Current Status of Carbon Capture Technologies and Markets

Current Status of Carbon Capture Technologies and Markets

Changes Expected During the "Trump 2.0" Era

Under a possible "Trump 2.0" era, the expansion of oil and gas production is expected. As a result, Enhanced Oil Recovery (EOR), which uses CO2 in oil fields, will become essential. However, due to CO2 shortages in the U.S., the growth potential of carbon capture technology (CCUS) is high.
Through the Inflation Reduction Act (IRA), the U.S. has strengthened tax credits for CCUS projects, providing incentives of up to $85 per ton of captured carbon. Additionally, major oil companies like ExxonMobil and Occidental Petroleum have received tax credits amounting to $370 billion, boosting CCUS investments.

• ExxonMobil is planning to apply carbon capture technology to natural gas power plants that supply electricity to data centers.
• Chevron, through its subsidiary Chevron New Energies, is also actively exploring carbon capture technologies for natural gas power plants.

Given this context, DAC (Direct Air Capture), a type of CCS (Carbon Capture and Storage), is expected to gain momentum. Additionally, Elon Musk's carbon removal competition, which he is actively promoting, deserves attention during this period.

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Overview of DAC (Direct Air Capture)

• DAC is a technology that captures CO2 directly from the atmosphere. The captured CO2 can either be stored deep underground (CCS) or utilized for industrial purposes (CCU).
• Since atmospheric CO2 concentration is only 0.04%, DAC consumes more energy than other capture technologies and is the most expensive form of carbon capture. (In comparison, CO2 concentration in coal power plant emissions is 14-15%.)
• Due to high costs, DAC demand heavily relies on government climate policies and incentives.
• Building CO2 storage infrastructure typically takes 4–10 years.
• For example, Switzerland's Climeworks uses DAC to supply CO2 for manufacturing carbonated beverages.
• As of 2021, the International Energy Agency (IEA) reported that there were 19 DAC plants worldwide, collectively capturing about 10,000 tons of CO2 annually, equivalent to the emissions of around 2,000 cars.

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Global Trends

[United States]

• 2021: The Department of Energy launched the Carbon Negative Shot Initiative, aiming to develop carbon capture technology capable of capturing at least 1 billion tons of CO2 at costs below $100 per ton (current costs are around $600 per ton).
• 2022: The IRA increased tax credits for DAC-captured CO2 to further support development.
• 2023: The Department of Energy allocated $1.2 billion for DAC projects.

[Europe]

• The EU Commission set a target to store 50 million tons of CO2 annually, including DAC, by 2030.
• The UK allocated up to £20 billion (approx. $25 billion USD) in 2023 for CCUS projects.

[Private Sector]

• Frontier:
• Aims to invest $10 billion USD in carbon removal technologies by 2030.
• Funded by companies like Alphabet, Meta, Shopify, and others.
• Conditions for investment: Carbon removal solutions must sustain CO2 removal for at least 1,000 years and propose a roadmap to reduce costs to $100 per ton or less.
• Musk Foundation:
• Running a $100 million competition to promote carbon removal technologies.
• Bill Gates’ Breakthrough Energy Ventures (BEV):
• A climate-focused investment fund established in 2015, now managing three funds with a total size of $2.3 billion USD.
• Invested in DAC-related companies like 44.01, Dioxycle, and Heirloom.

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Key Companies

[Climeworks]

• A Swiss DAC startup founded in 2009, having raised about $1 billion USD in investments.
• Utilizes a filter adsorption method to capture CO2 and relies on geothermal energy in Iceland for operations.
• Orca Project: Captures 4,000 tons of CO2 annually, making it the world's largest commercial DAC facility.
• Certified by third parties, it issues carbon removal credits.
• Captured CO2 is injected into basalt rock layers 800–2,000 meters underground, turning into carbonate minerals within two years for permanent storage.
• Currently building another DAC plant, Mammoth, in Iceland.

[1POINT FIVE]

• A subsidiary of Occidental Petroleum specializing in CCUS.
• Constructing Stratos, the world’s largest DAC plant, in Texas, with operations expected to begin in 2025.
• Signed long-term carbon removal credit contracts with Boston Consulting Group, Amazon (250,000 tons over 10 years), and Microsoft (500,000 tons over six years).
• Microsoft aims to achieve carbon negativity by 2030 and has stipulated that captured CO2 cannot be used for oil or gas production.