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The DAC 2025 Summit, held in New York City on March 17-18, 2025, was a no-holds-barred call to action to scale Direct Air Capture (DAC) globally. The event was charged with urgency as speakers tackled policy shifts, the clash between regulatory vs. voluntary markets, and the burning question:
"How do we accelerate deployment now?"
While global leaders signaled commitment, the U.S. remains stuck in limbo, hindered by market uncertainty, slow-moving plans, and an over-reliance on voluntary carbon credit schemes. Meanwhile, Canada, Japan, and emerging markets are aggressively advancing DAC-friendly policies, setting the stage for fierce global competition.
This comprehensive recap dives into key insights, challenges, and opportunities that will shape the future of DAC.
Panel: Driving demand for DAC
Brian DiMarino Managing Director and Deputy Director of Global Sustainability - JPMorgan Chase
Julius de Groot Senior Manager, Strategic Partnerships - Climeworks
Adam Fraser CEO - Terraset
Emily Pontecorvo Founding Staff Writer - Heatmap News
This panel highlighted key challenges in scaling the market. While DAC sales increased by 78%, most purchases come from Microsoft, Google, and Frontier, with new buyers declining significantly. Government pushback is also emerging, adding complexity to market adoption.
Market Challenges & Shifts:
Julius de Groot (Climeworks) emphasized the need for DAC to be financially viable, aligning with market mechanisms like carbon trading. Brian DiMarino (JP Morgan Chase) noted the lack of economic understanding, stressing the need for proof points and clear incentives. Adam Fraser (Terraset) highlighted confusion over whether DAC funding belongs in sustainability, marketing, or procurement budgets, complicating corporate adoption.
Scaling Solutions:
Most DAC deals are inbound for the speaker organizations, limiting strategic supplier selection. Standardized contracts are needed to streamline complex transactions, which currently require extensive handholding. One magic wand kind of opportunity would be for financial institutions to become the defactor insurer for DAC purchases, addressing liability concerns like leakage and failure.
Regulatory vs. Voluntary Markets:
The U.S. relies on voluntary commitments, while the EU pushes regulatory adoption. Panelists agreed that reaching $100/ton for DAC is unrealistic without renewable energy integration. To scale demand, DAC must move beyond voluntary initiatives to structured financial and policy frameworks.
Presentation: The role of policy in DAC by Center for climate and energy solutions
Pamela Pope - Carbon Management Senior Fellow, Center for Climate and Energy Solutions
Diandra Angiello Technology Innovation Policy Associate Fellow, Center for Climate and Energy Solutions (C2ES)
Direct Air Capture (DAC) is following a familiar playbook for tech innovation: publicly funded R&D → pilot demonstrations → first-of-a-kind (FOAK) deployment (often government-backed) → full-scale commercial adoption (Nth-of-a-kind, or NOAK). But despite meaningful progress, DAC still faces major gaps, and policy is going to make or break its trajectory.
Where We Stand on DAC Policy
Right now, we’ve got a handful of policies that provide critical support for DAC, but they don’t yet add up to a robust market driver.
First, there’s 45Q, the U.S. tax credit that incentivizes carbon capture and sequestration. It’s one of the biggest financial levers we have, but it’s still not enough to make DAC competitive at scale. Then there’s the CDR Purchase Pilot Prize, which puts some early dollars behind carbon removal. The Regional DAC Hubs Program is setting up infrastructure, while Class VI well approvals (needed for CO₂ sequestration) are slowly getting through the permitting bottleneck. Meanwhile, national labs are working on MRV (Measurement, Reporting, and Verification) standards to make sure DAC actually delivers on its promises.
There’s also the DAC Pre-Commercial Prize Program, designed to support early-stage commercialization, and the LPO (Loan Programs Office) authority, which can finance large CCUS (Carbon Capture, Utilization, and Storage) projects. And of course, there’s the usual federal R&D funding to push tech development forward.
The Gaps That Could Kill DAC Scale-Up
So what’s missing? A lot.
Energy is a huge issue. DAC is power-hungry, and if it’s not running on clean energy, we’re just shuffling emissions around. Right now, there’s no clear pathway to solving this at scale.
