Enverus Intelligence® Research’s recently released CCUS Fundamentals highlights the extremely challenging economics of direct air capture (DAC). Our analysis finds DAC projects are only viable with support from premium carbon dioxide removal (CDR) credits. Currently quoted at ~$600/tonne, the credits are crucial for offsetting high capital and operating costs.
A key milestone on the road to commercialization is OXY subsidiary 1PointFive’s Texas Stratos facility, which is set to begin carbon sequestration by year-end. At $1.3 billion, the world’s largest DAC plant — with a nameplate capacity of 0.5 mtpa of CO2 — must contract more than 43% of of its credits to remain profitable. The challenge for Stratos and the broader DAC sector is securing high-priced offtake agreements to ensure positive returns, with CDR credit contracting emerging as the most effective strategy.
1PointFive has secured ~1.35 million tonnes of CDR credits through multi-year agreements, with Microsoft and Airbus being its largest buyers (Figure 1); this is significant but still well below the threshold we estimate is needed to be NPV positive. Most are contracted through 2030 or earlier, creating uncertainty about future cash flows and raising concerns about the project’s long-term viability.
Research Highlights:
- CCUS – Gigatonne Dreams, Market Realities – The 2025 CCUS Play Fundamentals examines changes across the CCUS landscape over the past year, highlighting shifts in momentum, evolving policy frameworks and emerging opportunities. The report analyzes deployment challenges from permitting delays and public pushback, as well as the rise of credit stacking, low-carbon power and next-generation capture and sequestration technologies. Key players, cost trends and technology readiness are explored to identify where value and competitive advantage are emerging.
- ArcLight Acquires Advanced Power – Opportunity Meets Cost Pressure – We examine the potential market value of Advanced Power’s generation portfolio and the key factors that impact its valuation.
- Chasing Connection – Interconnection Timelines and Economics Post-OBBBA – This white paper for POWER Magazine outlines the state of the interconnection queue, project timelines, delays and project economics following the passing of the One Big Beautiful Bill Act. We examine the impacts on project economics and feasibility as tax credit timelines grow closer and projects rush to connect.
Enverus Intelligence® | Research, Inc. is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations, and macro-economic forecasts, and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. See additional disclosures here.
