Overview of Climeworks

Climeworks is a Switzerland-based company that does Direct Air Capture (DAC) and either sequesters collected CO2 underground or sells it for commercial purposes including to a Swiss greenhouse and to a bottler for Coca-Cola Switzerland. Climeworks has a policy against working with fossil fuel production companies, which are a common partner for DAC companies as certain types of fossil fuel extraction can be made more efficient and productive by injecting CO2 underground in a process called Enhanced Oil Recovery (EOR). The climate impact of these projects is debated, which is why Climeworks’ focus on other types of projects is compelling.

The company uses technology it created to collect CO2 from the surrounding air. This happens through a two-step process of drawing air into a “collector” using large fans and then using filters to capture CO2. After the CO2 is in the filters, the company heats the filter which releases the CO2 and enables capture. The company has two operational facilities, one in Switzerland that uses the CO2 for commercial purposes and one in Iceland that uses the CO2 for carbon dioxide removal (CDR) credits:

Commercial purposes - Climeworks’ facility in Switzerland captures CO2 and provides it to commercial partners for use in their businesses. They have partnered with a Swiss greenhouse that purchases their captured CO2 for use in agricultural practices. They also sell CO2 to a Swiss Coca-Cola bottler, where it is used to create the bubbles in soft drinks. They hope to expand their commercial work to more companies that want eco-friendly ways of obtaining CO2.

CDR Credits - Climeworks also sells CDR credits on the voluntary market through their facility in Iceland. After capturing CO2, Climeworks injects the CO2 deep underground into geological formations where the CO2 reacts with the minerals around it and forms solid materials. This is considered the safest way to store CO2 as it is extremely unlikely to leak back into the atmosphere. When someone purchases a carbon credit from Climeworks, the company puts that money into the operational costs associated with running their DAC project. The Climeworks team claims that the CDR credits that they sell go directly to removing additional tons of CO2 removed from the atmosphere, as all of the money they receive goes into operational and modular expansion costs (more on this below).

Table showing Giving Green's assessment of Climeworks. Mechanism: Removal (green). Causality: High (green). Project-level Additionality: High (green). Marginal Additionality: High (green). Co-benefits: Low (red). Cost-effectiveness: Low (red).

This report was last updated in October 2021.

Theory of Change

The sale of carbon credits serves multiple goals for Climeworks. Primarily, the funds feed the immediate operational costs that keep the DAC plants operating, leading to more captured and sequestered CO2. The long-term implications work through two strategies: (1) signaling market potential to investors and (2) loan repayment, both of which contribute to the long-term success and future cost-effectiveness of Climeworks. These processes are outlined in the following theory of change diagram:

Theory of change diagram for Climeworks. The leftmost box: "Actions". The first step: "Purchase of offsets generates revenues for Climeworks". This leads to three actions: Pay operational costs, Signal DACS market to investors, Repay loans. These lead to four more actions: Continued operation, R&D, Build new plants, and increase size of plants. The 4th set of actions is transferring CO2 to storage partners and decrease in the long-term cost of DAC. The fifth column, final goals, includes CO2 captured and sequestered, and expectation of additional CO2 captured and sequestered.


Purchasing carbon credits from Climeworks funds carbon removal, as the money is directed towards their sequestration plant and not their production of commodity CO2 for commercial uses.


We assess the following elements to determine causality of a DAC project:

  • Successful removal of carbon from the atmosphere

  • Successful sequestration

  • Minimal leakage of CO2

  • Minimal carbon intensity of energy required

  • Byproducts of sequestration

Successful carbon capture

Climeworks is still undergoing the process of carbon offset verification with two independent agencies, after which we will have better data on their claims. This would give an added layer of certainty, since it would require verification of Climeworks’ activities by a third party. All indications that we have received at this time, including having spoken with experts about their work, lead us to believe that they successfully capture carbon.

Successful sequestration

Climeworks does a good job of tracking and making available information on their carbon sequestration process. They inject CO2 underground in areas where the CO2 will react with the underlying rock and form solid material (carbonates). They have filmed this process to confirm its validity. We trust that they are successfully sequestering the CO2 that they capture.

Minimal leakage of CO2

Because Climeworks’ sequestered carbon forms solid carbonates, we view the likelihood of leakage of CO2 with Climeworks as very low.

