Direct Air Capture Economics Remain Challenged

Climeworks' Mammoth DAC plant in Iceland — the largest operating direct air capture facility in the world — is still delivering "just a fraction of its nameplate capacity" due to technical difficulties with the modular air-contactor units. This is a meaningful disconfirmer for near-term DAC scale-up narratives: if the reference plant that US policymakers and developers pointed to as proof-of-concept is underperforming on throughput, it pushes out the learning-curve assumptions underpinning cost-reduction roadmaps. The IRA's $180/ton DAC credit can catalyze project announcements, but the Mammoth experience suggests that capacity factor risk — not just capex — is the binding constraint at this stage of the technology. Investors underwriting DAC project finance should be stress-testing utilization rates, not just installed capacity. Source