Solutions for visualizing, understanding, and streamlining carbon emissions from various angles, such as business sites and products, corporate activities, and consumer behavior.
Efforts to conserve energy have been underway for several decades, but in recent years, the methods used have become more sophisticated, including AI and other technologies and billing methods based on usage. These solutions optimize energy usage.
Solutions related to batteries and hydrogen, such as electrification (EV) of mobility (means of transportation) such as cars and buses, which used to be fueled by gasoline, to reduce CO2 emissions, and to extract hydrogen for industrial use and to encourage its practical application.
Solutions related to batteries and hydrogen, such as electrification (EV) of mobility (means of transportation) such as cars and buses, which used to be fueled by gasoline, to reduce CO2 emissions, and to extract hydrogen for industrial use and to encourage its practical application.
Solutions that contribute to the fixation and absorption of CO2 in the atmosphere through forest protection and forest management, and offset the amount of greenhouse gas emissions that cannot be fully reduced through the purchase of carbon credits.
One solution is to reduce emissions in society as a whole by recycling metals, plastics, and other resources and products at various stages of economic activities.
Capture CO2 from the Atmosphere; DAC Business Outlook and Heirloom
Direct Air Capture (DAC) technology, which removes CO₂ directly from the atmosphere, is expected to become commercially viable worldwide in the 2030s. In preparation for this, Mitsui & Co. has invested in Heirloom Carbon Technologies, Inc. (hereafter “Heirloom”), a leading player in the DAC industry. We spoke with Yoko Aoki and Taro Tanaka of Mitsui’s Green Innovation Department—the team driving the company’s DAC initiatives—to learn more about the fundamentals of DAC, what sets Heirloom apart, and the future outlook.
Mitsui's Energy Solutions Business Unit was established as a hub for developing new businesses in the decarbonization sector. Within it, the Green Innovation Department identifies promising advanced technologies and business models with a view of long-term outlook, and to create strategic business opportunities that either compliment the current Mitsui business portfolio or potentially create new business opportunities.
Among the various futuristic innovations, Direct Air Capture (DAC) — a technology that directly removes CO2 from the atmosphere — is gaining traction and showing increasing feasibility. But what exactly is DAC?
A Future Market Worth $20–100 Billion Per Year
— DAC, or Direct Air Capture, refers to the technology that directly removes CO2 from the atmosphere. While the concept may sound surprising to those hearing about it for the first time, can you tell us about the background behind its development?
Aoki: Currently, countries around the world have committed to achieving net-zero emissions and carbon neutrality by 2050. To meet these goals, we must address not only future emissions but also the CO2 that has already been released into the atmosphere. Even if we do everything possible to reduce emissions, estimates show that 6 to 10 billion tons of CO2 will need to be removed from the atmosphere annually. At this rate, we will not be able to achieve carbon neutrality.
That's where CDR (Carbon Dioxide Removal) becomes crucial. CDR refers to methods that remove CO2 that's already in the atmosphere. Among them, DAC is considered one of the most promising technologies.
This is because DAC offers significant scalability, flexibility in site selection, and high reliability — meaning that the amount of CO2 captured can be accurately measured.
Yoko Aoki
Manager, Green Innovation Dept., Energy Solutions Business Unit
Joined Mitsui in 2015. After working in new infrastructure development in Africa and India with the Project Division and being stationed in London, she assumed her current role in September 2021. She is responsible for exploring new technologies and innovations related to carbon neutrality and building an investment portfolio in cutting-edge startups. To date, she has invested in fields such as DAC and synthetic fuels.
— It may sound like a dream technology, but is it really possible?
Aoki: In overseas contexts, DAC is sometimes referred to as a "Holy Grail" technology—and it is indeed feasible. However, the current challenge lies in cost. At the high end, DAC can cost nearly $1,000 per ton of CO2 captured. That's why further technological development and cost reduction through scaling up are essential.
Once these cost reductions are achieved, however, the overall CDR market—including DAC—is projected to reach $20–100 billion annually. Additionally, DAC-specific plants capable of capturing approximately 12 million tons of CO2 per year are expected to be built by 2030.
