Climeworks, a startup that directly captures carbon dioxide from the air, is partnering with Swiss Air Lines to remove tons of CO2 on behalf of the European airline in what appears to be the first deal of its kind.
The seven-year partnership between the two Zurich-based companies runs through the end of the decade, Jan Wurzbacher, Climeworks’ cofounder and co-CEO told Forbes. He and Swiss Air CEO Dieter Vranckx said it’s the airline industry’s first direct carbon capture project, though both declined to provide details on how many tons of CO2 will be removed under the deal and how much the airline is paying for the service. Some of the captured carbon may eventually be used to make sustainable aviation fuel, rather than stored.
“We’ve had many clients from the financial industry or service industry, but this is the first time it will be an airline customer,” Wurzbacher said. “It’s not like a steel mill, but it’s an airline — from a generally heavy emitting industry — that came to the conclusion that (carbon dioxide removal), in particular direct capture, can be something valuable.”
Climeworks, which has raised about $800 million and is valued at $1.9 billion, began operating Orca, the world’s first large-scale carbon capture plant in Iceland in 2021. The facility uses large fans to suck in CO2 from the ambient air and then mix it with water to create a solid material that’s piped and stored underground. It’s able to remove 4,000 tons of CO2 annually, but the company is building a much larger facility near Reykjavik, called Mammoth, that’s intended to remove 36,000 tons a year.
Prior to the Swiss deal, Climeworks announced multiyear carbon removal projects with JP Morgan Chase, Microsoft, BCG, Stripe and insurer Swiss Re.
Direct removal of CO2 is a fast-emerging area of cleantech, promoted as a critical complement to efforts to wean the transportation, manufacturing and power industries off of fossil fuels. But to slow the effects of climate change, thousands of gigatons of CO2 will need to be eliminated annually.
Unlike carbon offsets, credits that airlines and other companies have purchased for many years linked to things like planting trees or building wind farms, direct carbon removal companies say they’re able to measure exactly how much CO2 they’re capturing.
Carbon Reduction Targets
“Swiss International Air Lines has set a target to reduce its CO2 by half by 2030, and to be net zero by 2050,” CEO Vranckx told Forbes. Along with upgrading its fleet to cleaner aircraft and shifting to sustainable fuels, the Climeworks project “is another component of reaching those targets.”
One reason Swiss isn’t sharing a hard target for tons of CO2 that Climeworks will remove on its behalf is that direct air capture, or DAC, is still a new technology and may not be the cheapest option. “It could be in the next couple of years, if DAC really becomes extremely promising and the scalability is much more than we expect, then we will drive more reduction through direct air capture and maybe less through” sustainable aviation fuel, Vranckx said.
Airlines accounted for 12% of global CO2 emissions from the transportation industry in 2022, according to the International Energy Agency. Swiss’s goal of achieving net zero emissions by 2050 is shared by the industry.
Currently, it’s estimated to cost as much as $1,000 and use 2000 kilowatt-hours of power for every ton of CO2 removed. In its focus on scaling up total capacity to eliminate CO2, Climeworks hasn’t prioritized doing so using as little energy as possible, or doing so as cheaply as it can, though both will improve over time, said Wurzbacher.
“Our strategy will be to invest heavily into further technology improvement, and in particular scale-up and cost reduction,” he said. “We need to scale first. We can’t drop prices immediately, to where we anticipate them to be when we have scaled. So that is rather a challenge.”
Climeworks will have more competition in the direct carbon removal market as some energy companies and rival startups jump into the space. Equatic, a Los Angeles-based company spun out of UCLA, is working to commercialize ocean-based CO2 removal, a process it thinks can be much cheaper and energy efficient — costing as little as $100 per ton. Still, that technology is at a somewhat earlier stage.
“I don’t think that there will be one technology solely solving this problem,” Wurzbacher said. “And 20 years from now there will be several.”
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