As we reflect on a year of momentum for the growing Direct Air Capture (DAC) industry, we at Carbon Engineering (CE) see 12 months that – in many ways – have created a foundation for the years to come. While there is still much work to be done, we would like to take a moment to celebrate four areas of progress.

1. A year for deployment progress

Since day one, our focus has been on deploying DAC at large scale and low cost. This year, alongside our partners, CE was able to achieve some major milestones:

• Construction has begun for the first large-scale commercial facility to utilize CE’s technology in the United States. Located in Ector County, Texas, the plant is being deployed by our U.S. partner, 1PointFive, and is expected to capture up to 500,000 tonnes of carbon dioxide per annum, with the capability to scale up to one million tonnes per annum (Mtpa). Once fully operational, it will be the largest in the world – expected to surpass existing DAC facilities by 100x.
• We began engineering for large-scale DAC facilities at a second site in the U.S., in Kleberg County, Texas. Once complete, CE will have produced the required materials to replicate megatonne-scale DAC trains within multi-megatonne facilities.
  • This site on 106,000 acres of land leased by 1PointFive could support up to 30 megatonne DAC plants with pore space estimated to accommodate up to 3 billion tonnes for standalone carbon sequestration.
• We introduced a new global deployment approach with 1PointFive, which leverages decades of infrastructure engineering and project expertise as a subsidiary of Occidental, an international energy company. This model standardizes the design of plants and helps deliver complete, operationally-ready commercial DAC facilities to projects with local partners.

CE believes cross-industry collaboration and global partnerships will be critical in enabling the widespread deployment of DAC at scale. We want to thank our partners who work with us every day to make this a reality.

2. A year for pioneering DAC innovation

From our headquarters in Squamish, British Columbia, CE’s team of industry experts have spent the past year innovating our approach to large-scale DAC. Here are a few highlights:

• The decision to proceed with construction for the first commercial facility in Texas follows:
  • Extensive testing and validation of our technology at the Carbon Engineering Innovation Centre (CEIC), which was built in 2021 and remains the world’s largest dedicated DAC research and development facility.
  • Successful completion, in cooperation with 1PointFive and Worley, of the Front-End Engineering and Design (FEED) for the first commercial plant.
• At the CEIC, our team continues to improve, test, and validate our technology. One of the notable improvements in 2022 was testing an improved capture material that could produce an approximately 20% percent improvement in capture efficiency.
• CE’s intellectual property team has been hard at work, growing CE’s patented technology portfolio. Notable updates in 2022 include six new utility patent filings, four new issued patents, and four new trademarks, covering innovations around improved air contactor componentry and evolution in regeneration and processing concepts.

CE’s DAC solutions are the cumulative efforts of over a decade of forward-thinking, 40+ credited inventors and a team of nearly 150 innovators. We’re incredibly proud of the team’s sustained push to improve CE’s technology and thank everyone for their hard work in 2022.

3. A year for policy action

Many would recognize 2022 as a record-setting year for climate policy, including those that support DAC and carbon removal. Here’s a few highlights from the past year:

• In the United States, the historic Inflation Reduction Act passed into law. Widely recognized as the most significant U.S. climate action to date, it will bring hundreds of billions in incentives to many forms of clean energy. The Act has enhanced 45Q so that DAC facilities in the U.S. can earn tax credits of up to $180 per tonne of CO₂ sequestered for the first 12-years of the plant life. This increase is game changing for our economics, and for DAC in the U.S. overall.
• In the European Union, the Carbon Removal Certification Framework (CRC-F) was released last month, outlining important quality criteria and governance procedures for certifying and verifying carbon removals. This is the first time a government body has worked towards defining and certifying carbon removals.
• In the United Kingdom, we continue to work with our U.K. partner, Storegga, to develop the U.K.’s first commercial facility to use CE’s technology, targeted for North East Scotland. In parallel, the UK government is continuing the development of business models for carbon dioxide removal, and how to integrate negative emissions into emission trading. These in-progress models aim to result in policies that make carbon removal facilities economically viable in the UK.
• In Canada, 2022 saw the release of a CCUS investment tax credit, whereby DAC (and point-source carbon capture) facilities that supply CO₂ to permanent sequestration will qualify for a fully refundable investment tax credit from the Canadian Government. Similar to 45Q, this will be instrumental for the economics of DAC and CCS projects in Canada.
• Last but not least, 2022 saw continued development in Voluntary markets and in trans-national policymaking, such as at COP27 in Egypt. Numerous actors in the Voluntary markets continue work on protocols, standards, and certification systems that aim to improve the integrity and transparency of how carbon removals are generated and sold. 2023 will build the foundations for international trade of removals under a new market mechanism and we look forward to progress at COP28.

