Direct Air Capture (DAC) Systems Market Size (2024 – 2030)

The Direct Air Capture (DAC) Systems Market was valued at USD 0.22 Billion in 2023 and is projected to reach a market size of USD 2.76 Billion by the end of 2030. Over the forecast period of 2024-2030, the market is projected to grow at a CAGR of 43.5%.

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The direct air capture (DAC) systems market has been steadily gaining traction as a promising solution to combat climate change by removing carbon dioxide (CO2) directly from the atmosphere. The increasing global focus on achieving net-zero emissions and addressing the challenges of climate change has propelled the demand for DAC technologies.

Various companies are actively involved in developing and commercializing DAC systems, which typically employ advanced sorbents and chemical processes to capture CO2 from ambient air. The market has witnessed growing investments and partnerships, with governments, corporations, and environmental organizations recognizing the potential of DAC in achieving carbon neutrality.

Challenges such as high costs and energy requirements continue to be addressed through technological advancements and scaling efforts. The DAC systems market is expected to play a crucial role in complementing traditional carbon capture and storage methods in the broader context of climate mitigation strategies.

Key Market Insights:

• Innovations in using carbon dioxide (CO2), such as creating synthetic fuels, could make capturing CO2 more affordable and create a market for Direct Air Capture (DAC). Some companies are already working on making synthetic aviation fuels using CO2 captured from the air and hydrogen.
• Currently, 27 DAC plants globally capture about 0.01 million tons of CO2 each year, with plans for at least 130 more in various stages of development. If all these plans go ahead, DAC could reach the deployment level needed by 2030 for achieving Net Zero Emissions by 2050.
• In 2022, the United States increased funding for DAC through the Inflation Reduction Act, offering 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, including from DAC.
• The UK announced funding of up to $25 billion for carbon capture projects, including DAC.
• Canada's 2022 federal budget proposed a tax credit for DAC projects, and Japan set a roadmap to capture 6 to 12 million tons of CO2 per year by 2030, including from DAC.

Direct Air Capture Systems Market Drivers:

Environmental Concerns and Climate Goals are extensively increasing the demand for direct air capture systems globally

The growing awareness and concern about climate change and its adverse effects have led to increased demand for sustainable solutions to reduce greenhouse gas emissions, particularly carbon dioxide (CO2). DAC, as a technology that directly addresses CO2 removal from the atmosphere, aligns with global efforts to combat climate change and achieve carbon neutrality or net-zero emissions. Businesses and governments are under pressure to adopt cleaner technologies, and DAC provides a tangible method for actively removing CO2, contributing to climate goals.

Government Policies and Incentives are attracting the direct air capture systems market, increasing its growth

Many governments worldwide are implementing policies and offering financial incentives to encourage the development and deployment of DAC technologies. Funding initiatives, tax credits, and regulatory frameworks are being established to support research, innovation, and the scaling up of DAC projects. Such government backing not only provides financial support but also signals a commitment to creating a market for DAC, boosting investor confidence and driving further development in the industry.

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Direct Air Capture Systems Market Restraints and Challenges:

Cost Challenges is the biggest challenge for businesses in the DAC market

One significant challenge in the Direct Air Capture (DAC) market is the high cost associated with the technology. DAC processes require substantial energy inputs to capture and remove carbon dioxide from the air. The energy demand, coupled with the cost of advanced materials and technologies involved in DAC systems, makes the overall operation expensive. Reducing these costs is crucial for DAC to become a widespread and economically viable solution for carbon capture.

Energy Consumption and Environmental Impact associated with direct air capture systems market is a major hinderance

Another challenge is the considerable energy consumption associated with DAC processes. Many DAC technologies rely on energy-intensive chemical processes or large-scale mechanical systems, contributing to their environmental footprint. If the energy used for DAC is derived from non-renewable sources, it could offset the carbon reduction benefits. Therefore, finding ways to enhance the energy efficiency of DAC systems and integrating them with renewable energy sources are critical challenges to address for the long-term sustainability of DAC solutions.

Direct Air Capture Systems Market Opportunities:

The Direct Air Capture (DAC) systems market is poised for significant growth as the global focus on mitigating climate change intensifies. With increasing awareness of the need to reduce carbon dioxide (CO2) levels in the atmosphere, DAC systems offer a promising solution by actively removing CO2 directly from the air. This burgeoning market presents opportunities for innovative technologies and companies specializing in DAC systems, as governments, industries, and individuals seek effective and scalable strategies to achieve carbon neutrality. Advancements in DAC technology, coupled with supportive policies and incentives, create a conducive environment for market expansion, fostering opportunities for investment, collaboration, and the development of sustainable solutions to combat climate change.