There’s also a massive funding gap. The jump from FOAK to NOAK is where most clean energy tech stalls, and DAC is no exception. We need more capital to fund those first few real-world deployments.
Then there’s demand—or rather, the lack of it. The biggest buyers today (Microsoft, Google, Frontier) account for 80% of DAC purchases, and new buyers are trickling in at a frustratingly slow rate. Without stronger incentives, most companies just don’t see a reason to buy DAC credits.
Permitting is another headache. If you want to sequester CO₂, you need a Class VI well permit, and getting one is a slow, bureaucratic nightmare. Faster approvals would help.
45Q needs an upgrade. While it’s useful, it’s not enough to close the cost gap for DAC. Expanding it—either by increasing the credit value or broadening eligibility—would be a game changer.
Finally, we need international coordination. Carbon markets are still fragmented, and DAC could benefit from global trade mechanisms that create broader demand.
Insight:
DAC isn’t going to scale on vibes alone. Right now, we’re sitting at the intersection of big potential and major uncertainty. Policy can provide the push DAC needs, but only if we close these critical gaps—funding, permitting, demand, and energy. If we get this right, DAC could become a key pillar of carbon removal. If not, it risks becoming yet another climate tech that got stuck in the “almost ready” phase.
Presentation: Financing Pathways for the Future of Direct Air Capture
Dr. Katherine Phillips Principal, Boston Consulting Group
DAC is a the FOAK gap today
The Biggest Pain Points for DAC Developers (and How to Solve Them)
Direct Air Capture (DAC) is making progress, but for developers actually building and deploying these projects, three major roadblocks are keeping costs high and adoption slow. Let’s break them down.
1. Balance of Plant: The Hidden Cost Driver
The capture unit itself gets most of the attention in DAC discussions, but a massive share of project costs comes from balance of plant (BoP)—all the supporting infrastructure like compressors, heat exchangers, water treatment, and energy systems. Right now, every DAC developer is essentially reinventing the wheel, building bespoke solutions when standardized, modular BoP designs could help slash costs. Collaboration across the industry—whether through joint ventures, shared R&D, or even government-backed initiatives—could help drive down capital costs the same way it did for renewables.
2. Carbon Credit Transactions: From Chaos to Standardization
Today, buying carbon removal credits is a high-friction, bespoke process. Buyers and sellers negotiate custom agreements, creating high transaction costs and slow deal cycles. If DAC is ever going to scale, we need a transparent, standardized marketplace—akin to how renewable energy credits evolved—where buyers can evaluate suppliers with clear metrics on permanence, durability, and price. A well-defined, standardized transaction framework could broaden the pool of buyers, lower legal and administrative overhead, and speed up adoption.
3. Financing: Pricing Risk Instead of Avoiding It
The financial world is still unsure how to price DAC risk, and that’s a huge problem. Banks, investors, and lenders don’t fully understand the technology risk, operational risk, or creditworthiness of carbon removal buyers—so they’re either stepping aside or demanding sky-high returns. This is where innovative financing structures—like loan guarantees, insurance mechanisms, and blended finance models—could unlock capital. If we want to bridge the gap from FOAK to NOAK, we need financing mechanisms that de-risk early projects without completely shifting the burden onto developers.
Insight:
For DAC to succeed, costs need to come down, transactions need to be simpler, and financing needs to be smarter. Collaboration on balance of plant, a marketplace for standardized carbon credit sales, and financial instruments that actually price risk instead of avoiding it could be game changers. Otherwise, DAC risks staying stuck in pilot purgatory—just like so many other promising climate technologies before it.
Panel: Perspectives on Financing DAC Projects
Nicholas Eisenberger Chair Direct Air Capture Coalition
Phil de Luna Chief Science & Commercial Officer, Deep Sky
Richard Kauffman CEO, Coalition for Green Capital
Dr. Katherine Phillips Principal, Boston Consulting Group
Cracking the Financing Code for DAC: Bankability, Securitization, and Capital Risks
Scaling Direct Air Capture (DAC) isn’t just about technological breakthroughs—it’s about unlocking financing mechanisms that make these projects investable. Right now, the biggest challenge is bridging the gap between DAC as an emerging technology and the kind of financial structures that built the renewables industry.
