The report writes: "If the global temperature temporarily exceeds 1．5°C, carbon dioxide needs to be removed to reduce the concentration of carbon dioxide in the atmosphere, thus bringing the global temperature down." In other words, carbon capture technology is needed to achieve this goal. Headquartered in Switzerland, Climeworks is one of the few start-ups that provide carbon capture technology. It currently operates Orca, the world’s largest direct air capture plant in Iceland, which injects the captured carbon dioxide into the deep underground and stores it permanently, or converts it into fuel and materials. Orca started construction in September 2021. So far, the plant can capture about 4,000 tons per year, which is roughly equivalent to the annual emissions of 600 European residents.
CEO Christoph Gebald said that Climeworks will use this fund to build a 40,000-ton capture plant in the next three years. The goal is to capture more than 1 million tons of carbon dioxide every year by 2030, which is 250 times of the current Orca carbon capture, equivalent to the annual emissions of 150,000 European residents. When asked about the possible location of the next factory, he said, "Iceland is the most popular country because of its excellent geological conditions." But Norway, Oman and even North America are also possible choices.
Climeworks’s technology works by moving a large amount of air to a special chemical that can filter out carbon dioxide, similar to a magnet that attracts iron filler. Then the new compound is heated to high temperature, releasing pure carbon dioxide flow, which can be injected into the ground. The whole process is energy-intensive, and it is meaningful to the earth only if the main energy is carbon-free. Therefore, Climeworks also needs to choose a place where it can get cheap green energy. Gebald said that Climeworks is committed to using only renewable or sustainable energy.
Climeworks’ direct competitor is Canadian startup Carbon Engineering Ltd．, which has cooperated with oil company Occidental Petroleum Corp． to try to build a million-ton capture plant. This will require raising hundreds of millions of dollars for construction, and then raising tens of millions of dollars for operation every year. Carbon Engineering recently leased land in Louisiana, where favorable geological conditions enable it to bury carbon dioxide.
Global Thermostat, headquartered in the United States, is another direct air capture startup company, which was founded at the same time as Climeworks and Carbon Engineering about ten years ago. Global Thermostat has been struggling, and recently announced a management change, which ousted co-founder Graciela Chichilnisky from the position of CEO to overcome management problems. At the same time, Climeworks continues to grow. Gebald predicts that by the end of next year, the number of employees will increase from the existing 180 to 400.
In the past year, Climeworks has successively signed 10-year carbon capture purchase agreements with a number of international financial groups, including Swiss reinsurance company Swiss Re, Boston Consulting BCG, LGT, the world’s largest family private bank and asset management group, and Rothesay, a British pension insurance company. In addition, we recently signed a five-year cooperation agreement with Swarovski.
For this investment, Lee Qian, investment manager of Baillie Gifford, said, "Although there is no panacea to solve the problem of climate change, the direct air capture technology of Climeworks has the potential to play an important role in helping the world avoid its worst impact. There are many obstacles to overcome in the application of this technology, but the scale of the opportunity is huge. We are very impressed with the management team of Climeworks and are very happy to support them in the future development. "
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