Direct Air Capture — should we offset emissions from gas boilers rather than decarbonising them?
(Spoiler: NO!)
In Nesta’s work on decarbonising homes, a lot of our focus is on switching homes from fossil fuels to low-carbon heating sources. In particular, we think heat pumps of various kinds will be the most widespread solution to decarbonising homes — because they are low carbon and use energy far more efficiently than other heat sources. But we are always keen to test our assumptions and ensure we aren’t missing emerging technologies that might play a role in decarbonising home heating.
One technology we’ve recently been challenged on is direct air capture (DAC) — removing carbon directly from the atmosphere. DAC is an exciting technology that is likely to play some role in stabilising the climate in future decades — providing some of the “net” in net zero. But it has been put to us that, as innovation in DAC progresses and renewable electricity costs fall in many parts of the world, wouldn’t it be cheaper for the UK to offset its emissions from home heating rather than switch over to heat pumps? The idea would be to keep using our carbon-emitting gas or oil boilers and pay a company to remove the equivalent amount of carbon from the atmosphere.
We don’t think this idea is viable or cost-effective — it would come with a number of serious risks and downsides — but we thought it helpful to set out the reasoning behind our view.
What is direct air capture?
DAC involves taking carbon dioxide directly from the air and either storing it or reusing it (for “carbon neutral” fuels). This requires a large amount of heat. There are two types of DAC technology:
- Solid DAC, which captures carbon in solid materials — this requires lower temperatures (typically 80C to 120C) but currently has a higher cost per tonnes of CO2 removed (up to $540 / tonne)
- Liquid DAC, which captures carbon in liquids — this requires much higher temperatures (around 800C) but currently has a lower cost per tonne of CO2 removed (up to $340 / tonne).
Should we offset emissions from gas boilers using direct air capture rather than decarbonising them?
Might it be more cost-effective to decarbonise home heating by offsetting its carbon emissions by directly capturing carbon from the air? Is this a viable alternative to replacing fossil fuel boilers with low-carbon heating systems?
There are two reasons we think this is unlikely or undesirable:
- DAC is highly unlikely to scale up quickly enough to remove emissions from UK home heating (and heating would not be a priority for scarce offsetting capacity).
- Combining DAC with gas boilers would mean using two lots of energy — electricity for the DAC and gas for home heating — which is likely to increase costs.
Given that DAC is at an early stage in its development and its future trajectory is very hard to predict, relying on it instead of adopting currently available technologies to reduce emissions would be a very high-risk strategy. It would certainly make UK emissions higher than they would otherwise be in the years up to 2050, and have a high risk of making them higher after 2050.
In addition, carbon offsetting is also a controversial approach which has significant risks of not achieving stated carbon reductions. Shifting to an offsetting approach would likely be very bad for the UK’s climate diplomacy, making it easier for other countries to opt out of emissions reductions. We also think that, while the transition to heat pumps or other low-carbon heating is not easy, it will bring wider benefits in terms of health, comfort, productivity and energy security to the UK.
Issue 1: Can direct air capture scale up quickly enough?
The International Energy Agency (IEA) estimates, in a broadly supportive report, that DAC could scale up to remove 80 million tonnes of carbon dioxide per year by 2030 and 980 million tonnes per year by 2050 globally. This would be an increase from about 0.1 million tonnes currently. The 2050 projection is equivalent to around 2.5% of current global carbon emissions.
If the UK were to offset all of its home heating emissions (around 60 million tonnes CO2e) using DAC, that would use up around 6% of the total global DAC capacity in 2050. The UK’s heating emissions are far from the hardest to abate emissions globally, so this would be very hard to justify. This would also result in much higher emissions over the period to 2050 than outlined in the UK’s carbon budgets, increasing the risk of serious climate change.
It is possible that DAC might scale up more rapidly than forecast by the IEA, but the scale up would need to be faster by a factor of at least 20–30 times to make it viable for the UK to offset home heating in this way. Adopting a DAC-first approach would have a very high risk of failure.
Issue 2: Can offsetting via direct air capture be cheaper than switching to low-carbon heating?
To generate the heat needed by DAC, the current leading companies estimate the long-term energy needs for DAC at or just over 2,000 kWh/tonne. A typical UK gas boiler emits just over 2 tonnes of CO2e per year, so optimistically offsetting this via DAC would require around 4,000 kWh of energy (likely renewable electricity) per year. This is roughly the same as the electricity a heat pump will require to heat a typical UK home for a year.
Scaled up to a system level, DAC would require around 120 TWh of clean electricity per year to fully offset the UK’s home heating emissions, equivalent to roughly a third of the UK’s current electricity demand.
It is likely that DAC could access electricity more cheaply than in UK homes, as it could locate in the places with the cheapest energy (such as Texas, although the IEA lists the Middle East and China among the likely lowest cost locations). While electricity for DAC is likely to be cheaper (and transmission costs would be significantly lower), UK renewable electricity costs have fallen significantly and are likely to fall further. Importantly, DAC is only likely to become cheap if energy prices fall to very low levels, and it is unlikely that such changes would occur in some countries but have no effect on the UK.
Under optimistic assumptions, the costs of running DAC could be lower than the cost of running heat pumps in the very long term. The IEA suggests costs could fall to below $100 / tonne, although this is uncertain, which might put the cost of offsetting a typical gas boiler in the UK at around £200 a year. Some of this cost will be made up of energy costs, but a significant chunk would be capital requirements. By contrast, even after price reductions, heat pumps are likely to have capital costs of around £500 per year over their lifetime, so their price could be significantly higher.
It should be stressed though that this analysis uses the most optimistic assumptions for falls in DAC costs and does not apply the same optimism to heat pumps.
However, the DAC offset model would also require the UK to use a large amount of natural gas as well as the electricity to power offsets. Natural gas boilers already have similar annual running costs to heat pumps, and this is before factoring in the expected falls in electricity costs, which should make heat pumps considerably cheaper to run. Indeed, falling DAC costs are premised on dramatically falling electricity costs — so in a scenario where DAC is viable, heat pumps would likely be significantly cheaper to run than gas boilers (unless UK electricity costs remain much higher than elsewhere). Gas is also primarily imported, volatile in price and bad for the UK’s productivity and energy security.
Ultimately, a DAC offset model would mean dramatically increasing overall energy use, effectively getting one for the price of two. And that is likely to significantly increase cost.
Other considerations
Aside from the challenges of scale and cost, there are other reasons why moving to a DAC-first strategy would cause problems:
- Carbon offsetting is a controversial approach, especially where UK emissions are offset in another country. Measuring carbon emissions and removals in different places is challenging and requires complex legal agreements, and there is a risk that emissions would not be offset in the way described. For this reason, carbon offsetting is sometimes associated with the practice of greenwashing.
- The UK’s climate diplomacy would also be badly affected by taking a DAC-first approach. The UK is a leading country on tackling climate change, and as one of the world’s biggest historic emitters has a moral duty to lead on reducing carbon emissions. Abandoning the decarbonisation of home heating in favour of offsetting would almost certainly provoke a negative response from many countries, who would likely threaten to take the same action, increasing the pressure on offsets and reducing action on decarbonising home heating.
- Switching to clean, efficient, low temperature heating will also bring wider benefits to UK homes. Upgrading homes and adopting a steadier approach to heating should improve comfort in homes. In addition heat pumps do not cause air pollution in the way boilers do.
- Eliminating the UK’s reliance on gas — which is primarily imported — should also improve the UK’s energy security and may boost productivity, by reducing input costs.
Sources
The evidence in this piece is largely drawn from 2 sources:
