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Inside Climeworks’ big experiment to wrest carbon from the air
In the spring of 2021, the world’s leading authority on energy published a “roadmap” for preventing the most catastrophic climate change scenarios. One of its conclusions was particularly daunting. Getting energy-related emissions down to net zero by 2050, the International Energy Agency said, would require “huge leaps in innovation.”
Existing technologies would be mostly sufficient to carry us down the carbon curve over the next decade. But after that, nearly half of the remaining work would have to come from solutions that, for all intents and purposes, did not exist yet. Some would only require retooling existing industries, like developing electric long-haul trucks and carbon-free steel. But others would have to be built from almost nothing and brought to market in record time.
What will it take to rapidly develop new solutions, especially those that involve costly physical infrastructure and which have essentially no commercial value today?
That’s the challenge facing Climeworks, the Swiss company developing machines to wrest carbon dioxide molecules directly from the air. In September 2021, a few months after the IEA’s landmark report came out, Climeworks switched on its first commercial-scale “direct air capture” facility, a feat of engineering it dubbed “Orca,” in Iceland.
The technology behind Orca is one of the top candidates to clean up the carbon already blanketing the Earth. It could also be used to balance out any stubborn, residual sources of greenhouse gases in the future, such as from agriculture or air travel, providing the “net” in net-zero. If we manage to scale up technologies like Orca to the point where we remove more carbon than we release, we could even begin cooling the planet.
As the largest carbon removal plant operating in the world, Orca is either trivial or one of the most important climate projects built in the last decade, depending on how you look at it. It was designed to capture approximately 4,000 metric tons of carbon from the air per year, which, as one climate scientist, David Ho, put it, is the equivalent of rolling back the clock on just 3 seconds of global emissions. But the learnings gleaned from Orca could surpass any quantitative assessment of its impact. How well do these “direct air capture” machines work in the real world? How much does it really cost to run them? And can they get better?
The company — and its funders — are betting they can. Climeworks has made major deals with banks, insurers, and other companies trying to go green to eventually remove carbon from the atmosphere on their behalf. Last year, the company raised $650 million in equity that will “unlock the next phase of its growth,” scaling the technology “up to multi-million-ton capacity … as carbon removal becomes a trillion-dollar market.” And just last month, the U.S. Department of Energy selected Climeworks, along with another carbon removal company, Heirloom, to receive up to $600 million to build a direct air capture “hub” in Louisiana, with the goal of removing one million tons of carbon annually.
Two years after powering up Orca, Climeworks has yet to reveal how effective the technology has proven to be. But in extensive interviews, top executives painted a picture of innovation in progress.
Chief marketing officer Julie Gosalvez told me that Orca is small and climatically insignificant on purpose. The goal is not to make a dent in climate change — yet — but to maximize learning at minimal cost. “You want to learn when you're small, right?” Gosalvez said. “It’s really de-risking the technology. It’s not like Tesla doing EVs when we have been building cars for 70 years and the margin of learning and risk is much smaller. It’s completely new.”
From the ground, Orca looks sort of like a warehouse or a server farm with a massive air conditioning system out back. The plant consists of eight shipping container-sized boxes arranged in a U-shape around a central building, each one equipped with an array of fans. When the plant is running, which is more or less all the time, the fans suck air into the containers where it makes contact with a porous filter known as a “sorbent” which attracts CO2 molecules.
Courtesy of Climeworks
When the filters become totally saturated with CO2, the vents on the containers snap shut, and the containers are heated to more than 212 degrees Fahrenheit. This releases the CO2, which is then delivered through a pipe to a secondary process called “liquefaction,” where it is compressed into a liquid. Finally, the liquid CO2 is piped into basalt rock formations underground, where it slowly mineralizes into stone. The process requires a little bit of electricity and a lot of heat, all of which comes from a carbon-free source — a geothermal power plant nearby.
A day at Orca begins with the morning huddle. The total number on the team is often in flux, but it typically has a staff of about 15 people, Climeworks’ head of operations Benjamin Keusch told me. Ten work in a virtual control room 1,600 miles away in Zurich, taking turns monitoring the plant on a laptop and managing its operations remotely. The remainder work on site, taking orders from the control room, repairing equipment, and helping to run tests.
