Pulling Carbon from Thin Air: Does Direct Air Capture Have a Future?

Of all the technologies competing to shape the next phase of the energy transition, few are as ambitious or as commercially intriguing as Direct Air Capture (DAC).

Direct Air Capture systems work by using large fans, chemical sorbents (or solvents) to pull carbon dioxide directly out of ambient air. That carbon dioxide is either permanently stored underground or converted into usable products such as synthetic fuels. Unlike point-source capture, which scrubs CO₂ from a smokestack, DAC can be deployed anywhere there is power and storage capacity, addressing emissions regardless of where they originated. That location-agnostic quality is part of what makes it viable, since it is one of the few technologies that can deliver permanent, verifiable carbon removal at scale.

The sector remains small in absolute terms but is scaling. Market trackers estimate the global DAC market at roughly $1.2 billion in 2025, with projections in the $1.7–$5 billion range by 2030 and compound annual growth rates between 30% and 60% depending on the source. More than $2.3 billion of private capital has been deployed across DAC companies between 2021 and the first half of 2025, and over 80 facilities are targeted to be operational by year-end 2027.

How quickly costs will fall and which platforms achieve durable economics, are two issues that will help determine the technology’s future.

Why the Industry Matters Now

Two structural forces are converging to make DAC investable. The first is policy. In the United States, the One Big Beautiful Bill Act, signed in July 2025, preserved and reaffirmed the Section 45Q tax credit at $180 per ton for CO₂ captured via DAC and stored in dedicated geologic formations. Crucially, the law retained credit transferability, giving project developers a monetization path that does not depend on having their own tax liability. Treasury and IRS guidance released in late 2025 (Notice 2026-01) further established a safe harbor for verifying sequestered volumes, reducing regulatory uncertainty during a transition in EPA reporting requirements.

The second force is corporate demand. Hyperscalers and aviation companies with binding net-zero commitments have begun purchasing DAC credits in size.

Microsoft has contracted roughly 833,000 tons across multiple suppliers, Airbus has signed for 400,000 tons, and Frontier (a buyers' consortium including Stripe, Alphabet, Shopify, and Meta) has spread purchases across a dozen developers. These offtake agreements function much like power purchase agreements in early renewables in that they de-risk projects, anchor financing, and provide the long-duration revenue visibility that infrastructure capital requires.

Impact on the Future Energy Stack

It’s worth stating that DAC does not replace renewables. Instead, it complements them. The most credible decarbonization roadmaps assume the world will not eliminate every ton of emissions from aviation, heavy industry, agriculture, and shipping. DAC provides a tool to offset those residual emissions and, in some scenarios, to draw down legacy CO₂ already in the atmosphere. It also produces a feedstock since captured CO₂ can be combined with green hydrogen to make synthetic fuels, including the green methanol increasingly favored by maritime shippers (see piece on Decarbonizing the Shipping Industry). In that sense, DAC sits at an interesting junction between the concentrated carbon removal markets and the emerging clean-fuels economy.

Occidental Petroleum’s subsidiary, 1PointFive, is commissioning Stratos in West Texas. The facility is designed for 500,000 tons of capture per year, and BlackRock committed $550 million to a joint venture with 1PointFive, a notable signal of institutional appetite. Climeworks, Heirloom, CarbonCapture Inc., and a long tail of earlier-stage companies (Avnos, Verdox, Carbyon, Spiritus, Octavia Carbon) round out the field. That said, three suppliers account for roughly 80% of all DAC credits sold.

Real Risks Worth Acknowledging

DAC is not a sure thing. Current costs sit between roughly $500 and $1,000 per ton of CO₂ removed, which is above the $180 federal credit and above where voluntary carbon markets clear. Closing that gap depends on energy costs, efficiency, and scale economies that have yet to be proven at megaton volumes. The process is also energy-intensive and a meaningful build-out implies substantial demand for clean baseload power, which the grid may struggle to supply. Policy is another swing factor, because while 45Q has so far enjoyed bipartisan support, any retrenchment would materially impair project economics.

The Forward-Looking Investment Thesis

DAC today resembles solar in the early 2010s or battery storage in the late 2010s, which is to say that it is an enabling technology with steep cost curves ahead, anchored by policy, validated by sophisticated corporate buyers, and increasingly attracting infrastructure capital. The investment surface is broad, with developers (Climeworks, 1PointFive/Occidental), sorbent and equipment suppliers, geologic storage and pipeline operators, and the clean-power generators that will feed these facilities. Targets of $250–$350 per ton by 2030 are being discussed, and even if the upper bound of that range is achieved, the economics shift favorably.

For sure, DAC is not a near-term yield play. The buildout is a long term effort, but if it succeeds, it will have resulted in the development of a unique layer of the global climate infrastructure stack.

Sources

• https://www.globalccsinstitute.com/u-s-preserves-and-increases-45q-credit-in-one-big-beautiful-bill-act/

• https://www.cdr.fyi/blog/direct-air-capture-market-snapshot-2025

• https://blog.alliedoffsets.com/the-current-state-of-direct-air-capture

• https://www.researchandmarkets.com/reports/5954771/direct-air-capture-market-report

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