The Role of Green Banks and Bankability
One potential solution? Green banks. Unlike traditional banks, green banks aren’t regulated in the same way and don’t operate with the same short-term deposit constraints. They’ve been instrumental in scaling community solar, and a similar model could be applied to DAC. The key takeaway: bankability isn’t just about the tech—it’s about how the financing is structured.
As DAC scales, cost reductions will follow a volume-doubling effect—but so will industry consolidation. This means not every DAC startup will survive, and funding will concentrate around a few winning technologies (which is tough but inevitable).
Securitization: Can DAC Follow Solar’s Playbook?
Richard Kauffman’s insight on securitization is critical here. In residential solar, securitization—bundling many small assets into a financial instrument sold in the bond market—was a small but growing piece of the financing stack. But for DAC, getting to securitization requires a few key ingredients:
- Data on project performance to help credit agencies assess risk.
- Standardized contracts so investors know what they’re buying.
- A large enough pool of projects to create homogenous financial instruments.
45Q tax credits could be leveraged here, especially with new provisions allowing for cash and cash equity treatment. However, traditional project financing may struggle to fit DAC, since securitization works best when you have a predictable, steady revenue stream—which DAC doesn’t yet have.
The Investor Trap: Tech Developers vs. Project Developers
Investors may push DAC startups to take on both roles—technology developers and project developers—either by adopting an owner-operator business model or by licensing their technology early to larger corporations with expertise in both areas. The challenge is that most tech companies have developed deep expertise in technology itself, but transitioning into project deployment presents significant hurdles. However, the most successful companies have managed to scale their first-of-a-kind (FOAK) project independently, proving their technology before deciding whether to license it or become the de facto manufacturers. A case-by-case approach is necessary to balance scaling efforts with financial capability and operational expertise.
Opportunities Beyond the U.S.: Canada’s DAC Play
If the U.S. market drags its feet on DAC-friendly policies and financing structures, Canada is positioning itself as a welcoming hub for DAC deployment. Canada is advancing Direct Air Capture (DAC) through financial incentives, regulatory frameworks, and industry partnerships. The federal government offers a 60% investment tax credit for carbon capture and supports DAC projects via the Canada Growth Fund. The upcoming federal offset protocol will enable carbon credit generation. Deep Sky, backed by Bill Gates’s Breakthrough Energy, is developing DAC test sites in Alberta. The Pathways Alliance, a coalition of oil sands producers, is investing in CCS and DAC. These initiatives position Canada as a hub for DAC deployment, aiming to drive carbon removal innovation and achieve net-zero emissions by 2050.
What Needs to Happen Next?
- More transparency in data sharing to build credibility and unlock new financial tools.
- A path toward standardization in contracts to make DAC credits more liquid.
- Green banks or alternative financing vehicles to de-risk early projects.
- Clarity around the role of tech developers vs. project developers—so startups don’t get forced into doing everything.
DAC financing isn’t impossible—it just needs the right mix of financial innovation, data transparency, and smart policy moves.
Panel: MRV, DAC, and Contracts: Why Standards Will Shape the Carbon Market
Peter Mayer Partner, Stairs Dillenbeck Finley Mayer PLLC
Peter Minor Co-founder, Absolute Climate (universal standards)
Fixing Carbon Credit Finance: Standardization, Risk Clarity, and the Path to Bankability
One of the biggest obstacles to scaling Direct Air Capture (DAC) isn’t just the technology—it’s the complexity of carbon credit agreements. Right now, carbon credit contracts are overly customized, often written like an art piece rather than a financial instrument. This lack of standardization makes transactions slow, opaque, and difficult to scale, keeping critical players like banks and insurers from fully entering the market.
Demystifying “Claims” & Setting Clear Expectations
A fundamental issue is how carbon credit “claims” are structured and understood. Buyers, regulators, and the public all have different interpretations of what a DAC credit actually represents. Without clear definitions and transparent methodologies, the market remains convoluted. If we want banks, insurers, and institutional investors to participate, we need to set clear expectations for what DAC credits deliver and how they should be valued.
