Climeworks targets a million tons of carbon removal in Canada
The Swiss company’s Canadian expansion comes as a proposed carbon tax credit heads to Parliament.
Photo credit: Climeworks
Photo credit: Climeworks
Swiss carbon removal unicorn Climeworks is planning to bring 1 million tons of direct air capture capacity to Canada.
Through a partnership with the DAC developer Deep Sky, Climeworks hopes to get its first Canadian DAC plus storage plant up and running by 2030, the company said Tuesday.
As part of a non-exclusive memorandum of understanding, Deep Sky will leverage its on-site location to identify stakeholders in both the public and private sectors, and help Climeworks navigate the Canadian policy environment.
The announcement comes just days after Deep Sky unveiled a $75-million fundraising round to develop both a DAC research facility and, eventually, a new commercial plant. Deep Sky said it will purchase reactors ready-made from a variety of industry players for the research center, then evaluate them and select the most efficient solutions for the future commercial plant. The partnership with Climeworks — which uses chemical absorption for its facilities — isn’t connected to that research facility.
Canada isn’t Climeworks’ only expansion beyond Iceland; for instance, in September the company announced it is exploring the development of DAC and storage projects in Kenya. But Canada’s hydro and wind power resources make it a strategic location for expansion, the company said.
A 2023 analysis by Carbon Removal Canada estimated that scaling the country’s CDR industry to meet the need for 312 megatons of removal by 2050 could create more than 300,000 jobs and generate $143 billion in GDP.
In addition to its clean energy resources and expansive geography, Canada also has immense potential for storage, at up to 678 gigatons of carbon dioxide, the analysis found.
DAC, of course, remains extremely costly, and the CDR market in Canada remains relatively small compared to that of the United States or the European Union, with few corporate buyers outside of Frontier founder Shopify.
And Canada’s regulatory framework has also moved more slowly. Federal support via an investment tax credit for carbon capture, utilization, and storage projects (a category that includes CDR) was first proposed last year, and Reuters reported that it is expected to reach Parliament this week after a long delay.
But to catch up to the market-propelling potential of the U.S. 45Q tax credit, Carbon Removal Canada said the country would need an additional production credit worth $55 per ton of carbon removal. The organization is also calling for direct government procurement, the streamlining of Canada’s siting and permitting process, and the creation of CDR “hubs” like those endorsed by the Biden administration.
