The Direct Air Capture Industry: Who Is Building the Carbon Removal Market?
Direct air capture (DAC) has shifted from a fringe concept to a rapidly scaling industry. As of 2025, roughly 150 companies globally are developing DAC technology, up from a handful a decade ago. Over $2.3 billion in private investment has flowed into the sector since 2021, and 130+ DAC facilities are in various stages of planning worldwide.
Two Dominant Technology Approaches
The industry splits along two main technology paths:
- Solid sorbent DAC
- Air passes over solid chemical filters that bind CO₂. Heat or vacuum releases the captured gas for storage. Used by Climeworks, Heirloom, and CarbonCapture Inc. Generally lower energy requirements and modular scalability.
- Liquid solvent DAC
- Air contacts a liquid chemical solution (typically potassium hydroxide) that absorbs CO₂. High-temperature processing regenerates the solvent and yields concentrated CO₂. Pioneered by Carbon Engineering (now Occidental/1PointFive). Suits large, centralized facilities.
Key Projects Shaping the Market
| Project | Company | Location | Capacity (t CO₂/yr) | Status |
|---|---|---|---|---|
| STRATOS | 1PointFive | Ector County, TX | 500,000 | Commissioning 2025 |
| Mammoth | Climeworks | Iceland | 36,000 | Operational 2024 |
| Project Cypress | Heirloom | Louisiana | 320,000 | Under development |
| Orchard One | Spiritus | Wyoming | 2,000,000 | Permitting |
Government Funding Accelerating Deployment
The U.S. Department of Energy has allocated up to $3.5 billion for DAC hub development through the Bipartisan Infrastructure Law. Two regional DAC hubs—Project Cypress in Louisiana and South Texas DAC Hub—have been selected for up to $1.2 billion in combined federal support. An additional $1.8 billion in DOE funding was opened in 2025 for mid- and large-scale commercial DAC facilities.
Carbon Credit Economics
Current DAC carbon removal costs range from $250–$600 per ton of CO₂, though several companies target sub-$100/ton within the decade. Major credit buyers include Microsoft, Stripe, Shopify, JPMorgan, and H&M Group through advance purchase agreements. The Frontier commitment—a $1B+ advance market commitment led by Stripe—has been a critical demand signal, with recent purchases from companies like Phlair ($30.6M) driving down costs through guaranteed volume.