From Complex Custom Contracts to Venture-Style Financing
The best analogy for fixing this? We need a SAFE or Convertible Note-style agreement for carbon credit purchases—simple, standardized contracts that allow buyers to commit capital without the painstaking complexity of custom agreements. Today, every credit purchase is a bespoke deal, which prevents liquidity and slows adoption. Standardizing credit contracts would:
- Reduce friction in transactions and accelerate market participation.
- Allow buyers and investors to compare DAC credits more easily.
- Make it easier for banks and insurers to price risk and offer financial backing.
Why Liability is a Key Barrier
One of the biggest challenges in the DAC space is who holds liability if a carbon removal project fails or underperforms. Buyers don’t want to carry it, and developers can’t take on unlimited risk. The compliance market will eventually force standardization, but voluntary markets (especially in the U.S.) still struggle with how to assign liability without killing demand.
To break this deadlock, we need:
- Clear contractual definitions of liability ownership.
- Insurance products that cover DAC project risk.
- Stronger regulatory frameworks to prevent greenwashing without discouraging investment.
Consolidation is Coming—And That’s a Good Thing
Right now, carbon removal methodologies are all over the place. In the next few years, consolidation will help simplify and standardize the sector. This isn’t necessarily a bad thing—it means fewer but more credible approaches will emerge, making it easier for banks, policy makers, and large corporate buyers to engage.
Insights:
- Move toward standardized credit contracts to reduce complexity.
- Align incentives with banks and insurers to create risk-sharing mechanisms.
- Focus on a few key success stories that can set the foundation for wider adoption.
- Prepare for inevitable consolidation—the market will shrink before it scales.
If we can get this right, DAC credits could evolve from niche purchases into a liquid, standardized asset class, paving the way for large-scale investment and meaningful carbon removal.
Panel: Scaling DAC Solutions Worldwide
Na'im MerchantExecutive Director, Carbon Removal Canada
Masaki Harada Innovation Lead, Mitsubishi Americas
Manoel Soriano Assessor Econômico na Secretaria de Desenvolvimento Econômico, Inovação e Simplificação do Município do Rio
James Mwangi Founder and CEO, Africa Climate Ventures
Dr. Mengye Zhu Assistant Research Professor, University of Maryland
Aaron Benjamin Founding Team and EMEA Lead, Direct Air Capture Coalition
Global DAC Markets: Emerging Opportunities & Regulatory Shifts
The global Direct Air Capture (DAC) landscape is evolving rapidly, with key regions making strategic moves to develop regulatory frameworks, manufacturing capacity, and deployment incentives. The latest insights from industry leaders highlight where demand is growing, where policy is taking shape, and which markets could drive the next wave of DAC adoption.
Japan: A Regulatory Market in 2026
Japan is set to introduce a regulatory carbon market in 2026, which will significantly increase demand for DAC and provide structured incentives for deployment. The move will expand carbon removal options and create new commercial opportunities. Japan’s focus on industrial decarbonization means DAC could become a major tool in its broader carbon neutrality strategy.
China: The Manufacturing Powerhouse with Policy in the Works
China is well-positioned to manufacture DAC components at scale, driving down costs through supply chain efficiencies. While policy discussions have been ongoing, there’s been no official regulatory framework implemented yet. If China moves forward with strong policy commitments, it could become both a major producer and consumer of DAC technologies.
Canada: A Strategic Hub for DAC Deployment
Canada has emerged as one of the most supportive environments for DAC, particularly in Alberta. The Blue Sky Initiative is opening new doors for large-scale DAC deployment, leveraging the country’s favorable geology for CO₂ sequestration and supportive government policies. This alignment of policy, infrastructure, and investment incentives makes Canada a critical DAC expansion market.
Brazil: Early-Stage Development with Regulatory Potential
Brazil is in the early stages of DAC technology development but is implementing a regulatory carbon market. This shift is expected to drive future demand as industries look for scalable carbon removal solutions. Brazil’s vast natural resources and renewable energy potential could make it a key player in DAC-powered carbon removal projects.
Kenya: A Competitive Hub for DAC in Africa
Kenya is positioning itself as a leading power source for DAC deployment, with its abundant renewable energy and strong competition in carbon markets. Examples like Octavia are driving momentum by leveraging Kenya’s ideal conditions for DAC operations. However, Africa’s DAC market remains highly fragmented, with multiple players competing to establish dominance.
