Conrad Slorer

Summary

CC technologies have failed to scale due to poor performance in industrial settings and high operating costs. New materials with proof at scale are emerging to finally realize the carbon economy. With subsidies, DAC and point-source capture become profitable at $100 and $30 per ton of CO₂. Now is the time to invest in atmospheric carbon utility companies, vertically integrated manufacturers of fuels, proteins, or materials, and geoengineering service providers.

Working Thesis: The most impactful early-stage venture investments will develop proprietary technologies and expand across capture, CO₂ conversion innovation, infrastructure, and carbon marketplace platforms. Startups developing novel materials and processes, particularly advanced MOFs, will hold the proprietary technology and early revenue essential for industry scalability.

Introduction

Carbon capture has been in the news for a while, but the bold claims made at conferences or in news articles have turned out to be false due to the current technology's poor capture rate and high costs. Early large-scale projects often underperformed. In the power sector nearly 90% of proposed carbon capture capacity since 2000 failed at implementation or was suspended (DOE). In practice, many first-generation projects captured only a fraction of the CO₂ they targeted, underscoring technical and economic hurdles. Key challenges included the high cost per ton of CO₂ removal, the enormous energy requirements for solvent regeneration or sorbent processing, and difficulties in manufacturing and scaling the needed equipment.

Traditional carbon capture methods, such as aqueous monoethanolamine (MEA) solvents, carry high regeneration energy costs, corrosive degradation, and large equipment footprints, driving costs prohibitively high. Materials showing laboratory promise, notably metal-organic frameworks (MOFs), encountered challenges including complex manufacturing processes and insufficient durability under real-world conditions. However, recent advancements demonstrate a turning point in both the performance and scalability of MOFs.

Key cost targets have emerged as potential inflection points: approximately $100 per ton for direct air capture (DAC), popularized by Carbon Engineering and adopted by the U.S. Department of Energy's Carbon Negative Shot initiative, and roughly $30 per ton for point-source capture set by the DOE's fossil energy program. At these cost points, current federal incentives far outweigh the cost of capture, and industry hopefully feels comfortable investing in carbon capture. Somewhere near those cost values, an inflection point will occur and CC will fundamentally shift from pilot plants to global deployment. As carbon capture technology scales, the businesses best positioned to dominate the carbon economy will become oligopolies.

Technical Progress

Carbon capture technologies have faced technical shortcomings in both the lab and field deployment. The most mature method – amine scrubbing of power plant flue gas – illustrates the issues. Aqueous monoethanolamine (MEA) solvents can capture CO₂, but they come with extremely high regeneration energy requirements and suffer from oxidative and thermal degradation, leading to corrosive byproducts and high operating costs. Early carbon capture plants often had efficiency losses of 20–30% of a power station's output just to run the capture process. Additionally, many promising capture materials from research (like certain metal–organic frameworks and solid sorbents) did not translate well to real flue gas due to poor stability in the presence of water or impurities, limited capacity, or prohibitively expensive synthesis. These issues kept costs per ton high (often hundreds of dollars) and made investors wary after high-profile project failures.

In the past five years, however, significant advances in chemistry and materials science have started to overcome these challenges. Researchers have developed new sorbent materials and processes that improve capture performance while driving down costs:

MOFS

In 2024, Zhu et al. reported a diamine-appended MOF with a cooperative chemisorption–physisorption mechanism concisely named pip₂–Mg₂(dobpdc) (pip₂ = 1-(2-aminoethyl)piperidine). Traditional amine-functionalized MOFs capture CO₂ by chemically binding one CO₂ per amine (forming ammonium carbamate chains), capping capacity at ~1:1. By contrast, the new material exhibits a two-step CO₂ uptake, reaching ~1.5 CO₂ molecules per diamine at saturation (High-Capacity, Cooperative CO2 Capture in a Diamine-Appended Metal–Organic Framework through a Combined Chemisorptive and Physisorptive Mechanism - PMC). At the molecular level, ⅔ of the amines first chemisorb CO₂ into ammonium carbamate chain structures. These chains then create adsorption pockets that physically trap additional CO₂ molecules. This tandem binding not only boosts capacity by ~50% but also retains the characteristic "step-shaped" adsorption isotherm of these MOFs, meaning CO₂ can be released with relatively small temperature or pressure swings. Higher capacity and easy regenerability directly improve efficiency – more CO₂ captured per cycle and less energy to release it – while the solid MOF structure can be regenerated hundreds of times with minimal degradation. Such advances address prior limits on capacity and stability, pointing towards sorbents that can capture more CO₂ with smaller equipment footprints.

