In 2021, PBS described direct air capture, the technology-enabled act of removing carbon dioxide from the air, as an emerging technology only recently removed from the realm of science fiction. But by mid-2023, the world had 18 functional direct air capture (DAC) plants, with another 130 on the way. Meanwhile, companies like the Montreal-based Deep Sky and B.C’s Svante have raised millions in public and private capital to expand Canada’s decarbonization efforts into DAC.
Supporters of DAC have championed the technology as a crucial means of meeting our net-zero targets while accounting for the inherent challenges of cutting emissions alone. Critics have worried about its costs and potential disincentives for pursuing ambitious emissions reductions. Canada is leaning into it and other carbon removal technologies, with tax credits covering 60 percent of a DAC investment, meant to help reduce the carbon impact of Canada’s heavy industry. But are these incentives enough to help Canada meet its Paris Agreement obligations and hit net zero by 2050? And where does DAC fit into our broader climate strategy?
Getting serious about carbon
Sean McCoy, an assistant professor of chemical and petroleum engineering at the University of Calgary, describes DAC as a “close cousin” of carbon capture and storage (CCS), technology which is installed at large emission sources like gas power plants and separates CO2 so it can be sequestered. There are already eight CCS operations in Alberta and Saskatchewan.
But DAC, McCoy says, operates more like an artificial forest, drawing out CO2 already emitted into the atmosphere by any source, be it a factory, a car, or even your dog. While McCoy stresses that there are significant differences between the technologies, both can play a role in Canada’s environmental efforts.
“We’ve seen a spate of investment into DAC because we set net-zero targets in 2016,” McCoy explains. “We aren’t reducing our emissions fast enough, and we’re not growing CCS fast enough. So we need a technology to remove CO2 from the air.”
Jason Dion, a senior research director at the Canadian Climate Institute, a policy research and economic modelling centre, adds that in recent years “the conversation has got a lot more serious”, citing a suite of government incentives, growing corporate buy-in, and an increasing global push towards DAC.
“The investment tax credits Canada has put on the table are extremely helpful,” Dion says. “This really helps with the upfront capital cost, which can be quite high.”
Carbon removal is currently expensive. While headlines about the government potentially overspending on its $4.6 billion dollar CCS investment by an extra billion are ominous, McCoy notes that carbon removal technologies must be viewed in the context of the industrial emissions that it is offsetting.
Dion acknowledges that while these are “costly, capital intensive undertakings” that must keep the public purse in mind, we’re now at the point where any feasible technology needs to be explored.
“It felt like it was all talk for the longest time,” Dion says. “But corporate Canada’s commitments to meaningful reductions are a lot more serious than it was just five years ago. This doesn’t happen without policy. Absent a policy push, you don’t get development or deployment of technology on the pace and scale needed.”
Quest carbon capture and storage facility in Fort Saskatchewan Alta, on Friday November 6, 2015. Quest is designed to capture and safely store more than one million tonnes of CO2 each year an equivalent to the emissions from about 250,000 cars. Jason Franson/The Canadian Press
The climate context
For all the promise behind DAC, its current impact on carbon emissions is relatively minimal.
“Alberta is emitting north of 200 million tons of CO2 a year and any DAC project being proposed in Alberta might remove thousands of tons a year,” McCoy says.
In an ideal world, Canada will make enough advances in areas like alternative fuels that DAC could be used to help mop up the carbon emissions that remain necessary.
“We can’t emit CO2 at the rate we’ve been doing it,” McCoy says. “We’re going to have to move to electric vehicles, build more efficient buildings. To the extent that we continue burning fossil fuels, we should minimise the emissions that come from producing it.”
Dion points to heavy industry as an example of how DAC could be useful, as for some facilities it could be extremely difficult or costly to convert to alternative energy sources like electricity, hydrogen, or biofuels. Meanwhile, McCoy points out that aviation will continue to rely on fossil fuels for the foreseeable future. In both cases, DAC could offset unavoidable emissions. Before that point, however, the DAC industry—which sells carbon offsets or the CO2 itself for industrial use—will need to find a path towards profitability.