The U.S. Has Positioned DAC as a National Strategic Technology
— DAC industrialization is currently led by the U.S. and Europe. This movement started during President Biden's administration, and the U.S. is aggressively investing in DAC through subsidies. Why is this?
Tanaka: One reason stems from historical responsibility: CO2 can remain in the atmosphere for thousands of year. Developed nations, including the U.S. and UK, have emitted large amounts of CO2 since the Industrial Revolution. As a result, they may feel a responsibility to reduce the CO2 they historically produced.
Additionally, there's a strong awareness that CDR could generate substantial future opportunities. To stoke this initiative, the U.S. government introduced the 45Q tax credit under the Inflation Reduction Act (IRA), which offers up to $180 per ton of captured CO2. The U.S. Department of Energy has also committed billions of dollars to develop regional DAC hubs, supporting both technology demonstration and supply chain formation.
The Bay Area is particularly active in supporting an environment for such startup investments, while states like Texas offer abundant sources of renewable energy and greater site flexibility. These factors make them valuable not only for energy security but also for contributing to the enrichment of a novel industry. As such, DAC is positioned as a strategic national initiative in the United States.
Taro Tanaka
Senior Investment Manager, Green Innovation Dept., Energy Solutions Business Unit
Started his career at PwC Boston in 1998. He later worked at KPMG FAS Japan, Morgan Stanley Capital, PwC Deals Japan, and Deloitte Tohmatsu Financial Advisory, and has specialized in cross-border M&A advisory throughout his career. He joined Mitsui in 2022.
The Main DAC Technologies and Heirloom's Low-Cost, Efficient CO2 Removal Method
— To understand why Mitsui invested in Heirloom, can you explain the main types of DAC technology? Also, many people confuse DAC with PSCC (Point Source Carbon Capture), so could you clarify that as well?
Aoki: Broadly speaking, CO2 capture technologies fall into two categories: CDR and PSCC. PSCC captures CO2 at the point of emission—such as from a factory smokestack—before it enters the atmosphere. It's essentially about reducing emissions.
CDR, on the other hand, captures CO2 already in the atmosphere. It doesn't “reduce” emissions; it removes them—resulting in negative emissions. CDR is essential for addressing unavoidable future emissions and removing past emissions. DAC falls under this category.
DAC technologies are also categorized by the method used to capture CO2. The main types include:
Types 1 and 2 involve using large fans to blow air over membranes coated with amine-based sorbents that capture CO2. Type 3 uses humidity changes, and Type 4 uses electrochemical processes—Types 3 and 4 are still largely in the lab phase.
Type 5, the Alkali loop method, is what Heirloom uses—it captures CO2 using alkaline substances.
— Why is Heirloom, which uses the Alkaline loop method, the leading company in the DAC industry?
Tanaka: What makes Heirloom stand out is the simplicity in the method it uses to capture CO2.
Heirloom uses limestone, a cheap and abundant material, as a sorbent. The CO2 separation process is also extremely simple and efficient, making it readily scalable compared to competitors.
— Can you walk us through Heirloom's CO2 capture process?
Tanaka: First, limestone (CaCO3) is finely crushed and loaded onto trays, then heated in a renewable-powered electric kiln, separating the limestone into calcium oxide (CaO) powder and CO2. The CO2 is then either sequestered underground (CCS) or used as input materials such as to make concrete (CCU).
Once out of the kiln, the powdered CaO is recycled and is loaded back onto trays and hydrated with water, which turns the CaO into calcium hydroxide (Ca(OH)2), or slaked lime. Ca(OH)2 has excellent CO2 absorption properties. Once the CO2 gets absorbed, it is placed in the kiln to strip out the CO2, thus creating an Alkaline loop. The limestone can be used almost indefinitely. While this natural process usually takes 6–12 months, Heirloom accelerated this process to 2-3 days by optimizing the temperature, humidity and airflow of their facility. That's the core of their innovation.
— So, to reduce costs, it's just a matter of scaling up the plant?
