Direct Air Capture in 2025: The End of Hype, the Start of Realism

June 30, 2025
5
min read
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Hugo Lakin
CDR Partnerships Manager

Table of contents

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TL;DR

TL;DR: In 2025, Direct Air Capture (DAC) is moving beyond hype. While full-scale deployment is still years away, pilot projects, regional innovation, and tactical responses to U.S. policy changes are shaping a more grounded and resilient DAC ecosystem. Progress is slow, but deliberate—and foundational for 2030 success.

The Market Matures: From Hype to Hard Reality

Direct Air Capture (DAC) has evolved significantly since its early hype cycles. In 2025, sky-high fundraising and overly ambitious timelines have given way to pragmatic experimentation. While 1PointFive continues to lead the pack, most DAC systems won’t reach commercial scale until 2027 or later.

But progress hasn’t stalled. Capital is still flowing, and long-term offtake agreements are in play. The spotlight has simply shifted: from commercial headlines to foundational pilot projects that stress-test technology, generate lifecycle data, and refine operations.

A recent Sylvera blog post, “Direct Air Capture Explained”, breaks down the fundamentals of DAC technology, including its purpose: to remove CO₂ directly from ambient air and store it permanently underground or in long-lived products. The blog highlights that unlike traditional carbon capture, DAC isn't tied to point-source emissions, giving it a critical role in neutralizing residual or legacy emissions.

Case Study: Climeworks

Climeworks faced criticism for emitting more CO₂ than it removed, but this critique missed the nuance. Orca and Mammoth were always designed as learning platforms. Their emissions are transparently reported in Life Cycle Assessments (LCAs)—a practice that underpins credit integrity in voluntary carbon markets. The emissions of a scaling company are not the same as the emissions of a carbon credit.

CTA: Learn how Sylvera ensures high-integrity LCAs.

Deployment Trends: Small Pilots, Big Learnings

According to the IEA, global DAC capacity remains low—just over 10,000 tonnes per year in 2023—but over 130 new facilities are in the pipeline, signaling a dramatic scale-up trajectory. Pilot plants deployed in 2025 are typically small (hundreds to low thousands of tonnes), but average project sizes are expected to increase in 2026 and 2027. This reflects growing technical confidence and a readiness to scale responsibly.

These "super pilots" are bridging the gap between R&D and full commercialization. And critically, they generate the operational data needed to improve monitoring, reporting and verification (MRV) standards.

In Sylvera’s analysis of DAC MRV frameworks, we highlighted the importance of independently validated methodologies for quantifying CO₂ removed, energy inputs, and permanence. As carbon credit buyers become more sophisticated, MRV robustness will define which projects attract financing.

[Approach to DAC image]

Between Policy Uncertainty and a Push for Scale

The DAC market is at a crossroads. While durable carbon removal is increasingly recognized as essential for net zero, barriers remain: high costs, energy demands, and infrastructure challenges.

In the U.S., policy support is cooling, but not frozen. States are stepping up as the federal focus wavers.

‍Corporate demand for durable CDR is closely tied to net-zero target-setting frameworks. In our 2025 CDR survey, 65% of respondents identified clear net-zero standards as the main factor that would increase their motivation to purchase durable removals.

A Cooling in U.S. Federal Support

The potential return of a Trump administration has triggered uncertainty. Programs like the Carbon Negative Shot and DAC Hubs are at risk. However, previously allocated funding (e.g., IIJA, 45Q tax credits) is still accessible—if developers move quickly.

Buyers and developers are hedging by concentrating in states like California, New York, and Washington, where clearer incentives and tools like LCFS remain stable.

CTA: See how Sylvera supports MRV compliance in shifting policy environments.

A December 2024 article in Mongabay highlights growing scrutiny over DAC’s reliance on renewable power and permanent storage—resources that are not evenly distributed. This criticism underscores the need for more context-specific deployment strategies.

Tactical Adaptation

Developers are co-locating DAC facilities with industrial infrastructure to leverage waste heat and clean energy. The U.S. DAC ecosystem is becoming more tactical, less dependent on federal support, and more operationally grounded.

For buyers, diversification is key. Some corporations are now building DAC procurement into a broader portfolio of high-quality carbon removal, recognizing that no single approach will scale fast enough on its own.