Minimal carbon intensity of energy required

DACS is an energy intensive process. Climeworks has built their system on top of a geothermal power plant which provides renewable energy, meaning that the carbon footprint of their operations is relatively low. We are sufficiently convinced that their carbon footprint is far outstripped by the CO2 they capture and sequester.

Overall, we think the causality of Climeworks’ projects is very clear, and rate it as ‘High’.


Climeworks’ projects require a significant upfront capital investment and ongoing operational costs. The funds from CDR credits cover the operating costs of capturing CO2 at the Iceland facility, which is where Climeworks captures CO2 and sequesters it underground.

The following graphic explains how the Climeworks team described the importance of carbon credits to Giving Green:

  • Purchasing CDR credits from Climeworks leads to more revenue for Climeworks as shown by the GREEN boxes.

  • As shown in the BLUE boxes, the Climeworks team claims to use CDR credits to cover operational expenses related to DACS and to pay back the loans they took to build the DACS facilities, not to cover expenses or loans related to their commercial sales business. Selling CDR credits on the market also provides a signal to investors of the market potential of this technology.

  • This signal of market potential will hopefully attract additional private investors to Climeworks. Additional investment is used for R&D and new projects, which are represented by the ORANGE boxes.

Project-level additionality

Because the entire Climeworks DACS project relies on a demand for carbon removal (which is primarily found in the offset market), we believe Climeworks has a clear case for project-level additionality. Although much of their current capital costs are covered by investors, these investments exist because of expectations of future revenue streams. Thus we rate their project-level additionality as ‘High’.

Marginal additionality

Climeworks’ operational costs are extremely high due to the novel nature of their technology. CDR credits go towards these operational costs and, according to the company, directly enable more CO2 to be captured and injected underground by “keeping the lights on.” Therefore, a steady stream of offset income keeps the project functioning.

Beyond the immediate CO2 removed at the Iceland facility, purchasing CDR credits provides ancillary benefits to Climeworks and its climate impact:

  • CDR credits signal to investors that there is a market for DACS technology, which means that private investors are likely to push money into developing better DACS technology and expanding the company’s projects. We believe that this will have downstream effects on the amount of CO2 that can be captured and stored in the long run.

  • Climeworks has built their technology to be modular, meaning that they can add small additional units that increase their capacity for DAC. While we do not believe that CDR credits are currently being used to expand the number of facilities, as the company is not yet profitable and they are still using CDR credits to cover operational costs, it is possible that CDR credits will be used for this purpose if enough are purchased.

Therefore, we believe that every offset purchase contributes to additional carbon removal in the future. As such, we are confident that Climeworks’ CDR credits are highly additional. We address two main concerns below.

Commercial business: While Climeworks states that income from credits supports their carbon sequestration activity, there’s always the possibility that it also supports their commercial side, since money is fungible. We are comfortable with this possibility because we also suspect that the commercial side of Climework’s business is carbon negative relative to the next best alternative, meaning that any benefits from buying CDR credits to the overall business (e.g. expanded investment) will also have climate impact by reducing the climate footprint of the companies that partner with Climeworks. For instance, Climeworks partnered with a bottler for Coca-Cola to provide CO2. If they had not provided the CO2, then that bottler would have gotten it from another source, either produced for that purpose or captured from industrial processes. While we have not focused on this part of their business in this investigation, we expect Climeworks CO2 to be more carbon negative than the average alternative CO2 that their partners would purchase.

Profits: Climeworks is a for-profit company, which means that income from credits may eventually go to profits as opposed to removing CO2. We are not yet worried about this issue with Climeworks for two reasons: (1) they are not currently profitable; (2) they require a significant upfront capital investment to build their facilities. This investment is unlikely to happen without a profit motive for investors, meaning that a for-profit structure is likely one of the only ways that this technology and these projects could exist. While we are currently satisfied with the information we have received from Climeworks, we hope that in the future they will share their financials publicly so that CDR purchasers can be sure the their funds are used for CO2 removal.

We rate Climeworks’ marginal additionality as ‘High’. We believe that each CDR credit purchased from Climeworks will meaningfully contribute to removing CO2 from the atmosphere.