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Segmentation Analysis

Direct Air Capture Systems Market - By Technology Type:

• Chemisorption

• Adsorption

• Absorption

Absorption technology is the dominant and most widely adopted segment within the direct air capture (DAC) systems market having a market share of 62%. Absorption-based DAC systems utilize liquid solvents to absorb and capture CO2 from the air. This technology's prevalence can be attributed to its maturity, proven efficiency, and compatibility with large-scale industrial applications.

The liquid solvents, often amine-based, have demonstrated high CO2 absorption capacities and can be regenerated for multiple use cycles, making them suitable for continuous and robust operation. The familiarity of absorption technology within the broader field of carbon capture has contributed to its widespread acceptance and implementation, positioning it as the largest segment in the DAC market.

The fastest-growing segment in direct air capture (DAC) technology is Chemisorption growing at a rate of 12.3%. Chemisorption-based DAC systems gained momentum due to their efficiency in chemically binding with carbon dioxide (CO2) from the air. This method involves specific chemical reactions that result in a higher capture rate and potentially lower energy requirements compared to other DAC technologies.

The growing interest and investment in addressing climate change, coupled with increasing recognition of the need 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

Oil and Gas industry is the largest segment in this market and a prominent adopter of carbon capture technologies due to its significant carbon emissions having a market share of 57%. The extraction, refining, and processing activities in the oil and gas sector contribute substantially to greenhouse gas emissions. The adoption of direct air capture systems in this industry has been driven by the need to mitigate environmental impact and comply with emissions reduction targets. The oil and gas sector's commitment to sustainable practices and regulatory pressures may position it as a leading adopter of direct air capture technologies, making it potentially the largest segment among the listed end-use industries.

The fastest-growing segment in direct air capture (DAC) systems by the end-use industry is Automotive expected to grow at a rate of 16.7%. The Automotive sector has shown significant promise and potential for rapid growth. As global awareness of climate change intensifies, the automotive industry is under increasing pressure to reduce its carbon footprint. With a growing emphasis on sustainable practices and a shift towards electric vehicles, automotive companies are exploring innovative technologies like DAC to neutralize or offset their unavoidable emissions.

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Direct Air Capture Systems Market - By Region:

• North America

• Asia- Pacific

• Europe

• South America

• Middle East and Africa

North America is the largest region in the direct air capture (DAC) systems market having market share of 39%, due to robust technological innovation, significant private and public investments, and a strong commitment to addressing climate change. North America has seen a surge in the development and deployment of DAC technologies, driven by favorable government policies, a well-established entrepreneurial ecosystem, and a heightened awareness of the need for carbon capture and removal solutions.

Asia-Pacific region is positioned as the fastest-growing market for direct air capture (DAC) systems growing with a CAGR of 18%. The rapid economic growth, increasing industrialization, and rising awareness of environmental sustainability in countries across Asia-Pacific have driven significant investments in clean technologies, including DAC. The region's high population density and industrial activity contribute to a greater focus on innovative approaches to mitigate carbon emissions, positioning Asia-Pacific as a key growth hub for the direct air capture systems market.

Latest Trends/ Developments:

• One prominent trend in the Direct Air Capture (DAC) systems market is the increasing focus on technological advancements to enhance efficiency and reduce costs. As the demand for scalable and cost-effective DAC solutions rises, there's a noticeable trend toward innovation in materials, processes, and system designs. This involves exploring novel materials for capturing CO2, improving energy efficiency in the DAC process, and optimizing overall system performance. This trend is crucial for the widespread adoption of DAC technology, making it more economically viable and attractive to stakeholders across various sectors.
• Electro Swing Adsorption-Direct Air Capture (ESA-DAC) is an emerging technology based on an electrochemical cell that utilizes a solid electrode to adsorb and release CO2 through alternating charges. Currently under development in the United States and the United Kingdom, this approach presents an innovative electrochemical solution for DAC. 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. Passive DAC, centered 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 growing support from governments and international bodies. Policymakers globally are recognizing the importance of DAC in achieving climate goals and are implementing supportive regulations, incentives, and funding programs. Increased government backing and alignment with international climate agreements create a more favorable 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 driving 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, as 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. The project signifies a notable milestone in the growing DAC climate technology sector, with both government and private investments supporting such endeavors.

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