Direct Air Capture Systems Market Size (2024 – 2030)

The market size of Direct Air Capture Systems witnessed a valuation of USD 0.22 Billion in 2023, with projections indicating a growth to USD 2.76 Billion by the conclusion of 2030. Across the forecast period spanning from 2024 to 2030, the market anticipates a Compound Annual Growth Rate (CAGR) of 43.5%.

The Direct Air Capture (DAC) systems sector has been steadily garnering attention as a promising avenue for addressing climate change through the direct removal of carbon dioxide (CO2) from the atmosphere. Global efforts toward achieving net-zero emissions and addressing climate change challenges have stimulated the demand for DAC technologies. Numerous entities are actively engaged in the development and commercialization of DAC systems, typically employing advanced sorbents and chemical processes to capture CO2 from ambient air. The market has observed an uptick in investments and collaborations, with governments, corporations, and environmental organizations acknowledging DAC's potential in achieving carbon neutrality. Persistent challenges such as high costs and energy requirements are being addressed through technological advancements and scaling initiatives. The DAC systems market is expected to play a pivotal role in complementing conventional carbon capture and storage methods within the broader context of climate mitigation strategies.

Key Market Insights:

Innovations revolving around the utilization of carbon dioxide (CO2), such as the creation of synthetic fuels, hold the potential to render CO2 capture more cost-effective and foster a market for Direct Air Capture (DAC). Certain enterprises are already exploring the production of synthetic aviation fuels using CO2 extracted from the air alongside hydrogen.

Presently, 27 DAC facilities worldwide capture approximately 0.01 million tons of CO2 annually, with plans underway for at least 130 additional facilities in various stages of development. Should these initiatives come to fruition, DAC could achieve the deployment levels requisite by 2030 for attaining Net Zero Emissions by 2050.

In 2022, the United States augmented its support for DAC through the Inflation Reduction Act, introducing a tax credit of $180 per ton of CO2 captured. The European Commission aims to store up to 50 million tons of CO2 annually by 2030, inclusive of contributions from DAC. The United Kingdom announced funding of up to $25 billion for carbon capture projects, encompassing DAC initiatives. Canada's 2022 federal budget proposed a tax credit scheme for DAC projects, while Japan established a roadmap towards capturing 6 to 12 million tons of CO2 per annum by 2030, including contributions from DAC.

Drivers of the Direct Air Capture Systems Market:

Heightened Environmental Concerns and Climate Objectives are significantly bolstering the demand for direct air capture systems on a global scale.

The escalating awareness and apprehension regarding climate change and its detrimental repercussions have spurred an increased demand for sustainable measures to curtail greenhouse gas emissions, notably carbon dioxide (CO2). DAC, as a technology directly addressing the removal of CO2 from the atmosphere, aligns with worldwide endeavors to combat climate change and attain carbon neutrality or net-zero emissions. Businesses and governments are facing mounting pressure to embrace cleaner technologies, with DAC providing a tangible avenue for actively mitigating CO2, thereby contributing to climate objectives.

Governmental Policies and Incentives are attracting traction within the direct air capture systems market, fostering its expansion.

Governments worldwide are implementing policies and offering financial incentives to stimulate the development and deployment of DAC technologies. Initiatives encompassing funding schemes, tax credits, and regulatory frameworks are being established to bolster research, innovation, and the scaling up of DAC endeavors. Such governmental support not only furnishes financial backing but also signifies a commitment to cultivating a market for DAC, thereby amplifying investor confidence and propelling further industry advancement.

Restraints and Challenges in the Direct Air Capture Systems Market:

Cost Hurdles represent a predominant challenge for enterprises operating within the DAC market.

A notable challenge encountered within the Direct Air Capture (DAC) market pertains to the substantial costs associated with the technology. DAC processes necessitate considerable energy inputs for the capture and extraction of carbon dioxide from the air. The energy requisites, coupled with the costs of advanced materials and technologies integral to DAC systems, contribute to the overall operational expenses. Mitigating these costs stands as a pivotal factor for DAC to emerge as a widespread and economically viable solution for carbon capture.

Energy Consumption and Environmental Impact linked with the direct air capture systems market present notable impediments.

Another challenge prevalent in the DAC domain pertains to the considerable energy consumption linked with DAC processes. Numerous DAC technologies rely on energy-intensive chemical processes or large-scale mechanical systems, thereby amplifying their environmental footprint. Should the energy utilized for DAC stem from non-renewable sources, it could potentially offset the benefits of carbon reduction. Consequently, enhancing the energy efficiency of DAC systems and integrating them with renewable energy sources emerge as critical challenges necessitating resolution for the enduring sustainability of DAC solutions.

Opportunities in the Direct Air Capture Systems Market:

The Direct Air Capture (DAC) systems market stands primed for substantial expansion as global focus intensifies on mitigating climate change.

With a mounting recognition of the imperative to diminish carbon dioxide (CO2) levels within the atmosphere, DAC systems present a promising avenue by actively extracting CO2 directly from the air. This burgeoning market landscape heralds opportunities for innovative technologies and enterprises specializing in DAC systems. Governments, industries, and individuals alike are seeking effective and scalable strategies to achieve carbon neutrality, thus fostering an environment conducive to market expansion. Advancements in DAC technology, alongside supportive policies and incentives, engender a propitious setting for the proliferation of the market, thereby nurturing avenues for investment, collaboration, and the development of sustainable solutions to combat climate change.