We view Climeworks’ DACS process as highly permanent. As discussed above, their CO2 forms a solid material when sequestered. They have tracked this process carefully and we are confident that the process works as they outlined. By converting the CO2 into a solid material, it avoids potential problems of the CO2 leaking back into the atmosphere.


There are no co-benefits from Climeworks’ CDR credits.


When considering the price per ton of CO2 removed directly, Climeworks is not among the most cost-effective option currently on the offset market: it currently costs around $1100 for a retail purchaser to remove a ton of CO2 with Climeworks. However, we believe that this “simple” cost-effectiveness estimate is misleading, and the true value of purchasing a removal credit from Climeworks comes through supporting the market for and development of carbon removal technology.

In the appendix, we detail our efforts to model these benefits. Modeling the future of Climeworks’ removals requires difficult assumptions, with key ones being how a credit purchase affects the growth rate, how price decreases trigger increases in demand, and how one values the future. Projecting 30 years out to the future, we come to a rough estimate that purchasing credits now actually contributes to 44 times the current carbon removal, or a cost of $25 per ton. This number is sensitive to many assumptions (detailed in the appendix). Our model should not be taken literally as a prediction of Climeworks’ growth or costs, and we have not compared our model to Climeworks’ own projections of their growth. However, we do believe the general premise of the model: by purchasing credits from Climeworks now, one is making an important contribution to the development of DAC technology, which will drive down costs and therefore increase carbon removal in the future.


We recommend purchasing CDR credits from Climeworks for the following reasons:

  1. We are very sure that their project is permanently removing CO2 from the atmosphere

  2. We believe that each dollar invested in their work will additionally remove carbon

  3. We are convinced that investments in their work right now are entirely being used to remove carbon as opposed to simply maximizing profit

  4. We see long-term potential in their DACS technology

  5. Credits purchased now contribute to potentially drastic long-term cost reductions for Climeworks

The main drawback of Climeworks is that it is currently very expensive (around $1000/ton) to remove carbon relative to other options. This may be justified by the fact that supporting Climeworks will hopefully reduce the cost of their frontier carbon-removal technology, as we aim to illustrate in our long-term projections. You can purchase CDR credits from Climeworks on their website.

We thank Dr. Jan Wurzbacher, co-founder of Climeworks, and several other experts for a series of conversations that informed this document.


Select Resources

“Background Information about Geologic Sequestration.” EPA, Environmental Protection Agency, 6 Sept. 2016,

“The Concept of Geologic Carbon Sequestration.” USGS , Mar. 2011,

Brennan, S.T., Burruss, R.C., Merrill, M.D., Freeman, P.A., and Ruppert, L.F., 2010, A probabilistic assessment methodology for the evaluation of geologic carbon dioxide storage: U.S. Geological Survey Open-File Report 2010–1127

Sundquist, Eric, Burruss, Robert, Faulkner, Stephen, Gleason, Robert, Harden, Jennifer, Kharaka, Yousif, Tieszen, Larry, and Waldrop, Mark, 2008, Carbon sequestration to mitigate climate change: U.S. Geological Survey Fact Sheet 2008– 3097

“What’s the Difference between Geologic and Biologic Carbon Sequestration?” What's the Difference between Geologic and Biologic Carbon Sequestration?, 2020,

Douglas W. Duncan and Eric A. Morrissey. “The Concept of Geologic Carbon Sequestration, Fact Sheet 2010-3122.” USGS Publications Warehouse, 2010,

“CCS Explained.” UKCCSRC, 13 Dec. 2019,

Roberts, David. “Pulling CO2 out of the Air and Using It Could Be a Trillion-Dollar Business.” Vox, Vox, 4 Sept. 2019,

“Geologic Sequestration in Deep Saline Aquifers.” Geologic Sequestration in Deep Saline Aquifers | EARTH 104: Earth and the Environment (Development), 2020,

“Sequestration Map MIT.” Google Maps JavaScript,

Elliott, Rebecca. “Carbon Capture Wins Fans Among Oil Giants.” The Wall Street Journal, Dow Jones & Company, 12 Feb. 2020,,natural%20gas%20or%20making%20cement.

