Direct Air Capture Project Offtaker Deal: Commercial Pricing and Capacity Milestones
The carbon removal landscape is undergoing a seismic shift as Direct Air Capture (DAC) technology moves from pilot projects to commercial viability through landmark offtake agreements. In 2025, major corporations are locking in multi-year deals for carbon removal credits, providing the financial certainty needed to scale this critical climate technology.
Major Offtake Agreements Driving Market Growth
Several high-profile deals have emerged in recent months, signaling growing corporate confidence in DAC. 1PointFive, a subsidiary of Occidental Petroleum, announced a 10-year agreement with JPMorgan Chase for 50,000 metric tons of carbon removal credits from their STRATOS facility in Texas. This facility, scheduled to become commercially operational this year, represents the largest DAC plant in the world with 500,000 metric tons annual capacity.
Perhaps even more significant is Google's groundbreaking 15-year agreement with startup Holocene to purchase 1.5 million tons of carbon removal credits at just $100 per ton. As reported by Clear Blue Markets, this represents the lowest price ever for a DAC offtake deal and could transform market expectations. 'This pricing breakthrough demonstrates that DAC can become cost-competitive with other carbon removal approaches,' said a climate technology analyst familiar with the deal.
Capacity Expansion and Funding Landscape
The global DAC capacity is experiencing explosive growth. According to market analysis, 84 DAC plants are expected to be operational by the end of 2025 with 569 kilotons of CO2 per year capacity, representing an 873% increase driven primarily by 1PointFive's STRATOS plant. By 2032, projections suggest 114 facilities could capture 2.1-5.4 million tons annually.
Funding remains a critical component of this expansion. The U.S. Department of Energy has opened applications for up to $1.8 billion in new funding through the Regional DAC Hubs program. This funding supports mid- and large-scale commercial facilities, with large-scale projects eligible for up to $600 million each. However, political uncertainty looms, as the Trump administration appears poised to terminate funding for two major DAC plants that were set to receive over $1 billion in government grants.
Commercial Pricing Models and Market Dynamics
The emergence of standardized pricing models is a key development for DAC commercialization. While early DAC credits commanded prices above $1,000 per ton, recent deals show dramatic reductions. The Google-Holocene agreement at $100 per ton establishes a new benchmark, though most commercial deals remain in the $200-500 range.
'What we're seeing is the maturation of a market,' explained a carbon markets expert. 'Corporate buyers are no longer just making philanthropic purchases—they're securing long-term supply at predictable prices to meet their net-zero commitments.'
Deep Sky and Rubicon Carbon's multi-year offtake agreement represents another model, where companies partner to develop capacity while securing future supply. This approach spreads risk and provides developers with the revenue certainty needed to attract additional investment.
Technology and Regional Distribution
DAC technology continues to evolve, with solid sorbent (S-DAC) and liquid solvent (L-DAC) approaches dominating commercial deployment. Emerging technologies like electro-swing adsorption and membrane-based DAC promise further efficiency improvements.
Geographically, North America leads with 517.7 kilotons of CO2 per year projected capture by 2025—20 times more than Europe by 2030. Texas has emerged as a hub, with Occidental's STRATOS facility representing 88% of global DAC capacity when operational.
Future Outlook and Challenges
The path forward for DAC faces both opportunities and challenges. While corporate offtake agreements provide crucial demand signals, scaling to the levels needed for climate impact—estimated at 400 million metric tons annually to achieve net-zero goals—requires massive additional investment.
Energy requirements remain substantial, with current DAC plants needing significant power inputs. Integration with renewable energy sources and development of more efficient capture processes are active areas of research and development.
Despite these challenges, the commercial momentum is undeniable. As one industry insider noted, 'We've moved from asking if DAC works to negotiating how much it costs and who gets the credits. That's commercial reality.'