Another significant MOF advancement involved ZnH-MFU-4l, capable of capturing CO₂ from industrial flue gases at high temperatures (300°C), overcoming traditional material limitations which required expensive cooling. Its zinc hydride active sites stably capture and release CO₂ through modest pressure adjustments, maintaining high performance over hundreds of cycles. This innovation significantly reduces overall system energy requirements and opens carbon capture applications in challenging sectors like cement and steel production. Both these papers draw the path towards cost-effective and stable carbon capture using metal organic frameworks.

We are also witnessing the necessary manufacturing innovation to scale MOFs commercially. BASF demonstrated large-scale production of MOFs, drastically reducing costs by using continuous production methods and optimized chemical precursors. Advanced fabrication methods, such as incorporating MOFs into hollow fiber membranes, enable practical deployment by combining MOFs' high CO₂ affinity with established polymer manufacturing techniques, ensuring mechanical stability and effective mass production.

Other Methods

Phase-Change Sorbents for Direct Air Capture: A 2022 study by Miura et al. introduced a novel liquid amine that forms a solid carbamic acid upon capturing CO₂ from air. In this system, a diamine (isophorone diamine, IPDA) reacts with low-concentration CO₂ (400 ppm in air) to create a solid precipitate of carbamic acid, achieving >99% CO₂ removal efficiency from ambient air in laboratory tests. The clever chemistry lies in the phase change: as CO₂ binds to the diamine, the reaction product separates as a solid, which drives the equilibrium toward near-complete CO₂ uptake (since the free CO₂ in solution is continuously depleted). The captured CO₂ can then be released by mild heating – the solid carbamic acid reverts to liquid amine and CO₂ gas at only about 60 °C (333 K). This low regeneration temperature is far below traditional amine solvents (which often require ~120 °C steam), indicating a dramatic cut in energy input.

Electrochemical CO₂ Capture (Electro-Swing): Another breakthrough has been the development of electrochemically driven CO₂ scrubbers. Voskian and Hatton (2019) demonstrated a faradaic electro-swing adsorption process using quinone-functionalized electrodes (MIT engineers develop a new way to remove carbon dioxide from air). In essence, the device acts like a rechargeable battery that absorbs CO₂ when charging and releases CO₂ when discharging, all at ambient temperature and pressure. The process operates at room temperature and normal pressure, offering potential for modular systems that can capture from dilute air or concentrated flue gas by simply cycling electricity. While still in development, electro-swing adsorption has shown high selectivity and could achieve energy efficiencies far better than conventional heat-driven amine systems, if engineered properly.

First Order Effects

Once $100/ton DAC and $30/ton point-source capture are proved at plant-scale, the industry will transform. At these price points, carbon capture transitions into commercial viability, supported by robust policy frameworks like the enhanced U.S. 45Q tax credit offering up to $180 per ton for DAC-stored CO₂ and $85 for point-source. Companies such as Occidental Petroleum (via Carbon Engineering) and startups like Climeworks and Heirloom (if their tech improves) will quickly expand DAC deployments, selling high-value removal credits to corporations committed to net-zero emissions.