Kintisch, Eli. “Can Sucking CO2 Out of the Atmosphere Really Work?” MIT Technology Review, MIT Technology Review, 2 Apr. 2020,

Peters, Adele. “We Have the Tech to Suck CO2 from the Air–but Can It Suck Enough to Make a Difference?” Fast Company, Fast Company, 17 June 2019,

McQueen, N., Kolosz, B., and McCormick, C. “Analysis and Quantification of Negative Emissions” CDR Primer (2021), edited by J Wilcox, B Kolosz, J Freeman

Lackner, K. S., & Azarabadi, H. (2021). Buying down the Cost of Direct Air Capture. Industrial & Engineering Chemistry Research, 60(22), 8196–8208.

Appendix: Modeling Long-term Costs

Purchasing a ton of removal from Climeworks, or from any early-stage technology offering permanent removal, is quite expensive on face. We believe that much of the value of this purchase lies in its ability to catalyze further improvements in the technology, making future removal cheaper and driving adoption; the value of a purchase now is thus not only in the ton of carbon removed today, but in the tons removed in the future because of the firm’s increased ability to scale, bring down prices, and attract further buyers.

To illustrate this effect, we created a simple cost-effectiveness model. We do not believe this is an accurate projection of Climeworks’ future removal capacity, revenue, or any other parameter mentioned here. Our goal is not to predict Climeworks’ growth over time. It is to show the relative difference in potential growth caused by offset purchases, and to illustrate the mechanism by which the purchase of a carbon credit has an impact beyond the ton of carbon immediately removed. We have low confidence in the model and have published it here; we encourage others to question, critique, and build on our assumptions.

Our model has four main components:

  1. Baseline + Growth: Climeworks will become more efficient and grow its operations year over year by a moderate amount, even if it attracted no new sources of revenue; this means that for a fixed yearly “baseline removal budget”, more carbon is removed, and prices decrease. We assume that purchasing offsets increases the growth rate, an assumption which we detail in the following section.

  2. Demand: We assume that as prices decrease in one year, more consumers will purchase carbon removal the next year, and refer to this “demand generated above baseline” as an additional stream of revenue and removals.

  3. Credits: We model credits as a fixed amount of money spent per year at whatever price was set in the prior year. Credits also increase the growth rate applied to the growth amount.

  4. Total removal & costs: Based on #1-3, we calculate the total removal. We then calculate the cost per credit using the “baseline removal budget”, the additional demand, and the credits.

We evaluate three scenarios:

  1. No offsets: A scenario in which credits is 0, and carbon removal is the sum of growth and demand.

  2. Offset in year 1: A set dollar amount of offsets is purchased in Year 1, meaning that growth rate is higher in Year 1 as well. In Year 2 and beyond, growth rate returns to baseline, and no additional credits are purchased.

  3. Offset every year: A set dollar amount of offsets is purchased in every year, meaning growth rate is elevated every year.

Graphical representation of Scenario 1 in this model.

Scenario 1: No offsets

Graphical representation of Scenario 2 in this model.

Scenario 2: Offset in Year 1

Graphical representation of Scenario 3 in this model.

Scenario 3: Offset every year

Baseline + Growth:

We concentrate our modeling efforts on how purchasing carbon credits from Climeworks lead to advancements in DAC technology and the ability to scale, and how this “learning” will contribute to falling costs in the future. We are inspired by, but not strictly following, the idea of a technology learning rate; that is, that one can empirically observe the rate at which the unit cost of a technology falls as its cumulative output doubles. The learning rate does not attempt to describe the mechanism by which this happens.

We choose to model costs falling over time, rather than over cumulative output. For our purposes, we can imagine that every year, the cost of direct air capture falls due to the firm learning how to maximize efficiency in the process of operating the removal service; offsets increase the firm’s capacity to remove carbon, thereby increasing the amount of learning that happens in a given year.

Climeworks claims to be capable of removing 4000 tons of CO2 per year at their newest Iceland facility and they sell credits at about $1100 USD per ton of carbon removed. We use this as the baseline ‘year 0’. While corporate bulk buyers can purchase credits for less, and Climeworks’ true operating cost is closer to $500-600/tCO2, we use the assumption of $1100/tCO2 because this is closer to the price available to a retail consumer, and therefore determines the cost-effectiveness of the retail consumer’s contribution.