Tanaka: Yes. Heirloom, a startup founded in 2020, already began operating its first commercial DAC facility in the U.S. in Tracy, California, in November 2023, with a CO2 capture capacity of 1,000 tons per year. They are now planning to build a much larger DAC facility in northwest Louisiana.
First commercial DAC facility in the U.S. (Tracy, CA)
DAC facility under construction in northwest Louisiana (expected to be operational in 2026)
Heirloom's Reliability and Investor Enthusiasm
— Why is Heirloom growing so rapidly?
Tanaka: As mentioned, limestone is abundant and inexpensive, and their process is simple and efficient. While other companies are still in the research phase, Heirloom has already de-risked its technology and is already capturing and permanently storing CO2. Their management team includes experienced professionals, such as CEO Shashank Samala, a serial entrepreneur who understands the path to success.
Aoki: Additionally, carbon credits generated from Heirloom's DAC have already been purchased by major companies like Microsoft. This has attracted significant investor interest, with participation from funds like Breakthrough Energy, founded by Bill Gates, and Japanese companies such as Mitsubishi Corporation, Mitsui O.S.K. Lines, and Japan Airlines.
Furthermore, they receive U.S. government subsidies, enhancing their credibility as a leading company in the field.
— Mitsui & Co. is among the investors. Why did you choose to invest in Heirloom?
Aoki: Because Heirloom is a leading player in the DAC field. That said, many other companies around the world are developing diverse DAC technologies, including small-scale and decentralized solutions. Our strategy is to build a portfolio by combining these various technologies.
By investing in a diverse portfolio, we aim to stay on top of the latest developments, contribute to rule-making, and build strong relationships with related companies. Ultimately, we hope to connect these efforts to future businesses, such as synthetic fuel production. We view our investment in Heirloom as just the first step in our broader DAC business strategy.
— By synthetic fuel, you mean combining the CO2 captured in Heirloom's process with hydrogen to create e-fuel?
Tanaka: Yes, utilizing captured CO2 for synthetic fuel is a key part of our mid- to long-term strategy. We are also exploring options such as DACCS (Direct Air Capture with Carbon Storage) and offtake agreements, where we purchase carbon credits for resale.
— When do you expect the DAC business, not just Heirloom, to become profitable?
Aoki: Various companies have different projections, but we anticipate that by the late 2030s, multiple plants will be operational and generating profits.
— Are there specific requirements for constructing Heirloom's plants?
Tanaka: Operating the kilns requires a substantial amount of renewable energy. However, beginning with the next plant, they plan to stack trays containing calcium oxide (CaO) vertically, higher thus reducing the need for large amounts of space. Currently, they build in locations with optimal temperature and humidity, minimizing the need for strict environmental controls.
Aoki: Another notable feature is the minimal human presence in their plants. Robots handle tasks like moving trays and spraying water, making the process highly automated.
— Given not only the challenges of temperature and humidity control, but also the need for affordable and abundant renewable energy, building such plants in Japan appears to be a difficult task.
Aoki: That's true. However, even with maximum efforts to reduce CO2 emissions, Japan is projected to have residual emissions of 50 to 240 million tons annually. Therefore, the Ministry of Economy, Trade and Industry is promoting the development of DAC technology and systems to evaluate and create demand for the value of captured CO2.
A realistic approach might be to participate in DAC projects in countries with cheaper renewable energy and transfer the value of the captured CO2 to Japan.
— Lastly, what is your dream that you would like to achieve through this business?
Tanaka: Achieving carbon neutrality by 2050 requires DAC technology. We hope more people and companies will join this field, and that we can contribute to building a sustainable planet.
Aoki: When I talk about CDR and DAC, I sometimes hear people say, 'If we can capture CO2, then it's okay to emit it' — but that's a major misconception. Even with our best efforts to reduce emissions, there will still be an estimated 2 to 10 billion tons of residual CO2 and other greenhouse gases released globally each year. DAC is a solution designed to address that challenge.
The key question now is: how can we implement this technology — which also enables the use of recovered CO2 as a raw material or resource — into society at scale? I'm proud to be part of a team tackling this difficult question. My dream is to help create a sustainable future through this technology.
