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The race is on to build the world’s biggest plant that sucks carbon straight from the sky—with tiny Iceland emerging as an unlikely superpower

June 28, 2022, 9:10 AM UTC

In the world of green tech, few sectors are hotter than direct air capture—or DAC. Think giant fans that draw planet-warming carbon dioxide out of the atmosphere, and then store the polluting material away for good, usually deep underground or on the bottom of the ocean.

And if there’s an epicenter to this promising innovation it’s Iceland, already home to the world’s biggest DAC plant, installed last autumn by the Swiss startup Climeworks. In March, Fortune detailed the story of that plant, called Orca, and that of Climeworks’ founders Christoph Gebald and Jan Wurzbacher.

The volcanic island in the North Atlantic is now about to get its second such direct air capture and storage facility, this one an order of magnitude larger. On Tuesday, Climeworks announced it had broken ground on the intentionally named Mammoth plant. Climeworks says that when Mammoth goes online in 2024 it will suck 36,000 tons of CO2 out of the sky annually.

To put that into context: Climeworks’ Orca plant has a capacity of removing 4,000 tons of CO2 from the atmosphere each year—the equivalent of taking 850 cars a year off roadways. To put it mildly, these two plants alone will have a minimal impact on keeping global temperatures from rising above the closely watched 1.5 Celsius threshold. The United Nations’ Intergovernmental Panel on Climate Change calculates we’ll have to remove 5 to 10 gigatons—as in, billions of tons—of CO2 from the air each year by 2050 “to prevent the world from overheating.”

Still, DAC projects are in huge demand. The IPCC, International Energy Agency (IEA), the European Union, and the U.S. Department of Energy are bullish on the technology. The IEA forecasts DAC could remove 85 metric megatons of CO2—equivalent to more than 21,000 Orca installations—out of the atmosphere by the end of the decade. And the Biden administration has earmarked $3.5 billion—part of last November’s $1.2 trillion infrastructure spending package—for the construction of direct air capture hubs around the country. “There is definitely bipartisan support in Congress for direct air capture right now,” Erin Burns, executive director of the climate-focused NGO Carbon180, told Fortune earlier this year.

Investors, too, are bullish.

Last month, Swiss startup Climeworks secured a $650 million funding round, enough to make it Europe’s newest unicorn—that is, a startup valued at more than $1 billion. The blue-chip funders include John Doerr, M&G, Swiss Re, BigPoint Holding, and J.P. Morgan Securities.

The funding will go to building out more Climeworks DAC plants around the world. On Tuesday, Climeworks said the company is on pace to scale up rapidly in the coming years. For example, it sees the possibility of adding “multi-megaton capacity [facilities] by 2030, [and it’s] on track to deliver gigaton capacity by 2050.”

There’s a race underway to see which firm can build the world’s largest DAC facility. Carbon Engineering, a Canadian company, has plans this year to break ground on an even bigger DAC facility in the middle of fracking country, Texas’s Permian Basin, with Occidental Petroleum, and another in Scotland. When completed in 2024, the Permian plant could suck a Texas-size 500,000 to 1 million tons of CO2 out of the sky annually. For the Scottish project, Carbon Engineering will team with Storegga, another startup trying to crack the DAC market. That one is due to be operational in 2026 with a capacity of up to 1 million tons.

For more on this topic, please read: Giant fans made by this Swiss startup are sucking planet-warming CO2 right out of the sky.