The model addresses how costs change over time as the DAC process becomes more efficient. Applying the modeling concepts laid out in The Carbon Dioxide Removal Primer to the idea of growth over time, we assume that growth is directly a function of the amount of CO2 removed in the previous year. Therefore, purchasing offsets increases growth, and makes all future DAC more efficient. The primer gives the range of reasonable learning rates to be between 5% and 30%, which we apply to our growth rate. We use a linear model to quantify the relationship between CO2 removed and growth:


where GR is the growth rate expressed as a proportion, 0 is the minimum amount of learning that occurs even in the absence of offsets, X represents offset dollars (in millions), and 1 is the change in the learning rate for $1M in offsets. The growth rate is set to 30% if the value estimated from the linear model is more than 0.30. When implementing this model, we fixed 0=0.05 to correspond to the minimum 5% learning threshold, and 1=0.01, a very rough estimate based on the order of magnitude of Climeworks’ current funding. Figure 1 shows how the estimated learning rate changes as a function of varying X.

We also assume that the price of removal cannot fall below $30/ton; this is the “residual cost” used in a recent analysis of Climeworks.

Applying this model on an annual basis, we project the amount of carbon removed each year.


We assume a simple linear relationship between demand in a given year (expressed as dollars spent on Climeworks’ carbon removal service; in reality, one can imagine this being a combination of carbon credits and commodity carbon dioxide purchases) and price in the prior year. We assume two parameters, m and b, and introduce a relationship between the two such that the line will always intersect the point representing the initial assumed price and 0 additional demand: in our assumptions, $1100/ton.


We attempt to assess the cost-effectiveness of the money spent in the “credits” category. We assume a fixed dollar amount of credits is purchased in any year that credits are applied (i.e. dollar amount does not go up and down with price). As price goes down, tons of CO2 removed via credits goes up.

Scenario analysis:

We evaluate under three scenarios: (1) no offsets enter the system, and minimal growth occurs, (2) $5M in offsets sold in year 1 only, and (3) $5M in offsets are generated each year.

Each of these scenarios are projected out 30 years and compared at years 10, 20, and 30. The primary endpoint (Table 1) is to estimate the cost for each additional ton of CO2 removed, including both the direct effect of the current offset as well as increased growth and therefore additional removal in the future. We compare scenarios 2 and 3 against scenario 1: that is, we total the carbon removed and the money spent (in both the “demand” and “credits” projections) in each scenario, and divide the money spent on offsets in scenario 2 over scenario 1 by the additional carbon removed, and repeat for scenario 3. We calculate these numbers with no discounting and with a 3% yearly discount rate.

Table 1: Cost-effectiveness of offset money.

The price per ton of CO2 when the future growth enabled is taken into account is much lower than the $1100/ton price for present day removal. In the most generous scenario (offset once, no discounting, 30 years), offsetting right now removes CO2 at a price of $25/ton.

Regardless of the scenario, Climeworks is increasing their removal capacity each year in our models due to the minimum 5% growth rate. As a secondary endpoint, we show in Table 2 how the price of a carbon offset decreases due to scale.

We note that our projections, despite being estimates based on general concepts and not informed by any real physical or market characteristics of Climeworks’ work, are within a reasonable range of prior techno-economic analyses of DAC:

  • Climeworks stated in 2019 that they have a roadmap to $200/ton “over the next five years” and that they intend to reach 1 million tons of removal annually by 2030. Our model likely makes conservative estimates about Climeworks’ growth. It is likely that Climeworks will grow substantially faster than 5-10% over the next few years; we do not explore this as we use a constant growth rate for 30 years. In addition, we use retail prices, where Climeworks’ statement is likely about true cost.

  • A recent learning-by-doing model of Climeworks published by Klaus Lackner and Habib Azarabadi of Arizona State University’s Center for Negative Carbon Emissions estimates that $200MM of purchases are needed to bring down the cost of DAC to $100/ton. This is far lower than our model suggests, with a cumulative demand of over $1B before costs reach $100/ton, though their sensitivity analysis also explores amounts into the billions.

We do not assert our estimates to be precise and certainly refer interested readers to the growing body of literature on the economics of DAC, some of which we reference in our overview of DAC. We have low confidence in the exact outputs of the model. Our main goal here is to show the mechanism by which, under reasonable assumptions, carbon credits that support an early-stage removal technology can be shown to enable further removal in the future, and are thus more cost-effective than they may appear on face.