Throughout 2022, we took great strides on our journey toward gigaton direct air capture capacity while the carbon removal industry took further shape. In an industry that is ever-changing and bursting with innovation, one year can feel as if a decade has already passed.
Before 2023 begins, we want to look back at where these past months have taken us: from closing the largest equity round to date in the carbon dioxide removal (CDR) field to the groundbreaking of our largest direct air capture and storage (DAC+S) plant ‘Mammoth,’ and the launch of the first full-chain methodology for CDR produced via DAC+S, implemented at ‘Orca.’
Spring: new IPCC estimates confirm the importance of scaling CDR as remarkable investments are made
At the beginning of the year, we jointly hosted a virtual fireside chat with Carbon180, where Erin Burns, Executive Director at Carbon180, and Christoph Beuttler, Climeworks’ Chief Climate Policy Officer, provided a bright climate policy outlook for the year: further mobilization of investments by the U.S. and a regulatory focus by the EU, which is exactly what we saw in the months to follow. Establishing funding and regulatory frameworks is crucial to bringing the CDR industry to scale to eventually remove billions of tons of CO₂ from the atmosphere. In its report on climate change mitigation published in April, the IPCC specified this number for the first time: DAC+S is expected to remove up to 310 gigatons of CO₂ by 2100 to help limit global warming to 1.5°C above pre-industrial levels.
While bringing more clarity, these numbers were a stark reminder of how large the challenge is that lies ahead of us. Shortly following the IPCC report, we received a new boost to continue our journey. Climeworks successfully raised USD 650 million in equity — the largest funding round ever closed by a CDR company to date. It was a major milestone for Climeworks and the entire industry, as our base of renowned investors demonstrated confidence in and appetite for high-quality CDR solutions.
Summer: Mammoth’s groundbreaking and the third DAC Summit catalyze new corporate commitment
The theme of investments accompanied us into the month of June, when we invited Nan Ransohoff, Head of Climate at Stripe, to discuss how Frontier’s advance market commitment will accelerate the CDR industry. As Nan underlined, the supply of high-quality CDR is currently limited, which is why guaranteeing long-term demand is crucial to send a signal to entrepreneurs. To put a spotlight on supply and demand in the DAC industry in particular, we published our first industry snapshot, where expert contributors weighed in on what policymakers, technology providers, investors, and businesses can do to support the sustainable growth of DAC.
Only nine months after the launch of "Orca," the world’s first commercial, large-scale DAC+S facility in operations, Climeworks broke new ground in Iceland. On June 28, we started the construction of our next DAC+S facility called Mammoth, which is designed with a nominal capture capacity of up to 36,000 tons of CO₂ per year — a magnitude larger than Orca. The groundbreaking of Mammoth was a major milestone for Climeworks’ deployment and clearly showed that our growth trajectory is not just reflected by the numerical targets that we set ourselves, but materializing in the real world.
With a rendering of Mammoth and the visualization of the scale-up steps that will follow it, our co-CEOs and co-founders Jan Wurzbacher and Christoph Gebald kicked off our third annual Direct Air Capture Summit at the end of June. Sixteen speakers — scientists, opinion leaders, pioneering companies, and policy experts — came together to discuss the importance of commitment from corporate players, role models from other industries, and political will for scaling DAC. In the weeks and months that followed, three pioneering businesses signed long-term agreements with Climeworks that exemplified this corporate commitment. We took our collaboration with Microsoft to the next level by becoming the first long-term, tech-based CDR supplier in their portfolio and signed multi-year agreements with UBS and PwC Switzerland. Such long-term commitments are crucial to scale the DAC industry because the guaranteed demand catalyzes financing of infrastructure, which in turn accelerates the scale-up of the whole DAC ecosystem behind it.
Fall: The focus on MRV grows while a turning point in Climeworks’ scale-up roadmap is reached
Together with the Bipartisan Infrastructure Law, the Inflation Reduction Act (IRA) passed earlier this year in the U.S. represents the most significant climate legislation in the country’s history: it is estimated that the IRA could cut U.S. emissions by around 40% below 2005 levels by 2030. The IRA provides a major boost to the DAC industry by increasing the 45Q tax credit value that DAC projects are eligible for to USD 180 per ton of CO₂ stored, up from USD 50 per ton of CO₂ stored. Combined with the recently announced DAC hub program, we can expect a flurry of new DAC projects to emerge in the U.S.