During the huddle, the team discusses any maintenance that needs to be done. If there’s an issue, the control room will shut down part of the plant while the on-site workers investigate. So far, they’ve dealt with snow piling up around the plant that had to be shoveled, broken and corroded equipment that had to be replaced, and sediment build-up that had to be removed.
Courtesy of Climeworks
The air is more humid and sulfurous at the site in Iceland than in Switzerland, where Climeworks had built an earlier, smaller-scale model, so the team is also learning how to optimize the technology for different weather. Within all this troubleshooting, there’s additional trade-offs to explore and lessons to learn. If a part keeps breaking, does it make more sense to plan to replace it periodically, or to redesign it? How do supply chain constraints play into that calculus?
The company is also performing tests regularly, said Keusch. For example, the team has tested new component designs at Orca that it now plans to incorporate into Climeworks’ next project from the start. (Last year, the company began construction on “Mammoth,” a new plant that will be nine times larger than Orca, on a neighboring site.) At a summit that Climeworks hosted in June, co-founder Jan Wurzbacher said the company believes that over the next decade, it will be able to make its direct air capture system twice as small and cut its energy consumption in half.
“In innovation lingo, the jargon is we haven’t converged on a dominant design,” Gregory Nemet, a professor at the University of Wisconsin who studies technological development, told me. For example, in the wind industry, turbines with three blades, upwind design, and a horizontal axis, are now standard. “There were lots of other experiments before that convergence happened in the late 1980s,” he said. “So that’s kind of where we are with direct air capture. There’s lots of different ways that are being tried right now, even within a company like Climeworks."
Although Climeworks was willing to tell me about the goings-on at Orca over the last two years, the company declined to share how much carbon it has captured or how much energy, on average, the process has used.
Gosalvez told me that the plant’s performance has improved month after month, and that more detailed information was shared with investors. But she was hesitant to make the data public, concerned that it could be misinterpreted, because tests and maintenance at Orca require the plant to shut down regularly.
“Expectations are not in line with the stage of the technology development we are at. People expect this to be turnkey,” she said. “What does success look like? Is it the absolute numbers, or the learnings and ability to scale?”
Danny Cullenward, a climate economist and consultant who has studied the integrity of various carbon removal methods, did not find the company’s reluctance to share data especially concerning. “For these earliest demonstration facilities, you might expect people to hit roadblocks or to have to shut the plant down for a couple of weeks, or do all sorts of things that are going to make it hard to transparently report the efficiency of your process, the number of tons you’re getting at different times,” he told me.
But he acknowledged that there was an inherent tension to the stance, because ultimately, Climeworks’ business model — and the technology’s effectiveness as a climate solution — depend entirely on the ability to make precise, transparent, carbon accounting claims.
Nemet was also of two minds about it. Carbon removal needs to go from almost nothing today to something like a billion tons of carbon removed per year in just three decades, he said. That’s a pace on the upper end of what’s been observed historically with other technologies, like solar panels. So it’s important to understand whether Climeworks’ tech has any chance of meeting the moment. Especially since the company faces competition from a number of others developing direct air capture technologies, like Heirloom and Occidental Petroleum, that may be able to do it cheaper, or faster.
However, Nemet was also sympathetic to the position the company was in. “It’s relatively incremental how these technologies develop,” he said. “I have heard this criticism that this is not a real technology because we haven’t built it at scale, so we shouldn’t depend on it. Or that one of these plants not doing the removal that it said it would do shows that it doesn’t work and that we therefore shouldn’t plan on having it available. To me, that’s a pretty high bar to cross with a climate mitigation technology that could be really useful.”
More data on Orca is coming. Climeworks recently announced that it will work with the company Puro.Earth to certify every ton of CO2 that it removes from the atmosphere and stores underground, in order to sell carbon credits based on this service. The credits will be listed on a public registry.