Global DAC Leaders: Canada and Kenya

Canada

  • Up to 60% tax credits for DAC
  • Clean hydroelectric power
  • Strong geological storage
  • Home to leading players like Deep Sky

Canada is positioning itself as a North American DAC leader, supported by its geology and progressive policy. The presence of low-carbon energy and permanent storage makes it a low-risk jurisdiction for developers.

Kenya

  • Harnesses geothermal and solar energy
  • Basalt-rich geology ideal for mineralization
  • Hosts innovators like Octavia Carbon and Sirona Technologies

Kenya is leveraging its natural resources and clean energy infrastructure to test scalable, affordable DAC models. These markets also provide a testbed for Sylvera’s project evaluation frameworks in non-OECD contexts.

Chasing Scalable, Low-Cost DAC Models

DAC innovators are racing toward viable, scalable models:

  • Co-products: Avnos generates clean water with CO₂ removal
  • Industrial integration: Neocarbon and Capture6 embed DAC into existing facilities
  • Modular design: Spiritus and Heimdal use passive airflow to cut fan-related costs

A split is emerging between:

  • Technology providers (e.g., Sustaera, Mission Zero)
  • Project developers (e.g., Deep Sky)

This specialization reflects a maturing value chain, as seen in 1PointFive’s acquisition of Holocene. However, scalability will hinge on delivering lower cost per tonne while maintaining credit integrity.

Read more on Sylvera’s framework for DAC project quality.

What Will Unlock Scale?

DAC remains early-stage, but its trajectory is clear. To reach climate-relevant scale, three enablers must converge:

  1. Stable and credible policy (federal, state, or international)
  2. Reliable access to clean, additional energy and geological storage
  3. Transparent, high-integrity MRV and LCAs

As the market matures, third-party data will become increasingly critical for risk-adjusted credit pricing, portfolio construction, and audit readiness.

CTA: Discover how Sylvera supports DAC project developers with carbon credit integrity and MRV solutions.

Final Word: The Work of 2025 Builds the Future

Let’s not mistake slow for stagnant.

The strategic pilot projects, policy adaptations, and regional breakthroughs happening in 2025 are laying the foundation for carbon removal at scale. If you're a DAC developer, investor, or corporate buyer—this is your moment to build.

Ready to assess the quality and climate impact of your DAC project? Talk to Sylvera about our carbon credit ratings and MRV solutions.

Direct Air Capture (DAC) in 2025: FAQs

Where is Direct Air Capture in terms of progress in 2025?

DAC is transitioning from hype to hard reality with deliberate, foundational progress. Global DAC capacity remains modest at just over 10,000 tonnes per year as of 2023, but over 130 new facilities are in the pipeline. Most DAC systems won't reach commercial scale until 2027 or later, but 2025 is seeing strategic "super pilot" projects that bridge R&D and commercialization while generating crucial operational data.

What does Direct Air Capture need to continue progress in 2025?

Three key enablers must converge for DAC to reach climate-relevant scale: stable and credible policy support (federal, state, or international), reliable access to clean, additional energy and geological storage, and transparent, high-integrity monitoring, reporting, and verification (MRV) systems with robust life cycle assessments (LCAs).

How is U.S. policy uncertainty affecting DAC development in 2025?

While federal support is cooling, DAC development continues through tactical adaptation. Previously allocated funding from programs like IIJA and 45Q tax credits remains accessible for quick-moving developers. The industry is hedging by concentrating in supportive states like California, New York, and Washington, while co-locating facilities with industrial infrastructure to leverage waste heat and clean energy.

What are the main Direct Air Capture technology approaches being tested in 2025?

DAC innovators are pursuing diverse scalable models: co-product generation (like Avnos producing clean water alongside CO₂ removal), industrial integration (Neocarbon and Capture6 embedding DAC into existing facilities), and modular design approaches (Spiritus and Heimdal using passive airflow to reduce fan-related costs). The market is also seeing specialization between technology providers and project developers, reflecting a maturing value chain.

Which countries are leading Direct Air Capture development in 2025?

Canada and Kenya are emerging as global DAC leaders in 2025. Canada offers up to 60% tax credits for DAC projects, abundant clean hydroelectric power, and strong geological storage capacity, making it home to leading players like Deep Sky. Kenya leverages its geothermal and solar energy resources plus basalt-rich geology ideal for mineralization, hosting innovators like Octavia Carbon and Sirona Technologies.

About the author

Hugo Lakin
CDR Partnerships Manager

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