REYKJAVIK • In Iceland's barren landscape, a new container-like structure has risen alongside plumes of steam near the Hellisheidi geothermal power plant. Its job is to undo some of the damage that carbon dioxide (CO2) emissions are causing to the planet.
The facility, called Orca and built by the Swiss start-up Climeworks, will suck CO2 out of the air. Icelandic start-up Carbfix will then pump it deep into the ground, turning it into stone forever.
Of the 16 installations Climeworks has built across Europe, Orca is the only one that permanently disposes of the CO2 rather than recycling it.
The plant will capture 4,000 tonnes of CO2 a year, making it the largest direct-air capture facility in the world.
But that only makes up for the annual emissions of about 250 US residents. It is also a long way from the company's original goal of capturing 1 per cent of annual global CO2 emissions - more than 300 million tonnes - by 2025.
The company is now targeting 500,000 tonnes by the end of the decade. It still hopes to reach its 300 million-tonne target, "but the timeline has changed as it takes longer than we originally anticipated to build up an entire industry", said Mr Jan Wurzbacher, one of Climeworks' co-founders.
"Already the demand for carbon removal at Orca is so high that we have decided to scale up this plant and build a roughly 10 times larger plant in about three years."
Investment is pouring into carbon capture as companies and governments search for ways to tame global warming that is already causing devastating weather events.
Still, activists argue that focusing too much on carbon-removal technologies could become a distraction from the work of immediately reducing emissions.
The main challenge for Climeworks is lowering the cost of its service.
Individuals wanting to purchase carbon offsets can pay the company up to US$1,200 (S$1,613) per tonne of CO2. For bulk purchases, such as those made by Mr Bill Gates, the cost is closer to US$600 per tonne.
Climeworks aims to get that cost down to US$200 to US$300 a tonne by 2030, and to US$100 to US$200 by the middle of the next decade, when its operations are at full scale, Mr Wurzbacher said.
With European carbon prices at €62 (S$99) a tonne and many betting it will go above US$100 soon, the lower end of Climeworks' target price would make it cheaper for polluters to use Climeworks than pay the penalty.
Climeworks' targets are reasonable compared with the billions of dollars paid annually in subsidies for electric vehicles, which price a tonne of avoided CO2 at about US$500, said Mr Christoph Gebald, the other co-founder at Climeworks. "If this existed for what we are doing, we would scale up much faster," he said.
Orca cost US$10 million to US$15 million to build, including construction, site development and storage, according to Mr Wurzbacher. "The cost per tonne of Orca is perhaps less important than what we will learn, to get quicker to the large scale and ultimately lower prices," he said.
Climeworks is backed by a group of private investors, as well as Swiss bank Zuercher Kantonalbank. It also has debt financing commitments from Microsoft's climate innovation fund.
While still unprofitable, the bulk of Climeworks' revenue comes from corporate customers including Microsoft, Stripe, Shopify and Swiss Re.