But even if Orca eventually runs at full capacity, Climeworks will never be able to sell 4,000 carbon credits per year from the plant. Gosalvez clarified that 4,000 tons is the amount of carbon the plant is designed to suck up annually, but the more important number is the amount of “net” carbon removal it can produce. “That might be the first bit of education you need to get out there,” she said, “because it really invites everyone to look at what are the key drivers to be paid attention to.”
She walked me through a chart that illustrated the various ways in which some of Orca’s potential to remove carbon can be lost. First, there’s the question of availability — how often does the plant have to shut down due to maintenance or power shortages? Climeworks aims to limit those losses to 10%. Next, there’s the recovery stage, where the CO2 is separated from the sorbent, purified, and liquified. Gosalvez said it’s basically impossible to do this without losing some CO2. At best, the company hopes to limit that to 5%.
Finally, the company also takes into account “gray emissions,” or the carbon footprint associated with the business, like the materials, the construction, and the eventual decommissioning of the plant and restoration of the site to its former state. If one of Climeworks’ plants ever uses energy from fossil fuels (which the company has said it does not plan to do) it would incorporate any emissions from that energy. Climeworks aims to limit gray emissions to 15%.
In the end, Orca’s net annual carbon removal capacity — the amount Climeworks can sell to customers — is really closer to 3,000 tons. Gosalvez hopes other carbon removal companies adopt the same approach. “Ultimately what counts is your net impact on the planet and the atmosphere,” she said.
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Despite being a first-of-its-kind demonstration plant — and an active research site — Orca is also a commercial project. In fact, Gosalvez told me that Orca’s entire estimated capacity for carbon removal, over the 12 years that the plant is expected to run, sold out shortly after it began operating. The company is now selling carbon removal services from its yet-to-be-built Mammoth plant.
In January, Climeworks announced that Orca had officially fulfilled orders from Microsoft, Stripe, and Shopify. Those companies have collectively asked Climeworks to remove more than 16,000 tons of carbon, according to the deal-tracking site cdr.fyi, but it’s unclear what portion of that was delivered. The achievement was verified by a third party, but the total amount removed was not made public.
Climeworks has also not disclosed how much it has charged companies per ton of carbon, a metric that will eventually be an important indicator of whether the technology can scale to a climate-relevant level. But it has provided rough estimates of how much it expects each ton of carbon removal to cost as the technology scales — expectations which seem to have shifted after two years of operating Orca.
In 2021, Climeworks co-founder Jan Wurzbacher said the company aimed to get the cost down to $200 to $300 per ton removed by the end of the decade, with steeper declines in subsequent years. But at the summit in June, he presented a new cost curve chart showing that the price was currently more than $1,000, and that by the end of the decade, it would fall to somewhere between $400 to $700. The range was so large because the cost of labor, energy, and storing the CO2 varied widely by location, he said. The company aims to get the price down to $100 to $300 per ton by 2050, when the technology has significantly matured.
Critics of carbon removal technologies often point to the vast sums flowing into direct air capture tech like Orca, which are unlikely to make a meaningful difference in climate change for decades to come. During a time when worsening disasters make action feel increasingly urgent, many are skeptical of the value of investing limited funds and political energy into these future solutions. Carbon removal won’t make much of a difference if the world doesn’t deploy the tools already available to reduce emissions as rapidly as possible — and there’s certainly not enough money or effort going into that yet.
But we’ll never have the option to fully halt climate change, let alone begin reversing it, if we don’t develop solutions like Orca. In September, the International Energy Agency released an update to its seminal net-zero report. The new analysis said that in the last two years, the world had, in fact, made significant progress on innovation. Now, some 65% of emission reductions after 2030 could be accounted for with technologies that had reached market uptake. It even included a line about the launch of Orca, noting that Climeworks’ direct air capture technology had moved from the prototype to the demonstration stage.
But it cautioned that DAC needs “to be scaled up dramatically to play the role envisaged,” in the net zero scenario. Climeworks’ experience with Orca offers a glimpse of how much work is yet to be done.
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Even as Iran retaliated against U.S. airstrikes, prices have stayed calm.
Oil prices have stayed stable so far following the U.S. strikes on Iranian nuclear facilities over the weekend, and President Donald Trump wants to keep it that way.