“DAC is more expensive than capturing CO2 at point sources, but there is a marketplace for people who are willing to pay hundreds of dollars a ton for emission reductions,” McCoy explains. “It’s small, but that’s the entry point. The magic trick the DAC industry will need to do is go from very small amounts at high prices to lower prices at much larger volumes. How that growth will happen is something the industry is trying to work out right now.”
There’s also the question of whether CCS and DAC projects can survive policy churn as governments change over the years. McCoy is optimistic, noting that the technology appears to enjoy fairly broad support across the political spectrum, albeit for very different reasons. To some, it’s a step towards a restructured energy economy. To others, it can help to sustain the oil and gas sector over a long period.
Regardless, carbon removal remains relatively non-partisan, especially since, Dion says, “companies recognize that their global reputation and even their long-term competitiveness really might require them to make significant cuts to their emissions.” Corporate Canada can also hedge against changes in government policy with carbon contracts for difference, which, in short, offer carbon pricing guarantees to hedge against policy upheaval, so that companies that work to reduce their emissions won’t suddenly lose the value of the carbon credits, if the price of carbon doesn’t increase as expected.
“The fact that’s gone from almost nowhere to having contacts signed in a couple of years really shows just how much consensus there is that policy stability matters,” Dion says. “It’s important when there’s big capital investments on the line.”
Facing the future
While 2050 may sound like a futuristic date where cars fly and the Stanley Cup has returned to Toronto, 25 years and change is not a long time given the scope of the climate change problem. Dion describes Canada’s strategy as a mix of safe bets—technology “that makes sense no matter what” but needs to be upscaled, such as electric cars and heat pumps—and wild card technology that may or may not prove scalable and cost-effective.
“We want and need both,” Dion says. “We don’t want the promise of wild cards to distract us from the work we must do on safe bets, but we also don’t want our desire to focus on safe bets distract from the work we need to do on wild cards.”
Industrial point source capture, Dion says, is a safe bet. The technology is effective, it’s feasible to imagine a future where it’s scaled up. There also aren’t many alternatives if we want to continue to enjoy products like cement and steel.
“I think we’ll see a lot of industrial processes being equipped with CCS,” Dion says. “There will still be demand for Canada’s oil and gas globally. We currently use fossil fuels to power most of our economy, and that will need to change. But these technologies hold real promise.”
DAC, on the other hand, is “almost the prototypical wild card.”
“If we can get it scalable, it can help us with some of the most difficult reductions,” Dion says. “Global climate models say that we have to pull CO2 out of the air. The worst-case scenario is that DAC simply never bears out as cost-effective. But we want pilot projects and incentives for innovation. It’s hard to say how big of a role DAC will play, but the more experience we have, the more we can imagine Canada playing an important role and having an economic opportunity.”
With Canada’s carbon tax looking like its days may be numbered, it can be tempting to hope these technologies will do all the work for us. But Dion says that our emissions are produced by industries and individuals alike.
“Canada has a large oil and gas sector, a large industrial sector. But households and their emissions are implicated as well. Policy should lead and create incentives for change, but the reality is that getting serious about climate change means looking at all parts of the inventory, it’s not enough to punt the problem to heavy industry.”
Direct air capture, if and when it overcomes the obstacles it faces, will therefore just be one tool in a robust toolbox. Only time will tell how effective that tool is, but the fact that we are now attempting to use it at all is a significant step forward.
“Our individual decisions, the way we choose to heat our house, get to work, where and how to vacation, all of these things are causing climate change,” McCoy says. “We’re investing in DAC because we hope that one day it will become cheap enough and perform well enough that we can dig ourselves out of this hole and make some of our choices easier. But it is fundamentally a future play, investing today doesn’t reduce our emissions today in any meaningful way. Where we’re at with DAC is just scratching the surface.”
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Editor’s note: A previous version of this article stated that there were two DAC plants operating in Alberta and Saskatchewan. However, these two plants are point-source carbon capture plants, not DAC. The Hub apologizes for the error.