Large incumbents such as ExxonMobil, Duke Energy, and Mitsubishi Heavy Industries will leverage their industrial scale and integration capabilities, rapidly retrofitting facilities with carbon capture systems. Startups such as Svante, with modular MOF filter units, and Carbon Clean, using advanced solvents, will scale quickly, offering capture-as-a-service business models attractive to industries facing regulatory pressure.

Second Order Effects and Future Business Landscape

With carbon capture at scale, the economy surrounding CO₂ management will explode. It is impossible to determine now if large fossil-fuel incumbents or new startups will dominate the carbon economy. Aramco could become a dominant "carbon major" by vertically integrating DAC technology ownership, large-scale CO₂ transport, and storage infrastructure into their existing infrastructure. Their ability to monetize carbon removal through sequestration and CO₂ utilization, including enhanced oil recovery or synthetic fuels production, positions them uniquely for multi-revenue streams.

Startups initially focused on carbon removal services could evolve into integrated providers, creating proprietary capture technologies that can be licensed or applied internally. If the current batch of startups can vastly improve their capture performance, companies like Climeworks or Svante may expand from capturing CO₂ to manufacturing carbon-derived products, generating higher value through integration into broader markets. Proprietary technologies providing significant performance or cost advantages would offer substantial competitive edges, enabling extensive licensing revenue or exclusive market positioning.

Additionally, industrial ecosystems revolving around CO₂ infrastructure will emerge, enabling multiple emitters to share capture, transport, and utilization infrastructure, significantly reducing overall costs. These hubs, exemplified by proposed regional clusters in Texas and the Midwest, create efficiencies in storage and utilization, encouraging startups and incumbents to co-locate and integrate processes, thereby fostering innovation ecosystems similar to tech hubs.

Future Companies

As the carbon capture industry scales dramatically upon reaching critical cost milestones ($100/ton for DAC and $30/ton for point-source), entirely new business landscapes will emerge, creating unprecedented opportunities for today's startups to evolve into large, vertically integrated corporations.

1. Atmospheric Carbon Utilities

In a future where capturing CO₂ from ambient air becomes cost-effective, atmospheric carbon utilities could emerge and establish government-backed oligopolies. These companies would manage vast networks of DAC installations globally, offering cities, industries, and governments guaranteed "carbon negativity." They would operate similarly to current water or electricity utilities, providing carbon management as a standardized service. These companies could grow into massive corporations controlling everything from renewable energy sources powering capture to underground storage facilities.

2. Carbon-to-Protein Production

Leveraging captured carbon to produce sustainable, scalable food supplies could transform global agriculture. Carbon-to-Protein companies would operate large-scale bioreactors converting captured CO₂ into edible proteins, nutrients, or livestock feed using engineered microbes or algae. By integrating capture, conversion, and distribution, such companies could become leaders in the trillion-dollar global food market by owning the capture level and expanding into food production.

3. Synthetic Fuel Giants

As carbon capture costs drop, producing synthetic fuels (e-fuels) from CO₂ and green hydrogen will become economically viable. Fully integrated synthetic fuel companies could emerge, capturing carbon, producing hydrogen via renewable electrolysis, synthesizing low-carbon fuels, and operating distribution networks. Such companies could disrupt traditional oil and gas giants by providing sustainable aviation fuel (SAF), marine fuel, and carbon-neutral gasoline at competitive prices.

4. Carbon-based Material Innovators

Companies dedicated to using captured carbon as a feedstock for novel materials could rise significantly. These vertically integrated corporations would capture carbon at scale and produce advanced materials such as carbon-negative building materials (like concrete or carbon fibers), specialized chemicals, or polymers. They could reshape manufacturing and construction, substantially impacting global industrial supply chains.

5. Geoengineering Service Providers

With inexpensive atmospheric CO₂ capture, specialized geoengineering firms may offer targeted climate stabilization services, managing atmospheric CO₂ concentrations locally or regionally. They would combine capture infrastructure, carbon storage solutions, and climate modeling expertise. This new sector could evolve to become essential service providers in climate management, insurance, and environmental risk mitigation industries.