Segmentation Analysis

Direct Air Capture Systems Market - By Technology Type:

• Chemisorption
• Adsorption
• Absorption

The dominant segment within the direct air capture (DAC) systems market is Absorption, holding a market share of 62%. DAC systems utilizing absorption technology employ liquid solvents to capture and absorb CO2 from the atmosphere. The prevalence of this technology is attributed to its maturity, proven efficiency, and suitability for large-scale industrial applications. Typically utilizing amine-based solvents, absorption-based DAC systems demonstrate high CO2 absorption capacities and can be regenerated for multiple usage cycles, ensuring continuous and reliable operation. The familiarity of absorption technology within the broader realm of carbon capture contributes to its widespread acceptance, positioning it as the largest segment in the DAC market.

The fastest-growing segment in direct air capture (DAC) technology is Chemisorption, with a growth rate of 12.3%. Chemisorption-based DAC systems have gained traction due to their efficiency in chemically binding with atmospheric carbon dioxide (CO2). This method involves specific chemical reactions that enhance capture rates and potentially reduce energy requirements compared to other DAC technologies. The accelerated interest and investments in addressing climate change, coupled with the growing recognition of the necessity for scalable and efficient carbon removal solutions, have propelled the rapid advancement and adoption of chemisorption-based DAC systems.

Direct Air Capture Systems Market - By End-Use Industry:

• Oil and Gas
• Food and Beverage
• Automotive
• Chemicals
• Healthcare
• Others

The largest segment in this market is the Oil and Gas industry, representing a significant adopter of carbon capture technologies with a market share of 57%. Activities related to the extraction, refining, and processing of oil and gas contribute substantially to greenhouse gas emissions. The adoption of direct air capture systems in this industry is driven by the imperative to mitigate environmental impact and meet emissions reduction targets. The commitment of the oil and gas sector to sustainable practices, along with regulatory pressures, positions it as a leading adopter of direct air capture technologies, potentially making it the largest segment among the listed end-use industries.

The fastest-growing segment in direct air capture (DAC) systems among end-use industries is the Automotive sector, expected to grow at a rate of 16.7%. The automotive industry has displayed significant promise and potential for rapid expansion. With heightened global awareness of climate change, automotive companies face increasing pressure to reduce their carbon footprint. As a result, there is a growing emphasis on sustainable practices and a shift towards electric vehicles, leading automotive companies to explore innovative technologies like DAC to neutralize or offset their unavoidable emissions.

Direct Air Capture Systems Market - By Region:

• North America
• Asia-Pacific
• Europe
• South America
• Middle East and Africa

North America leads as the largest region in the direct air capture (DAC) systems market, boasting a market share of 39%. This position is attributed to robust technological innovations, substantial private and public investments, and a strong commitment to addressing climate change. The region has witnessed a surge in the development and deployment of DAC technologies, driven by favorable government policies, a well-established entrepreneurial ecosystem, and heightened awareness of the necessity for carbon capture and removal solutions.

The Asia-Pacific region emerges as the fastest-growing market for direct air capture (DAC) systems, with a Compound Annual Growth Rate (CAGR) of 18%. The region's rapid economic growth, increasing industrialization, and rising awareness of environmental sustainability have spurred significant investments in clean technologies, including DAC. The combination of high population density and industrial activity has heightened the focus on innovative approaches to mitigate carbon emissions, positioning Asia-Pacific as a pivotal growth hub for the direct air capture systems market.

Latest Trends/Developments:

One notable trend in the Direct Air Capture (DAC) systems market is the increasing emphasis on technological advancements to enhance efficiency and reduce costs. As the demand for scalable and cost-effective DAC solutions rises, there is a noticeable trend toward innovation in materials, processes, and system designs. This includes the exploration of novel materials for CO2 capture, improving energy efficiency in the DAC process, and optimizing overall system performance. This trend is pivotal for the widespread adoption of DAC technology, rendering it more economically viable and appealing to stakeholders across various sectors.

The Electro Swing Adsorption-Direct Air Capture (ESA-DAC) emerges as an innovative technology based on an electrochemical cell utilizing a solid electrode to adsorb and release CO2 through alternating charges. Under development in the United States and the United Kingdom, this approach presents a novel electrochemical solution for DAC. Additionally, Zeolites, recognized for their porous structure conducive to CO2 adsorption, have been adopted for DAC, with the first operational plant in Norway commissioned in 2022 under the project Removr, aiming to scale up to 2,000 tCO2/year by 2025. Furthermore, Passive DAC, focused on accelerating the natural process of converting calcium hydroxide and atmospheric CO2 into limestone, is being engineered in the United States by a company utilizing renewably powered kilns for CO2 separation.

A significant development in the DAC systems market is the increasing support from governments and international bodies. Policymakers globally are acknowledging the importance of DAC in achieving climate goals, leading to the implementation of supportive regulations, incentives, and funding programs. This heightened government backing, aligned with international climate agreements, creates a more conducive environment for businesses operating in the DAC sector. This development not only encourages research and development but also facilitates the deployment and integration of DAC systems into broader carbon mitigation strategies, thereby propelling the market forward.

Key Players:

1. Carbon Engineering
2. Climeworks
3. Global Thermostat
4. Infinitree
5. Carbon Clean Solutions
6. Skytree
7. Carbon Capture

In September 2022, Los Angeles-based CarbonCapture launched Project Bison in Wyoming, marking its first large-scale direct air capture (DAC) project. The initiative aims to capture and store 5 million tons of carbon dioxide annually by 2030. This project signifies a notable milestone in the growing DAC climate technology sector, with both government and private investments supporting such endeavors.