In two consecutive posts on Truth Social Monday morning, the president wrote “To The Department of Energy: DRILL, BABY, DRILL!!! And I mean NOW!!!” and “EVERYONE, KEEP OIL PRICES DOWN. I’M WATCHING! YOU’RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON’T DO IT!”
While Iran, of course, does not yet have an actual nuclear weapon, it does have a kind of “nuclear option” to retaliate: closing off the Strait of Hormuz, which separates the oil-rich countries like Qatar, Bahrain, Kuwait, and Iraq (and Iran’s own largest ports) from the Indian Ocean, and by extension all of global shipping. Iran’s parliament approved closing off the strait, but any real effort to do so would have to come from Iran’s most senior leadership, which has not so far seemed inclined to torpedo its own economy.
Markets, at least so far, do not see much more risk today than they did before the U.S. airstrikes. West Texas Intermediate oil price benchmark sat at just over $74 a barrel Monday morning, up substantially from its low of just over $57 in early May, but up only mildly from its $68 a barrel level on June 12, the day before Israel began bombing Iran. Prices are basically flat since Friday, even after Iran said it had launched a strike on an American base in Qatar.
“Multiple oil tankers crossing the Strait of Hormuz this morning, both in and outbound,” Bloomberg’s Javier Blas wrote on X Monday morning. “No[t] even a hint of disruption. Oil loading across multiple ports in the Persian Gulf appears normal. If anything, export rates over the last week are higher than earlier in June.”
As Greg Brew, an analyst at the Eurasia Group, told me, “The Hormuz risk is generally overstated. The Iranian threats are mostly rhetoric and meant for domestic political consumption. Hardliners in particular will use threats to close the strait as a means of letting off steam following the U.S. bombing of Fordow.”
“In reality,” he went on, “Iran faces a massive disparity in forces in the Gulf. A move to close Hormuz would be near suicidal as it would expand the scope of the war, drag in the Gulf states as well as the U.S., and imperil Iran’'s own energy exports at a time when the regime will need every financial and economic lifeline it can get.”
Inasmuch as oil prices have moved in the past few weeks, it’s been in response to the perceived increased risk of some kind of cataclysm to the world oil trade — even if the actual chances of the strait being entirely closed to tanker traffic remains low.
“Prices remain elevated on account of the regional risk, and are likely to remain in the $70s or low $80s until we see a pathway toward broader de-escalation,” Brew said.
For the American oil industry, however, a more nervous market might be a more profitable one.
Aniket Shah, an analyst at Jefferies, wrote a note to clients over the weekend attributing the increase since May to “rising tensions around the Strait of Hormuz, which channels ~20% of global oil shipments.”
“While the US imports less Middle Eastern oil than in past decades, global price shocks still drive up domestic fuel and transport costs,” he wrote.
In the months running up to the recent oil price increase, American drillers were facing an unpleasant combination of tariffs, increased production overseas (encouraged by Trump), and low prices at home, which wrecked their capital planning. Some domestic oil and gas drillers like Matador in April and Diamondback in May told their investors they planned to decrease their planned capital expenditures; over the past two months, drillers have been slowly but steadily taking rigs offline, according to the widely watched Baker Hughes rig count.
Conflict in the Middle East could therefore provide some relief (at least for the oil and gas industry) at home. “U.S. producers are among the winners here,” Brew told me. “A few months of higher prices will offer a nice hedge for shale drillers and ease their plans to reduce expenditure and output for the year.”
But higher profits for oil drillers will not necessarily translate into increased production, as Trump has commanded. “Since this is all based on risk premium and does not reflect a change in fundamentals, shale drillers are likely to deliver the gains to shareholders rather than pumping the money back into production,” Brew explained. “An overall drop in U.S. onshore output in 2025 is probably still in the cards.”
In that scenario, oil company profits would rise while production would fall year-over-year. And that would likely mean an even more infuriated Trump, who has also recently reignited his campaign to push Federal Reserve Chair Jerome Powell to cut interest rates, citing several months of low inflation.
“Elevated oil prices risk stalling recent disinflation trends and complicates the Fed’s path to rate cuts,” Shah wrote.
