Climeworks: Carbon Dioxide Removal through Direct Air Capture

With heightened sensitivity to the climate crisis, organizations around the world are pursuing diverse initiatives to mitigate global warming. Climeworks is a pioneer in employing direct air capture (DAC) technology to remove carbon dioxide (CO2) from the atmosphere and store the carbon underground. The company has set an ambitious goal of removing 1 gigaton of CO2 per year by 2050. However, given the nascency of the technology, the carbon markets and the policy landscape, it is too early to tell if that is reachable. What should Climeworks do to achieve the greatest environmental impact?

This case is designed to facilitate discussion related to climate action, applying a strategic or entrepreneurial lens to the pursuit of sustainable climate solutions. It highlights the challenges of building viable business models and ventures that deliver significant environmental impact. In examining Climeworks’ direct air capture and storage (DAC+S) approach for carbon dioxide removal from the atmosphere, students come to appreciate the need to integrate science, business, and policy perspectives to optimize its environmental impact. The case is a rich source of material for debating the nuances of climate finance and the carbon markets, including the key distinction between funding projects that pursue emissions avoidance/reduction versus those that pursue carbon dioxide removal from the air. Discussion should shed light on the potential for – and limits of – relying on carbon offsets, as well as the need to consider additionality and permanence in evaluating any climate solution. Ultimately, students should realize that nature-based solutions and technological solutions are substitutes, not complements, hence strategies to remove carbon dioxide should not crowd out urgently needed efforts to reduce emissions.