Climeworks is a carbon dioxide removal company building in Iceland

Carbon dioxide removal startup Climeworks On Tuesday, it announced that it would build a second commercial-scale factory in Iceland. According to the company, when fully operational in 18 to 24 months, the plant will capture and store 36,000 tonnes of carbon dioxide annually.

This represents a very small percentage of the global emissions of carbon dioxide emitted into the atmosphere each year. In 2021, it reached a record high. 36.3 billion metric tonsAccording to the International Energy Agency, an intergovernmental energy organization based in Paris.

However, this new plant, along with a small Icelandic plant capable of removing 4,000 tonnes annually, is set by Climeworks towards the goal of removing millions of tonnes of carbon dioxide annually by 2030. It’s just the first step. Tons of annuals by 2050.

These goals are orders of magnitude higher than where Climeworks currently exists, but as co-founder and co-CEO. Jean Wurtzbacher He told CNBC in May that the team has been there for 13 years and has seen significant improvements in technology during that time.

“We started with milligrams of carbon dioxide captured from the air, then from milligrams to grams, from grams to kilograms, from tons to 1,000 tons. So we are already quite a bit of these steps. I did a number. “

The idea of ​​drawing carbon dioxide from the air has recently gained more mainstream attention and has received hundreds of millions of funding. April, Google’s parent payment processor Stripe alphabetFacebook parents Meta, Shopify McKinsey they Team up to promise about $ 1 billion worth of purchases Carbon dioxide removal from companies developing technology. A few days later, Chris Sacca’s climate investment company, Lowercarbon Capital Announces $ 350 Million Fund Invest in carbon removal startups.

When Climeworks started, such momentum in the industry was certainly not the norm.

“At the time of 2009, the environment was definitely very different,” Wurzbacher told CNBC. “We had a lot of discussion about climate, but more and more about how to avoid emissions. When we came up with a way to recover carbon dioxide from the atmosphere, many people said,” Wait a minute, let’s stop. ” said. That wastes our time. “”

But now, in addition to private sector investment, it is the United Nations’ leading climate science organization. Intergovernmental Panel on Climate Change (IPCC)Included carbon recovery in the April update to combat global warming.

“Carbon dioxide removal (CDR) is needed to achieve net zero carbon dioxide and greenhouse gas emissions globally and nationally, offsetting” difficult-to-reduce “residual emissions. ” The technical outline of the IPCC Recommendation states:.. “CDRs are important for scenarios that limit global warming to less than 1.5 ° C or 2 ° C by 2100, regardless of whether global emissions reach near zero, net zero, or net negative levels. It is also an element. “

There are other ways to remove carbon dioxide from the atmosphere besides vacuuming it.

Tree planting is a natural method, but it requires much more land than the factories that Climeworks is building to remove the same amount of CO2. Also, it is difficult to explain how much CO2 is actually removed over a lifetime, as trees can die, be cut down, or be burned after they are planted. As Climeworks does, carbon dioxide mechanically removed from the air can be permanently stored underground.

When Wurzbacher and Gebald were convinced that technical carbon dioxide removal was needed to respond to climate change, many others weren’t.

“Of course, there were many skeptics at that time,” Wurtzbacher told CNBC. “We didn’t know what would happen, exactly what would happen, the time it would take to develop or extend the technology, but it was clear to us that we needed it.”

Wurtzbacher, 38, was only 25 when the company was founded. “We just kept going and didn’t listen too much,” he said.

After nearly a decade of developing carbon removal technology in the lab, Climeworks built the first technology. Factory in Hinwil, Switzerland2017.

At that time, Climeworks sold the harvested carbon dioxide to customers such as local greenhouses and used it to grow vegetables. Beverage maker Coca-Cola.. These types of early niche applications were “climate-independent,” Wurzbacher told CNBC, but it was just a demonstration of the technology itself.

“From the beginning, the goal has always been to come up with climate-related solutions,” says Wurzbacher. Early on, “I was looking for a niche application to move things because there was no market for negative emissions at that time.”

But a few years later, as consumers and businesses became more interested in climate change, the company began to recognize demand. In 2018, Climeworks began allowing individuals to pay anything from $ 36 to $ 120 per month Have the company remove some carbon dioxide from the atmosphere on their behalf. So far, more than 14,000 people have signed on.

At about the same time, MicrosoftStripe, Shopify are trading with Climeworks to demonstrate their commitment to climate change.

Currently, Climeworks mainly removes carbon and stores it underground by mineralizing it with basalt. Selling captured carbon dioxide for use in sodas and greenhouses is “more or less negligible,” Wurzbacher told CNBC.

The demand for greenhouse gas reductions comes primarily from companies that see the climate change goal of being able to sell their products as either carbon-neutral or carbon-negative as an “essential factor for future businesses.” “These companies, now our customers, are incorporating the fact that they are removing carbon from the atmosphere and making it an element of their products and services.”

In September 2021, Climeworks opened the first commercial direct air carbon capture and storage plant in Iceland. It consists of eight carbon recovery modules made from 44 shipping containers with an internal filter capable of removing 4,000 tonnes of carbon dioxide annually.

Climeworks chose Iceland to open its first factory.One of the reasons is the carbon storage partner CarbFixIs based there, because Iceland has a sufficient source of renewable energy. Burning fossil fuels that release carbon dioxide into the atmosphere to power carbon removal plants is counterproductive.

Until recently, Climeworks had raised about $ 150 million from private investors.But in April Climeworks Announces Raised $ 650 Million From a collection of investors such as Global Founders Capital, John Doerr and Swiss Re.

“The carbon dioxide removal market has basically grown exponentially over the last couple of years,” Wurzbacher told CNBC. “Basically, what’s happening right now is overwhelming.”

In addition to increasing capacity, Climeworks is also focused on reducing costs. In the middle of the decade, the cost per ton of carbon dioxide removed will probably be $ 500. By 2030, costs will be around $ 300 per ton and are projected to be around $ 200 per ton by the middle of the next decade.

Currently, Climeworks’ business relies on climate-sensitive companies and individuals, but government incentives build large enough factories for companies and such companies to impact climate change arbitration. It is considered a way to do it.Government can also help drive the demand for space Regulated and mandated carbon budget or carbon prices.

“”Ultimately, we will need policies to expand this. “

For now, Climeworks is focused on reducing the cost of carbon removal and expanding Climeworks’ operations with investor funding. But in the long run, “to deploy it from tens of millions to billions of tons, we need policies, and we need regulations to reach that scale and scale,” he said. Added.