A famous proverb tells us “if you want to go fast, go alone, if you want to go far, go together”. As 2022 winds down, we at CE would like to thank all those working tirelessly on this climate journey along with us. It takes a multitude of people working together on markets, policies, and technologies to make the kind of progress we’re seeing today.

4. A year for choosing a new flightpath forward

One of the major benefits of DAC is it can address any emission, from any place and any point in time. For difficult-to-decarbonize industries this means a feasible, affordable and scalable way to address residual emissions. This year, we witnessed the aviation industry take significant steps in evaluating ways to bring DAC into their net-zero plans. A few key moments include:

• 

  Daniel Friedmann, CEO, Carbon Engineering and Karine Guenan, VP ZEROe Ecosystem, Airbus on a walking tour at the Carbon Engineering Innovation Centre (CEIC)

  Aviation visionary – Airbus – signing an agreement to purchase 400,000 tonnes of carbon removal credits from CE’s U.S. partner, 1PointFive.

• Only months later, Airbus was joined by seven major airlines in signing agreements to explore a future supply of DAC-based carbon removal credits.
• Most recently, CE was fortunate to see Airbus and Air Canada invest millions into our DAC technology to advance this tool for decarbonizing aviation.

We applaud aviation leaders for leaning in and showcasing how hard-to-abate sectors can use DAC to pull CO₂ directly out of the atmosphere and help accelerate efforts to decarbonize. Learn more about making net-zero aviation possible in this recent report by the Mission Possible Partnership.

All in all, 2022 was a big year for leaning into partnerships and enabling our scalable solution to play a key role in addressing our climate challenges. In 2023 and beyond, we are eager to build on this momentum. Please reach out if you want to be part of the excitement in 2023! You can find ways to get involved and work with us on our website at carbonengineering.com/work-with-us.

This week, Carbon Engineering (CE) was thrilled to join the world in watching President Joe Biden sign the Inflation Reduction Act (IRA) into law.

With incentives that span various sectors of the clean energy industry, the United States has now created conditions for meaningful climate action that place Paris Agreement decarbonization goals within reach. For the first time in decades, many sectors across the United States will now find the business case for reducing or removing emissions more compelling than continuing with business as usual.

The IRA will bring $369 billion in incentives and tax credits to clean energy, and includes measures to support renewable electricity, electric vehicles, production of clean hydrogen, carbon capture and storage, energy efficiency, sustainable aviation fuel, and more. The bill is being widely recognized as the United States’ most significant climate action to date. According to several independent research firms, these new provisions are projected to cut annual emissions by roughly 40% by the end of this decade – that’s on track to more than double America’s current decarbonization pace¹.

CE is pleased to see the act include key enhancements to the federal 45Q tax credit that will support emerging industries – like Direct Air Capture (DAC) – in reaching for their full potential. At a glance, these include increased tax credit values for removing carbon dioxide directly from the air – $180 per tonne securely stored in geologic formations and $130 per tonne utilized in ways that result in net emissions reductions. The act also provides access to direct payment for the full value of the credit for the first several years of the project’s life – which will effectively help break down barriers to financing commercial-scale projects.

