Why This Swiss Carbon Removal Company Is Opening a U.S. Headquarters in Texas

More carbon removal technology is coming to the U.S.

Zurich, Switzerland-based direct air capture startup Climeworks will open a U.S. headquarters this year in Austin. The company, which pulls carbon dioxide directly from the atmosphere and then stores it underground, also plans to triple its U.S.-based workforce of more than 30 by the end of the year. Founded in 2009, Climeworks also employs workers across the country. It announced two “satellite” workspaces in New York and California, but most employees will be located in Austin. The announcement comes as more international climate tech innovators flock to the U.S. to take advantage of historic funding and stimulus for climate tech.

“Government subsidies are important if we’re going to start scaling up an industry, so the fact that the U.S. government was putting this behind the industry is really a draw card to bring some of the best technology — both local technology and international technology — into America,” says Climeworks chief operating officer and U.S. general manager Douglas Chan.

Climeworks’s expanding U.S. footprint comes on the heels of an announcement this month that the startup inked a long-term carbon removal agreement with Swiss International Air Lines and the Lufthansa Group. The company’s existing U.S. clients include Microsoft, JPMorgan Chase, Boston Consulting Group, Shopify, and Stripe.

Climeworks is also poised to benefit from funding from the Department of Energy, which announced in August that it is pouring $1.2 billion into direct air capture facilities in Texas and Louisiana, as well as a host of other projects. The three direct air capture hubs in which Climeworks participates in Louisiana, California, and South Dakota were selected by the DOE as eligible for upwards of $600 million in funding, though that is still in negotiations, according to the company.

“Once we finish our Mammoth facility in Iceland, really, America is going to be the beginnings of us building our megaton hub,” Chan says.

Hundreds of billions of dollars have been poured into climate change mitigation technology since the passage of the Biden Administration’s historic Bipartisan Infrastructure Law and Inflation Reduction Act. Climeworks is far from the only international company expanding in the U.S. to take advantage of incentives and funding. The Japanese electronics company Panasonic, for example, estimated that the capacity of its plants in Nevada and Kansas could make it eligible for $2 billion in tax credits a year, the Wall Street Journal reported. A 2023 analysis from the Journal found that international companies — many from South Korea, Japan, and China — took part in projects that accounted for 60 percent of spending on U.S. clean energy projects up until that point, outpacing the percentage of projects with companies based exclusively in the U.S. Furthermore, the act could stimulate as much as $3 trillion in investment over 10 years.

Climeworks’s technology — direct air capture — uses fans to suck air through a filter that captures CO2 particles, which are then removed from the filter using steam. The CO2 is then injected into a certain type of rock that accelerates the mineralization process of carbon dioxide, effectively turning it to stone. Climeworks’s CO2 storage partner is Carbfix.

Carbon removal has been praised as an increasingly attractive solution to the looming threat of climate change. But it’s still early days for the technology, which costs an estimated $600 to $1,000 to remove a ton of CO2 from the atmosphere via direct air capture, according to the World Economic Forum.

Chan did not disclose how much it currently costs Climeworks to remove a single ton of carbon, but did say the company is working to drive down the cost.

“For us to be able to scale this technology, we need to get it to a point where the cost of capture and the cost of net CO2 removal does come down into the order of hundreds of dollars,” he says, adding that the company aims to get costs down between $400 and $700 per ton by the end of 2030.

Carbon removal has faced a backlash from critics who say that it distracts and draws away funding from efforts to reduce ongoing emissions. Chan said he believes both processes will be crucial as leaders around the world attempt to limit global warming to 1.5 degrees Celsius above pre-industrial levels.

“Once you’ve emitted [waste], it just accumulates. So even if you reduce, that doesn’t solve the fact that we’ve got heaps of trash up in the sky that we need to eventually remove if we want to be able to keep global warming below 1.5 degrees,” he said. “So to me, it’s not a license to continue to emit or pollute — it’s part of the solution that we need, where it’s both reductions and removals.”

Climeworks’s Hellisheidi, Iceland-based plant, which launched in 2021, currently captures 4,000 tons of CO2 annually. The company is preparing to officially launch another plant, also located in Hellisheidi, in May.