Even if the strait remains open, if oil prices don’t fall, expect more Truths.
On record-breaking temperatures, oil prices, and Tesla Robotaxis
Current conditions: Wildfires are raging on the Greek island of Chios • Forecasters are monitoring a low-pressure system in the Atlantic that could become a tropical storm sometime today • Residents in eastern North Dakota are cleaning up after tornadoes ripped through the area over the weekend, killing at least three people.
A dangerous heat wave moves from the Midwest toward the East Coast this week, and is expected to challenge long-standing heat records. In many places, temperatures could hit 100 degrees Fahrenheit and feel even warmer when humidity is factored in. “High overnight temperatures will create a lack of overnight cooling, significantly increasing the danger,” according to the National Weather Service. Extreme heat warnings and advisories are in effect from Maine through the Carolinas, across the Ohio Valley and down into southern states like Mississippi and Louisiana. “It’s basically everywhere east of the Rockies,” National Weather Service meteorologist Mark Gehring told The Associated Press. “That is unusual, to have this massive area of high dew points and heat.”
AccuWeather
Regional grid operator PJM Interconnection, which covers 13 states, issued an energy emergency alert for today. The alert urges power transmission and generation owners to delay any planned maintenance so that no grid sources are out of commission as temperatures soar. A heat wave of this nature is rare this early in the summer. The last time temperatures hit 100 degrees in June in New York City, for example, was in 1995, according to AccuWeather. Heat waves are becoming more frequent and more intense as the climate warms. Here’s a look at how these events have changed over the past 60 years or so:
Oil markets are jittery this morning after Iran’s parliament endorsed a measure to block the Strait of Hormuz in response to U.S. strikes on Iranian nuclear facilities. About 20% of the world’s oil and liquified natural gas shipments travel through the shipping route, and as The Wall Street Journalexplains, the supplies “dictate prices paid by U.S. drivers and air travelers.” Oil prices rose to five-month highs this morning on the news. Tehran has long threatened to close the strait, but such a move is seen as unlikely because it would disrupt Iran’s own energy exports, which are its “sole global energy revenue stream,” one analyst told the Journal.
A handful of climate-related provisions in the GOP’s reconciliation bill are in limbo after the Senate parliamentarian advised that the policies violated the “Byrd Rule,” i.e. were deemed extraneous to budgetary matters, and thus were subject to a 60-vote threshold instead of the simple majority allowed for reconciliation. The provisions include:
The Senate Finance Committee is set to meet with the parliamentarian today.
In case you missed it: The Supreme Court on Friday gave the green light for fuel producers to challenge a Clean Air Act waiver issued by the EPA that lets California set tougher vehicle emissions standards than those at the federal level. A lower court rejected the lawsuit from Diamond Alternative Energy and other challengers last year, but as Justice Brett Kavanaugh wrote for the majority, California’s ambitious Zero-Emission Vehicle Program is hurting fuel producers, so they have standing to sue. The vote was 7 to 2, with Justices Sonia Sotomayor and Ketanji Brown Jackson dissenting.
As Heatmap’s Katie Brigham has explained, if the EPA waiver is eliminated, Tesla could take a big financial hit. That’s because the zero-emissions vehicle program lets automakers earn credits based on the number and type of ZEVs they produce, and since Tesla is a pure-play EV company, it has always generated more credits than it needs. “The sale of all regulatory credits combined earned the company a total of $595 million in the first quarter [of 2025] on a net income of just $409 million,” Brigham reported. “That is, they represented its entire margin of profitability. On the whole, credits represented 38% of Tesla’s net income last year.”
Tesla launched its Robotaxi service in Austin, Texas, over the weekend. A small number of rides were doled out to hand-picked influencers and retail investors, and a Tesla employee sat in the front passenger seat of each autonomous Model Y to monitor safety. The rollout was “uncharacteristically low-key,” Bloombergreported, but CEO Elon Musk said the company is being “super paranoid about safety.” San Francisco, Los Angeles, and San Antonio are rumored to be the next cities slated for Robotaxi service. “Tesla is still behind Waymo, by several years,” wrote Jameson Dow at Electrek. “But Waymo has also not been scaling particularly quickly, and certainly both are slower than a lot of techno-optimists would have liked. So we’ll have to see which tortoise wins this race.” The stakes are pretty high: Investment management firm ARK Invest projected that Robotaxis could bring in $951 billion for Tesla by 2029 and make up 90% of the company’s earnings.
