Climeworks – Pioneering a way forward for a greener world
Climeworks developed an innovative technology called “direct air capture” to remove CO₂ from the air so it can no longer contribute to climate change. Carbon removal solutions refer to removing existing CO₂ from the atmosphere, which enables a company to actively remove its unavoidable and historic emissions to reach net zero.
In April, Independent Capital Group visited Climeworks’ DAC-Plant in Hinwil, which is located on top of a waste incineration plant. The plant delivered electricity and heat to operate the DAC-modules.
Although the plant in Hinwil ceased operations in October 2022, it is still fully intact. The stacked modules contain a fan which draws in air. The air flows through a specially treated cellulose-based filter material. Like a sponge, the filter absorbs CO₂ molecules until it is saturated. To reactivate it, the filter is placed under vacuum and heated. The CO₂ molecules, which are only loosely attached, detach from the surface, and are temporarily stored. One cycle lasts around 4 hours – whereby the first 1.5 hours, air is sucked in and the rest of the time the conversion takes place. The CO₂ was then sold via underground pipeline to the nearby greenhouse (picture 3) to boost the growth of vegetables. Another sales channel were beverage companies that use CO₂ in their bottled drinks.
Since the commissioning of its first direct air capture and utilization plant in 2017, the company has scaled up and changed its focus. Climeworks developed the world’s first commercial direct air capture & storage facility in Iceland. Operations started in September 2021 – the plant has a capacity of up to 4’000 tons of CO₂ per year. It is 100% powered by clean geothermal energy and, unlike the Hinwil plant, the CO₂ captured at Orca is permanently stored underground through mineralization. Climeworks chose Iceland for its cheap and clean electricity supply as well as the geological conditions that allow easy and safe underground storage. The next plant is already in construction and will go online in 2024 – the “Mammoth” plant, also in Iceland, will add up to 36’000 tons of capacity per year.
The company aims to reach multi-megaton capacity in the 2030s, while the long-term goal is to reach gigaton capacity by 2050. Recently, the company expanded into the US in the wake of the country’s $369 billion climate bill, which provides significant financial incentives for climate tech companies and room for growth to achieve the ambitious goals it has set for itself.
Direct Air Capture and Storage as a Business
Climeworks offers a unique carbon removal service, where companies and individuals can remove their emitted CO₂ via subscription or a one-off payment. People can choose an amount they want to remove in their name and, in return, Climeworks will provide a confirmation of removal and a third-party verified certificate to the buyer. Most of Orca’s capacity has been sold already. Nevertheless, individuals and companies can purchase carbon removal capacity from future facilities, such as Mammoth.
Companies have already tapped in, as demonstrated by the list of notable corporate clients such as Microsoft, Swiss Re and Audi who chose Climeworks as a partner on their journey to net zero. Also, investors are showing great interest. The company collected USD 650 million in the most recent equity raise, the largest-ever equity round into DAC, valuing the company at over USD 1 billion.
The future seems bright for Climeworks as the company offers a unique way to fight climate change. We at Independent Capital Group firmly believe that carbon removal technologies can be an important accelerator along the energy transition/road to green. Visiting Climeworks and learning about their technology has strengthened us in this belief. It certainly got us thinking about how we could improve the climate footprint of our resource-intensive financial solutions. Many thanks to Dominique Kronenberg, Chief of Staff, for the interesting tour and insights.
Visit www.climeworks.com for more information.