We are eager to work alongside our global deployment partner, 1PointFive – a subsidiary of Occidental’s Low Carbon Ventures business – to put the IRA into action. In the years ahead, our teams will work diligently to drive the rapid deployment of large-scale DAC facilities across the United States. We expect support from the IRA to further accelerate CE, 1PointFive, and partners in our mission to address emissions at climate-relevant scale while creating thousands of high-value jobs and bringing economic benefits and investment to American communities.

This historic moment illustrates how governments can lead the way in kickstarting clean industries and shaping a path forward to meet climate goals. Although the work to meet these goals will continue, the IRA has positioned the United States to play a leading role in global efforts to decarbonize.

—

^{1 How the Manchin Climate Bill Will Slash Carbon Emissions – The Atlantic}

As the global aviation industry works towards net zero, important developments, progress and commitments are happening at a rapid pace. It can be challenging to keep up with all the key news, so Carbon Engineering has compiled some of the most relevant information from this month.   

A variety of factors make aviation complicated to decarbonize, including the need for high energy density fuels, high demand growth, and the inherent long-haul nature of many flights. In spite of these challenges, the industry is quickly accelerating efforts to become more sustainable and reach critical net zero goals. As evidence of this progress, Carbon Engineering is already seeing commitments from the aviation industry to integrate our Direct Air Capture solutions into their sustainability portfolios. Our technology is key for two pathways to aviation decarbonization: permanent carbon dioxide removal and the production of sustainable aviation fuels. 

July has seen several key developments in the aviation industry’s path to net zero. These include: 

1. An expert report on how aviation can reach net zero emissions.
2. A significant announcement from aviation industry leaders on an intent to explore carbon removal solutions for aviation, following a large carbon removal purchase from Airbus in March. 
3. A report outlining the UK’s strategy for net zero aviation by 2050  
4. An important international aviation industry meeting on setting a goal for emissions reductions  
5. The first general assembly of the renewable and low carbon fuels alliance in the Europe Union

Read below for a summary of these developments – all powerful indicators of the progress the aviation industry is making towards a net zero future.  

1. New Expert Report Recognizes the Importance of Direct Air Capture in Aviation Decarbonization

A new report, Making Net-Zero Aviation Possible: An Industry-Backed, 1.5°C Aligned Transition Strategy, outlines scenarios for how the sector can reach net zero emissions by 2050. The report, released on July 14, is backed by more than 60 industry leaders, the Mission Possible Partnership, and the World Economic Forum-led Clean Skies for Tomorrow Coalition.  

This significant report provides a net zero roadmap to get the aviation industry on track to deliver on a 1.5°C target. It advocates for immediate action and sets specific and deadline-driven milestones to achieve this goal. As an industry-led report, the insight and direction comes directly from those driving the sector’s transition, adding further credibility and increasing the strategy’s potential for long-term success. Carbon Engineering is pleased to see the inclusion of Direct Air Capture in the report’s net zero scenarios – a signal of the growing consensus that carbon dioxide removal and Direct Air Capture are expected to play a key role in the decarbonization of aviation. Below are our main takeaways from the report: 

Direct Air Capture is highlighted as a key solution for decarbonizing aviation through both carbon dioxide removal and power-to-liquids sustainable aviation fuels.  

Direct Air Capture can support aviation decarbonization in two important ways. Firstly, carbon dioxide captured from the atmosphere through Direct Air Capture can be used to produce power-to-liquids sustainable aviation fuels. Power-to-liquids fuels are synthetically produced hydrocarbons, made using renewable electricity, water and carbon dioxide. When produced through Carbon Engineering’s AIR TO FUELS^TM process, these fuels are near carbon neutral and can work in existing planes without any modifications.

Secondly, atmospheric carbon dioxide captured from Direct Air Capture can be safely stored underground to deliver permanent and measurable carbon dioxide removal. Carbon removal activities complement emissions reductions solutions, like sustainable aviation fuel, by providing a tool to address any remaining emissions that cannot be directly eliminated. The report separately defines both carbon dioxide removal and power-to-liquids sustainable aviation fuel from carbon dioxide as necessary for net zero.  

Sustainable aviation fuel produced from atmospheric carbon dioxide through Direct Air Capture is expected to play a significant role in the future of aviation.  

The report highlights atmospheric carbon dioxide from Direct Air Capture as the long-term feedstock for power-to-liquids sustainable aviation fuel, citing 490 to 730 megatonnes per year needed as feedstock by 2050. This shows potential for substantial market demand from the aviation sector for sustainable aviation fuel produced using Carbon Engineering’s technologies.  

The scenarios in this report recognize carbon dioxide removal as necessary for aviation to reach net zero by 2050, and calls for removals and investment to begin now.  

Notably, the report highlights a minimum of 120-140 megatonnes per year of removals by 2050 to counterbalance residual aviation emissions. The report calls for removals as a necessary part of the pathway to reach net zero, and for investment to start immediately. This is well aligned with Carbon Engineering and 1PointFive’s global deployment approach, which supports 1PointFive’s scenario of 70 Direct Air Capture facilities online by 2035.  

Read the full report here.  

2. Airbus and Major Airlines Explore Carbon Removal Credits from Direct Air Capture Technology

Earlier this year, Carbon Engineering’s global deployment partner, 1PointFive, announced a significant sale of 400,000 tonnes of carbon removal credits to aerospace leader Airbus. Under the agreement, Airbus pre-purchased the capture and permanent sequestration of 100,000 tonnes of carbon dioxide from the atmosphere each year for four years, to be delivered from 1PointFive’s planned first Direct Air Capture facility using Carbon Engineering’s technology. 

Building on this news, on July 18 at the Farnborough Air Show, Airbus and a number of major airlines announced they have signed Letters of Intent to explore opportunities for a future supply of carbon removal credits from Direct Air Capture. The airlines – Air Canada, Air France-KLM, easyJet, International Airlines Group, LATAM Airlines Group, Lufthansa Group and Virgin Atlantic – have committed to engage in negotiations on the possible pre-purchase of verified and durable carbon removal credits starting in 2025 through to 2028. The carbon removal credits will be issued by 1PointFive.  

This announcement reinforces important elements from the Mission Possible Partnership report—carbon dioxide removals are essential to counterbalance residual emissions, and investment must start today. The commitment by Airbus and these airlines to explore carbon removal demonstrates these key, industry-led recommendations playing out through real-world action, from some of aviation’s leading organizations. This announcement is a great example of concrete steps the aviation sector is taking today on the pathway to reaching net zero.  

Read the full press release here.  

 3. The UK Releases a Strategy for Net Zero Aviation by 2050

On July 19 at the Farnborough Airshow, the UK’s Department of Transport released their Jet Zero Strategy – a framework and plan for delivering net zero aviation for the UK by 2050.  

The Jet Zero Strategy has some highly relevant contents related to Direct Air Capture and sustainable aviation fuel, including:  

• The UK sustainable aviation fuel (SAF) mandate will start in 2025, requiring the UK’s jet fuel mix to include at least 10% SAF by 2030.  
• The strategy states that a UK SAF industry could generate substantial economic benefits, with up to £2.7bn gross value added for the UK from UK production and global exports. By 2035, a domestic industry is expected to support 5,200 jobs.  
• The strategy also includes a £165m Advanced Fuels Fund to support first-of-a-kind commercial and demonstration plants. Funding will be available for three years and will build on the progress made in previous advanced fuels grant competitions, like Green Fuels Green Skies, which Carbon Engineering participated in. 

• Included in the Jet Zero Strategy is a case study on Carbon Engineering, our Direct Air Capture technology and AIR TO FUELS^TM process, and the role both can play in aviation decarbonization. The case study also cites Carbon Engineering and 1PointFive’s global deployment of Direct Air Capture, including engineering for a large-scale facility targeted for northeast Scotland.  

Carbon Engineering is honoured to have been named a member of the UK Jet Zero Council. As a member, we will lend our insight and expertise as leaders in Direct Air Capture to support the advancement of policies for UK aviation decarbonization.  

Read the full report here.  

Grant Shapps, UK Secretary of State for Transport, speaking on the Jet Zero Strategy at the Farnborough

Air Show. Shown at left on screen is a rendering of a large-scale facility using CE’s DAC technology.  

Robert Courts, UK Minister for Aviation & Maritime, foreground, and members of the Jet Zero Council at the

Farnborough Air Show, including CE’s VP Europe, Amy Ruddock. Credit: UK Department of Transport. 

 4. An Important United Nations Aviation Industry Meeting on Emissions Reductions

In Canada, Carbon Engineering was in attendance last week at a significant aviation industry meeting. The International Civil Aviation Organization (ICAO) held their high-level meeting on the feasibility of a long-term aspirational goal for international aviation carbon dioxide emissions reductions. The ICAO is an aviation-focused agency of the United Nations, funded and directed by 193 national governments and headquartered in Montreal.  

The meeting brought together decision makers and participants from member countries to discuss carbon dioxide emissions reduction scenarios. Attendees focused on options for an emissions reductions goal, implementation, recommendations, and how goal progress will be monitored. This is a key milestone in the run up to the ICAO triennial meetings this coming September, where ICAO is attempting to adopt their long-term aspirational goal for aviation for 2050. 

Alongside these meetings, ICAO hosted an exhibition, providing an opportunity for attending countries to showcase their innovations towards addressing aviation sector emissions. As a member of the Canadian Council for Sustainable Aviation (C-SAF), Carbon Engineering was pleased to be part of the exhibition highlighting how the Canadian ecosystem is responding to the challenge of aviation decarbonization. This was a great opportunity for Carbon Engineering to engage with delegates from around the world, and highlight our technology and the role it can play in helping a hard-to-abate sector decarbonize globally.  

Geoffrey Tauvette, Executive Director, C-SAF, left, The Honourable Steven Guilbeault,

Minister of Environment and Climate Change of Canada, centre, and Adam Baylin-Stern, Policy and

Engagement Lead, Carbon Engineering, right. Pictured at the ICAO high-level meeting in Montreal.

Credit: Office of the Minister of Environment and Climate Change. 

5. First General Assembly of the EU Renewable and Low Carbon Fuels Alliance

Carbon Engineering attended the first General Assembly of the European Union (EU) Renewable and Low-Carbon Fuels (RLCF) Value Chain Industrial Alliance July 12. The Alliance was launched in April 2021 by Transport Commissioner Adina Vălean, with the support of key industrial partners and trade associations. The intention is to boost supply and support demand of renewable and low-carbon fuels in Europe in line with the EU climate ambition by 2050. Both aviation and maritime sectors are in focus. 

 There are five objectives: 

1. Identify pathways
2. Assessment of enabling conditions, including needed policy measures 
3. Map available funding
4. Launch a business investment platform and determine a credible pipeline of projects
5. Build synergies across all transport modes and other alliances.

Carbon Engineering is pleased to be part of the RLCF alliance and looks forward to developing new partnerships to deliver near carbon-neutral fuels through Direct Air Capture for this important market. 

On December 15, 2021, the European Commission released a Communication on Sustainable Carbon Cycles that sets out the EU’s vision and action plan to reduce fossil carbon emissions and to augment this with increased removals of carbon from the atmosphere in order to restore sustainable carbon cycles. We agree with the EU Commission that, “In order to reach climate neutrality, greenhouse gas emissions will have to be reduced drastically and rapidly while carbon removals will have to be increased and further integrated into EU climate policies”.

The policy framework from the EU institutions will be vital to enabling investment in high-integrity, permanent carbon removal solutions, like Direct Air Capture into storage (DACS). It is great to see the starting ambition that five million tonnes of carbon removal should be delivered by technological solutions annually by 2030, in addition to the worthy goals of greatly increasing the carbon stored through agriculture and forestry. The Communication further estimates that the EU will need to remove more than 100 million tonnes of carbon dioxide (CO₂) from the atmosphere using Direct Air Capture (DAC) by 2050.

DACS is a solution that can deliver large-scale quantities of permanent, measurable and verifiable carbon dioxide removal, with low land and water use. We are pleased to see the EU recognise the important role it can play – alongside emissions reductions and carbon storage in agriculture and forestry – in achieving net zero, and look forward to working with partners to kick-start investment in the EU in both DACS and use of atmospheric carbon in near carbon neutral aviation fuels.

Carbon Engineering first captured CO₂ from the atmosphere in 2015 at our pilot plant in Squamish, British Columbia, Canada. The technology itself is ready for widespread deployment, and we are now partnering with plant developers to deploy large-scale, commercial DAC plants globally, including in Europe as recently announced in Norway. The first commercial facility to utilise our technology is being developed in the Permian Basin, US, by our partner 1PointFive. It is expected to extract one million tonnes of CO₂ from the atmosphere when complete, with a target operational date of 2024.

It takes time to scale proven technologies and we need to start this decade.  We see a place for permanent, high-integrity, technological carbon removal in voluntary and EU compliance markets by 2025 to address the most difficult to decarbonise sources of greenhouse gas emissions and help companies and governments meet their net-zero emission targets.

Carbon Engineering is often asked “what do you need to scale DAC?”  Below we share our preferred five policy measures and how they are reflected in the EU’s Communication on Restoring Sustainable Carbon Cycles.

Since June 2020, Carbon Engineering and our partners have been working hard to progress construction of our new Innovation Centre! We are pleased to share recent visuals below of the site’s significant growth since our February update.

Located on the waterfront in Squamish, British Columbia, this facility will be Carbon Engineering’s advanced development and operations headquarters. This is where we will optimize and improve our groundbreaking Direct Air Capture (DAC) technology that removes carbon dioxide from the atmosphere. Our growing team is already moving into the site, ready for it to start operations shortly.

“As we near completion of the Innovation Centre, Carbon Engineering is approaching a major milestone not only for our company and partners, but also for the future of Direct Air Capture technology,” said CEO Steve Oldham. “At this world-class facility, our talented and growing team will continue to advance our climate solutions. The innovation conducted here will help us further drive down costs, grow efficiencies and roll out next generation improvements to our plants around the world.”

The success of this ongoing project is in part due to the expertise of consulting engineering firm BBA, who were engaged by Carbon Engineering to assist with the engineering design of the Innovation Centre. Working alongside BBA and leveraging their vast experience with industrial engineering design was key in making Carbon Engineering’s Innovation Centre a reality.

Here is what has happened since our last update:

• The calciner was installed in late May, redefining the Innovation Centre skyline. The calciner is where CO₂-rich pellets produced in the pellet reactor are heated to 900°C to release the CO₂ in pure gas form, so it can be permanently stored or reused.
• The team has been working to commission utilities, complete piping, electrical and instrumentation installations, and test the plant’s automation systems.
• Our operations team underwent two weeks of intensive training as they transition from running the pilot DAC facility to the Innovation Centre.
• The CEIC administration building has been drywalled, and the finishing (visible in image below) is nearly complete. This 1250m² building will be used by Carbon Engineering’s advanced development and plant operations staff, and will include a reception, offices, meeting rooms, drop spaces, a laboratory, a first aid room, and a control room. It will also house a large shop space for plant support and maintenance activities.

Carbon Engineering’s Innovation Centre administration building. Taken on June 8, 2021. 

A bird’s eye view of Carbon Engineering’s Innovation Centre. Taken June 18, 2021.

A full site view with all of the major components of our Direct Air Capture installed. Carbon Engineering’s pilot DAC plant is partially visible at top right. Taken June 18, 2021. 

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