A new report from energy think tank Ember concludes that in the world’s sunniest cities, it’s now possible (and economically viable) to get at least 90% of the way to constant solar electricity output for every hour of the day, 365 days a year.
A conversation with Mary King, a vice president handling venture strategy at Aligned Capital
Today’s conversation is with Mary King, a vice president handling venture strategy at Aligned Capital, which has invested in developers like Summit Ridge and Brightnight. I reached out to Mary as a part of the broader range of conversations I’ve had with industry professionals since it has become clear Republicans in Congress will be taking a chainsaw to the Inflation Reduction Act. I wanted to ask her about investment philosophies in this trying time and how the landscape for putting capital into renewable energy has shifted. But Mary’s quite open with her view: these technologies aren’t going anywhere.
The following conversation has been lightly edited and abridged for clarity.
How do you approach working in this field given all the macro uncertainties?
It’s a really fair question. One, macro uncertainties aside, when you look at the levelized cost of energy report Lazard releases it is clear that there are forms of clean energy that are by far the cheapest to deploy. There are all kinds of reasons to do decarbonizing projects that aren’t clean energy generation: storage, resiliency, energy efficiency – this is massively cost saving. Like, a lot of the methane industry [exists] because there’s value in not leaking methane. There’s all sorts of stuff you can do that you don’t need policy incentives for.
That said, the policy questions are unavoidable. You can’t really ignore them and I don’t want to say they don’t matter to the industry – they do. It’s just, my belief in this being an investable asset class and incredibly important from a humanity perspective is unwavering. That’s the perspective I’ve been taking. This maybe isn’t going to be the most fun market, investing in decarbonizing things, but the sense of purpose and the belief in the underlying drivers of the industry outweigh that.
With respect to clean energy development, and the investment class working in development, how have things changed since January and the introduction of these bills that would pare back the IRA?
Both investors and companies are worried. There’s a lot more political and policy engagement. We’re seeing a lot of firms and organizations getting involved. I think companies are really trying to find ways to structure around the incentives. Companies and developers, I think everybody is trying to – for lack of a better term – future-proof themselves against the worst eventuality.
One of the things I’ve been personally thinking about is that the way developers generally make money is, you have a financier that’s going to buy a project from them, and the financier is going to have a certain investment rate of return, or IRR. So ITC [investment tax credit] or no ITC, that IRR is going to be the same. And the developer captures the difference.
My guess – and I’m not incredibly confident yet – but I think the industry just focuses on being less ITC dependent. Finding the projects that are juicier regardless of the ITC.
The other thing is that as drafts come out for what we’re expecting to see, it’s gone from bad to terrible to a little bit better. We’ll see what else happens as we see other iterations.
How are you evaluating companies and projects differently today, compared to how you were maybe before it was clear the IRA would be targeted?
Let’s say that we’re looking at a project developer and they have a series of projects. Right now we’re thinking about a few things. First, what assets are these? It’s not all ITC and PTC. A lot of it is other credits. Going through and asking, how at risk are these credits? And then, once we know how at risk those credits are we apply it at a project level.
This also raises a question of whether you’re going to be able to find as many projects. Is there going to be as much demand if you’re not able to get to an IRR? Is the industry going to pay that?
What gives you optimism in this moment?
I’ll just look at the levelized cost of energy and looking at the unsubsidized tables say these are the projects that make sense and will still get built. Utility-scale solar? Really attractive. Some of these next-gen geothermal projects, I think those are going to be cost effective.
The other thing is that the cost of battery storage is just declining so rapidly and it’s continuing to decline. We are as a country expected to compare the current price of these technologies in perpetuity to the current price of oil and gas, which is challenging and where the technologies have not changed materially. So we’re not going to see the cost decline we’re going to see in renewables.