While some small applications in the US merchant market pay well over $100/ton for high-purity CO 2, the average price for CO 2 used in EOR (by far the largest market) is approximately $40/ton, reflecting low production costs (Núñez-López and Moskal 2019). 2017).īut the existing commercial market that provides CO 2 relies on sources that are much cheaper than DAC, including capture from bioethanol and ammonia production plants (largely for the merchant market) and natural/geological sources (largely for the EOR market) (Lorch 2021 Nichols et al. There is considerable ongoing research effort to expand such uses, and small amounts of early revenue for the DAC industry already come from niche utilization markets (Sandalow et al. The sale of CO 2 removed from the atmosphere to these markets is known as CO 2 utilization. Currently, none are valuable or reliable enough on their own for a DAC company to depend on exclusively, which means that complex revenue “stacks” are necessary to make projects economically viable.Īlthough CO 2 is an unwanted pollutant in the atmosphere, it has economic value in uses such as enhanced oil recovery (EOR), air to fuels, cement and concrete, commodity chemicals, and food and beverage. Some combinations of them can be jointly claimed by DAC facilities, while others are mutually exclusive. These options have significantly different values, market sizes, and reliability. Therefore, realization of the technology’s climate potential requires an answer to the question “Who pays for DAC?”Ĭompanies that build and operate DAC facilities have three basic options for securing revenue: sell CO 2, participate in voluntary offset markets, and receive policy subsidies. Investments in research, development, and demonstration (RD&D) and learning by doing will bring this cost down over time, but the challenge of finding revenues will persist (Baker et al. This is particularly challenging for DAC because it does not directly displace a technology or product with an existing market.Īlso, the current cost of the technology, roughly $500 per ton of carbon dioxide (tCO 2), is high compared to most other options for removing CO 2 from the atmosphere (NASEM 2018). However, as with all technologies, DAC cannot reach large-scale deployment without a profitable business model, in which the cost of building and operating DAC facilities is offset by revenue from one or more sources. These features have led to a great deal of interest in the technology, and aspirations to deploy it at large scale as part of the response to the climate crisis (Hanna et al. It is location-flexible, uses relatively little land area, and produces a verifiable, high-purity stream of CO 2 that can be permanently sequestered or utilized for a variety of purposes. The technological promise of DAC will be largely irrelevant to the climate crisis if the question “who pays?” cannot be resolved.ĭirect air capture (DAC) is a key climate technology with the potential to make major contributions to stabilizing atmospheric CO 2 levels (McQueen et al.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |