Direct Air Capture Market

• Increasing emphasis on global net zero emission goals and increased public awareness about climate change are driving the market growth

Market CAGR for direct air capture is being driven by the increasing emphasis on global net zero emission goals and increased public awareness about climate change. The growing global environmental concerns, particularly the recognition that CO2 emissions account for nearly 76% of total greenhouse gas emissions worldwide, are driving the uptake of direct air capture (DAC) systems. According to the Global Monitoring Lab (GML) of the National Oceanic and Atmospheric Administration (NOAA), the global average atmospheric carbon dioxide concentration reached 417.06 parts per million ("ppm") in 2022, marking a significant increase of 2.13 ppm compared to the previous year.

Governments across the globe are implementing proactive measures to achieve net-zero emission targets. By November 2023, approximately 145 countries had either announced or were considering net-zero targets, encompassing nearly 90% of global emissions. More than 140 countries, including major polluters such as China, the United States, India, and the European Union, have committed to achieving net-zero emissions by 2050. The heightened emphasis on achieving net-zero emissions, which requires not only reducing emissions but also actively removing existing CO2, creates a favorable environment for the potential adoption and success of direct air capture (DAC) technologies.

In recent years, there has been a notable rise in public awareness regarding climate change and the pressing need for immediate action. Consequently, governments, businesses, and institutions are placing significant emphasis on prioritizing efforts to reduce carbon emissions. A recent survey by UNICEF, focusing on public knowledge, attitudes, and behaviors concerning climate change and the environment, revealed that a majority of citizens (73%) express concerns about climate change and its adverse effects on the well-being of future generations. With the heightened public concern regarding climate change, there is increasing support for policies and initiatives aimed at achieving net-zero emissions.

As a result, it is anticipated that throughout the projection period, demand for the direct air capture market will increase due to the increasing emphasis on global net zero emission goals and increased public awareness about climate change. Thus driving the direct air capture market revenue.

The increasing implementation of climate policies globally is a primary driver for the Global Direct Air Capture Market Industry. Governments are establishing stringent regulations aimed at reducing greenhouse gas emissions, which necessitates innovative solutions like direct air capture. For instance, the European Union's Green Deal aims to achieve carbon neutrality by 2050, creating a favorable environment for DAC technologies. As a result, the market is projected to reach 1.5 USD Billion in 2024, with significant investments directed towards developing and deploying DAC systems. This regulatory push is expected to enhance the adoption of DAC technologies across various sectors.

The Global Direct Air Capture Market Industry is poised for substantial growth, with projections indicating a market size of 1.5 USD Billion in 2024 and an anticipated increase to 12 USD Billion by 2035. This growth trajectory suggests a compound annual growth rate of 20.81% from 2025 to 2035, reflecting the increasing demand for carbon capture technologies. The market dynamics are influenced by various factors, including technological advancements, regulatory frameworks, and corporate sustainability initiatives. As the urgency to address climate change intensifies, the direct air capture sector is likely to play a pivotal role in global efforts to achieve carbon neutrality.

Technological advancements in direct air capture methods are propelling the Global Direct Air Capture Market Industry forward. Innovations in materials and processes, such as the development of more efficient sorbents and energy-efficient systems, are enhancing the feasibility of DAC solutions. For example, advancements in modular DAC systems allow for scalable deployment in diverse environments. These improvements not only reduce operational costs but also increase the overall effectiveness of carbon capture. As the industry evolves, it is anticipated that the market will grow significantly, potentially reaching 12 USD Billion by 2035, driven by these technological breakthroughs.

Public awareness regarding climate change and the need for carbon reduction technologies is driving the Global Direct Air Capture Market Industry. As communities become more informed about the impacts of climate change, there is a growing demand for effective solutions to mitigate its effects. This heightened awareness is fostering public support for policies and investments in DAC technologies. Initiatives aimed at educating the public about the benefits of direct air capture are gaining traction, leading to increased funding and research opportunities. Consequently, this trend is likely to bolster the market, encouraging further development and deployment of DAC systems.

The rising trend of corporate sustainability initiatives is influencing the Global Direct Air Capture Market Industry. Many corporations are committing to net-zero emissions targets, prompting investments in carbon capture technologies. Companies across various sectors, including energy, manufacturing, and transportation, are increasingly integrating DAC solutions into their sustainability strategies. This shift is evidenced by major firms pledging to offset their carbon footprints through direct air capture. As a result, the market is expected to experience a compound annual growth rate of 20.81% from 2025 to 2035, reflecting the growing recognition of DAC as a viable tool for achieving corporate sustainability goals.

Investment and funding opportunities are crucial drivers for the Global Direct Air Capture Market Industry. Governments and private investors are increasingly recognizing the potential of DAC technologies to combat climate change, leading to a surge in financial support. Various funding programs and grants are being established to promote research and development in this field. For instance, the U.S. Department of Energy has allocated significant resources to support DAC projects. This influx of capital is expected to accelerate the growth of the market, facilitating the development of innovative solutions and expanding the deployment of existing technologies.

By region, the study provides market insights into North America, Europe, Asia-Pacific, and Rest of the World. The anticipated expansion of the direct air capture market in North America can be attributed to several key factors. The region's leadership in the direct air capture market is influenced by several factors, including its well-established industrial infrastructure, advancements in technology, rigorous regulatory frameworks, and increasing demand for carbon capture solutions across various sectors.

According to the Government of Canada, the global momentum in the carbon management sector has surged in response to the climate crisis, with over 570 carbon capture, utilization, and storage (CCUS) projects currently in development. By 2030, it is projected that 368 projects will be operational, with a collective capacity to capture 743 million metric tons of CO2 annually. With the United States leading the way, North America boasts a diverse industrial landscape, housing numerous sectors that heavily rely on DAC technology.

Industries such as manufacturing, energy production, and transportation are key drivers of the demand for carbon capture solutions to mitigate greenhouse gas emissions and align with environmental regulations.

Further, the major countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Direct Air Capture Market Share, By Region 2023 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe's Direct Air Capture Market accounts for the second-largest market share. As European companies increasingly prioritize sustainability, they are integrating carbon capture technologies into their strategies to reduce their carbon footprint. In 2022, greenhouse gas emissions from EU economic activities total 3.6 billion tonnes of CO2 equivalents, marking a 22% reduction from 2008 levels. With the EU committed to cutting its greenhouse gas emissions by more than half by 2030, there's a rising demand for direct air capture (DAC) solutions among businesses aiming to offset their emissions and achieve their sustainability objectives.

Further, the German Direct Air Capture Market held the largest market share, and the UK Direct Air Capture Market was the fastest-growing market in the European region.

The Asia-Pacific Direct Air Capture Market is expected to grow at the fastest CAGR from 2024 to 2032. Many countries across the Asia Pacific region are implementing policies and regulations focused on curbing greenhouse gas emissions. China, notably the world's largest emitter of greenhouse gases, released 12.7 billion tonnes of CO2 equivalent in 2019, representing 26% of global emissions, significantly higher than the EU-27's 7% share.

With ambitious targets, China aims to reduce its carbon intensity by over 65% from 2005 levels by 2030, alongside plans to surpass 1,200 GW of installed wind and solar power capacity. In support of these goals, governments are incentivizing the adoption of direct air capture (DAC) technology through various means such as incentives, subsidies, or mandates. These proactive policy measures are fostering an enabling environment for the expansion of the DAC market. Moreover, China’s Direct Air Capture Market held the largest market share, and the Indian Direct Air Capture Market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development to expand their product lines, which will help the direct air capture market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the direct air capture industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global direct air capture industry to benefit clients and increase the market sector. In recent years, the direct air capture industry has offered some of the most significant advantages to global efforts in mitigating climate change.

Major players in the direct air capture market include Climeworks (Switzerland), Carbon Engineering ULC. (Canada), Global thermostat (US), Heirloom Carbon Technologies (US), Soletair Power (Finland), CarbonCapture Inc (US), Avnos, Inc. (US), Noya PBC (US), Skytree (Netherlands), RepAir (Israel) are attempting to increase market demand by investing in research and development operations.

Climeworks stands as a leading force in carbon dioxide removal (CDR) services through its pioneering direct air capture (DAC) technology, empowering businesses in their journey towards achieving net zero emissions and combating global warming. Established in 2009 by engineers Christoph Gebald and Jan Wurzbacher, Climeworks is committed to making a substantial climate impact while upholding integrity and prioritizing top-notch, permanent removal solutions. At the forefront of the DAC industry globally, Climeworks boasts the world's sole commercial DAC facility with integrated storage capabilities, scalable modular CO2 collectors, and operations powered entirely by clean energy sources.

Their expanding clientele includes over 160 organizations, among them notable multinationals like Microsoft, BCG, UBS, and JPMorgan. In 2022, Climeworks secured CHF 600 million in funding and earned recognition as one of TIME100's Most Influential Companies of the same year.

Carbon Engineering ULC, a provider of clean energy solutions, focuses on delivering affordable and reliable energy while reducing carbon emissions. Leveraging direct air capture technology, the company captures and stores carbon dioxide from the atmosphere or converts it into ultra-low carbon synthetic fuels. This enables businesses to effectively address their carbon footprint, achieve net-zero goals, and access clean, cost-effective energy systems. From 2015 to 2020, Carbon Engineering constructed a pilot plant for direct air capture and fuels, conducting tests, enhancing understanding, and progressing towards commercial-scale modules.

Carbon Engineering's global deployment partner, 1PointFive, has outlined plans to deploy 100 million tonnes of DAC capacity by 2035. At this rate, the scenario equates to a carbon capture capacity similar to the emissions from approximately 21.5 million standard cars or the carbon removal impact of roughly 4 billion trees.