future waste cleanup and sequestration. We should balance the carbon as it enters the supply chain when oil and gas come out of the ground. Figuring out all the points in the entire supply chain is a waste of time and prone to gaming. For counterbalancing, you don’t get rewarded per se: In a way, it is a penalty, which is appropriate. Unlike mitigation, you simply have to clean up after yourself at the outset. 

The emergence of ‘carbonetics’

Secondly, I am excited for us all to co-create a vision for direct air capture technologies. Direct air capture technologies need their own field. Just like aviation spontaneously created aeronautics. Let’s call it carbonetics. This needs a 30-year runway.

Billy: Is it feasible to scale air capture to the gigaton scale?

Klaus: Why not?

Written by

Billy Gridley

William "Billy" Gridley is Climate & Capital's climate policy editor. He is a leading climate investor activist and former Ceres policy executive. A lifelong environmentalist, business entrepreneur and former arbitrage investor for Goldman Sachs and Bear Stearns. Like all of us, he is eager to shatter the status quo to accelerate climate action.