DAC’s bumpy road to commercial scale

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Oct 3, 2024

In this engaging discussion, Andreas Aepli, CFO of Climeworks and a pivotal leader in direct air capture (DAC), shares insights from the forefront of the climate tech revolution. He reveals the real hurdles Climeworks faces, like dealing with extreme weather and securing CO2 purity. Andreas argues for transparent practices to gain public trust and explores the necessity of a measured scale-up in DAC deployment. He also dives into pricing strategies and the complexities of financing a carbon removal plant, foreseeing increased supply constraints in the coming years.

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ANECDOTE

Orca's Early Challenges

Climeworks faced unexpected challenges after launching Orca, their first commercial DAC plant.
These included quality fluctuations in filter supplies, extreme Icelandic weather, and CO2 purity sensitivity affecting sequestration.

INSIGHT

Transparency Builds Trust

Transparency about DAC's challenges is crucial for building trust with customers and partners.
Overpromising and underdelivering can lead to loss of faith in the industry.

INSIGHT

DAC Market Growth

The DAC market has grown significantly due to early buyers like Microsoft.
More companies are now participating, including tech companies, financial institutions, and hard-to-abate industries.

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The world’s first large-scale, commercial direct-air capture (DAC) plants are coming online – or are about to. How soon will we see a boom in high-quality, durable DAC supply?

In this episode, Shayle talks to Andreas Aepli, chief financial officer of Climeworks, the world’s largest provider of DAC. They talk about Climeworks’ challenges with its two commercial plants – the kinds of challenges Andreas argues the industry needs to be transparent about in order to earn the trust of skeptical buyers. Shayle and Andreas also cover topics like:

The real-world challenges of building a DAC plant, like extreme weather, supply-chain quality issues, CO2 purity, and more
Why Andreas advocates a step-by-step scale-up of progressively larger deployments
How to set pricing and and structure a carbon removal contract
How to build a capital stack for a carbon removal plant
Why Andreas believes the market will become even more supply-constrained in the next few years

Recommended resources

Latitude Media: Google says it's the first to purchase direct air capture for $100 per ton

Latitude Media: Can a new generation of DAC companies overcome the tech’s big challenges?

Latitude Media: Climeworks begins to offer “PPAs” for carbon removal

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