What This Means for DAC’s Future
- Regulation is driving demand—Japan, Brazil, and Canada are setting the stage for stronger carbon markets that will make DAC more financially viable.
- China’s manufacturing power could lower costs but still needs regulatory certainty to unlock its full potential.
- Canada and Kenya are emerging as prime deployment sites due to strong infrastructure and energy advantages.
- DAC competition in Africa is heating up, but market fragmentation remains a challenge.
DAC isn’t just a U.S. or European play—global policy and regional advantages are shaping where and how it will scale. The next few years will be critical in determining which markets emerge as DAC leaders and where major investments will flow.
Panel: Integrating DAC with Clean Energy Systems
Dr. Jesse Jenkins Assistant Professor of Mechanical and Aerospace Engineering, Princeton University
Mary Dhillon Senior Associate, Strategy, Fervo Energy
John Cornwell Director of Policy and Research, Good Energy Collective
Gabe Messercola Associate Director, EDF Renewables
Dr. Colin McCormick Principal Scientist, Carbon Direct
Clean Energy & DAC: Aligning Resources, Infrastructure, and Policy
Direct Air Capture (DAC) is a power-hungry technology, and finding the right energy sources to drive it is a critical piece of the scale-up equation. With 370kg CO₂/MWh as the U.S. grid’s carbon intensity and a forecasted 200TWh AI power demand from data centers, DAC has a unique opportunity to align with clean energy sources like geothermal and nuclear—if the right policies and commercial structures are in place.
Why Geothermal & DAC Are a Natural Fit
Geothermal energy has a 90% capacity factor, making it one of the few clean baseload energy sources that can provide continuous power for DAC operations. However, transmission constraints often limit geothermal project sizes, as seen with Form Energy’s Utah project, where a 2 GW resource is currently constrained to just 400 MW due to grid limitations. Colocating DAC with geothermal—instead of relying on long-distance transmission—could unlock more of this capacity behind the meter, reducing uncertainty and maximizing utilization.
Public-private partnerships (PPPs) could further accelerate geothermal development for DAC. Geothermal projects face high upfront CapEx, split roughly 50% between surface infrastructure and subsurface drilling. DAC can help justify investment in lower-temperature (<200°C) geothermal applications by providing an integrated use case that cuts total project CapEx by nearly half.
Nuclear & DAC: A Policy & Credit-Backed Opportunity
Small Modular Reactors (SMRs) could also become a key clean power source for DAC, with demonstration projects underway, including an MW-scale nuclear deployment in Illinois. Nuclear projects benefit from 45Q tax credits for carbon capture, creating dual revenue streams for DAC + nuclear integrations.
DAC & Data Centers: Competition or Synergy?
With AI and data centers ramping up demand for clean power, some worry that DAC could be in competition for limited resources. But DAC and data centers have different operational needs:
- Data centers require 99.999% uptime, meaning they need overbuilt capacity, redundancy, and long-duration storage solutions—requirements that geothermal doesn’t fully meet today.
- DAC can be more flexible, adjusting operations based on energy availability and integrating with stranded renewable energy that wouldn’t otherwise be used.
- In Texas’ ERCOT market, data centers and DAC could both draw from the grid and behind-the-meter sources, creating more flexibility in deployment models.
Workforce & Industry Development
One overlooked challenge? Skilled labor.
Geothermal development has been relatively stagnant, and next-gen firms like Form Energy are rebuilding the workforce, pulling heavily from ex-oil & gas talent (60% of hires). DAC will need to develop similar apprenticeship and training programs to create a workforce that understands facilities, operations, and safety—all critical to scaling.
Insights:
- Geothermal-DAC colocation could unlock underutilized geothermal potential, with PPPs helping to overcome transmission bottlenecks.
- Nuclear + DAC has strong policy tailwinds, particularly with 45Q incentives.
- DAC and data centers aren’t direct competitors—DAC can use stranded energy and intermittent renewables that data centers can’t.
- Workforce synergies between geothermal, DAC, and ex-O&G talent will be critical for scaling up the industry.
The opportunity is clear: matching DAC with the right clean energy sources—through policy, commercial partnerships, and smart financing—could be the key to driving both industries forward.