Until now, Climeworks is the only company with a commercial DAC+S facility in operation and made it onto the list of TIME100 Most Influential Companies of 2022, while co-CEOs and co-founders Christoph Gebald and Jan Wurzbacher were recognized by TIME100 NEXT. As more DAC projects will hopefully come to life in the coming months and years, the monitoring, reporting, and verification (MRV) of the CDR that is produced by these solutions is critical. Throughout 2022, we saw this topic gaining attention and were proud to contribute to the standardization of high-quality CDR. Together with Carbfix, Climeworks developed the world’s first full-chain methodology dedicated to CDR via DAC+S, which was validated by DNV. The methodology provides the requirements for stringent standards by which measurement and reporting of Climeworks’ CDR and Carbfix’s permanent mineralization can be third-party verified.
To sharpen our focus on DAC+S even more, we completed the commercial operations of our DAC plant in Hinwil, Switzerland, which delivered air-captured CO₂ for utilization. Both from a technology and market perspective, the facility was instrumental in enabling Climeworks to develop from a start-up into an operational company very early on. It marked a turning point in our scale-up journey that we were grateful to celebrate with our partners.
Winter: ending the year with significant construction progress and a milestone of the Climeworks team
With our DNV-validated methodology, Climeworks is the only DAC player to have established MRV around operating plants. Though powerful, such individual efforts need to be matched with a higher-level framework. We welcomed the EU Commission’s proposal for the first EU-wide voluntary framework to certify high-quality CDR and look forward to further details as regards specific CDR methods for concrete action. For now, businesses that integrate a CDR service like Climeworks into their strategy usually conduct their own due diligence on what a high-quality solution is. As we learned during our online webinar with Swiss Re, the insurance industry is particularly well-positioned to do this and accelerate demand.
Corporate demand is a decisive factor for technology deployment, which shows “the successful evolution from lab set-ups to large-scale removal capabilities,” as our Chief Technology Officer Carlos Härtel put it in Climeworks’ second industry snapshot. Climeworks started this journey in 2017 with Capricorn in Switzerland, continuing with Mammoth in Iceland and beyond. At the end of this year, we were proud to share that the cladding of Mammoth’s process hall has been completed, in addition to the first foundations for the collector containers and the maintenance hall.
Celebrating the achievements of 2022 would not be possible without the dedicated team that stands behind Climeworks’ vision to inspire 1 billion people to remove CO₂ from the air. In an emerging industry, human capital is rare. Finding the right talents to inspire climate action and realize the potential of CDR in the fight against global warming is a crucial component of Climeworks’ journey and the entire industry’s development. We were excited to reach the milestone of 300 Climeworkers in our growing team at the end of this year, including the newest members of our executive team: Douglas Chan as Chief Operations Officer, Jan Huckfeldt as Chief Commercial Officer, and Christoph Beuttler as Chief Climate Policy Officer.
Where will 2023 take us?
In our journey to gigaton capacity, we stay true to our guiding principles of high integrity, high quality, and continuous learning — with both passion and humility. With the alignment of climate science, governmental programs, and regulatory frameworks to build capacity towards the required goal of gigaton CO₂ removal by 2050, the resources to rigorously execute several projects, and a role to play in all major climate conversations — 2023 will see unprecedented momentum for Climeworks as a DAC technology leader, a scale-up company, and major CDR actor.
Specifically, the focus on MRV can only grow stronger and will no doubt be a major theme of 2023 and beyond. MRV is crucial for CDR providers and buyers to eventually have a defined market in terms of quality standards like permanence and additionality. From the final quality assurance through MRV to the first design and fundraising steps of a CDR project, the industry needs to grow massively in human capital. This is one of the main challenges that DAC and CDR providers will face in 2023 and beyond, in addition to fulfilling the high demand from businesses and investors for CDR and building a new sustainable supply chain.
We will continue to grow our Climeworks team in the next year — it’s a must. If we are to scale DAC technology to the required gigaton capacities as defined by climate science, we need to attract an unprecedented number of talents. And we are grateful to be part of such an inspiring community that makes this possible. Do you want to be a part of the team and help unlock Climeworks’ next milestone? Join us on our journey to inspire 1 billion people to remove CO₂ from the air. In 2023, more than ever before, this is an ambitious yet achievable vision.
Interested to learn more?
Learn how to assess the quality of carbon removal solutions in: Transparency in the carbon removal market.
Discover underground carbon dioxide storage by reading: What is underground mineralization of CO₂?
Check out our insights on: How carbon removal solutions fight climate change.