This company says its technology can help save the world. It's now cutting 20% of its staff as Trump slashes climate funding

CNN

30-05-2025

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Two huge plants in Iceland operate like giant vacuum cleaners, sucking in air and stripping out planet-heating carbon pollution. This much-hyped climate technology is called direct air capture, and the company behind these plants, Switzerland-based Climeworks, is perhaps its most high-profile proponent.
But a year after opening a huge new facility, Climeworks is straining against strong headwinds. The company announced this month it would lay off around 20% of its workforce, blaming economic uncertainties and shifting climate policy priorities.
'We've always known this journey would be demanding. Today, we find ourselves navigating a challenging time,' Climeworks' CEOs Christoph Gebald and Jan Wurzbacher said in a statement.
This is particularly true of its US ambitions. A new direct air capture plant planned for Louisiana, which received $50 million in funding from the Biden administration, hangs in the balance as President Donald Trump slashes climate funding.
Climeworks also faces mounting criticism for operating at only a fraction of its maximum capacity, and for failing to remove more climate pollution than it emits.
The company says these are teething pains inherent in setting up a new industry from scratch and that it has entered a new phase of global scale up. 'The overall trajectory will be positive as we continue to define the technology,' said a Climeworks spokesperson.
For critics, however, these headwinds are evidence direct air capture is an expensive, shiny distraction from effective climate action.
Climeworks, which launched in 2009, is among around 140 direct air capture companies globally, but is one of the most high-profile and best funded.
In 2021, it opened its Orca plant in Iceland, followed in 2024 by a second called Mammoth. These facilities suck in air and extract carbon using chemicals in a process powered by clean, geothermal energy.
The carbon can then be reused or injected deep underground where it will be naturally transformed into stone, locking it up permanently. Climeworks makes its money by selling credits to companies to offset their own climate pollution.
The appeal of direct air capture is clear; to keep global warming from rising to even more catastrophic levels means drastically cutting back on planet-heating fossil fuels. But many scientists say the world will also need to remove some of the carbon pollution already in the atmosphere. This can be done naturally, for example through tree planting, or with technology like direct air capture.
The advantage of direct air capture is that carbon is removed from the air immediately and 'can be measured directly and accurately,' said Howard Herzog, senior research engineer at the MIT Energy Initiative.
But there are big challenges, he told CNN. The concentration of carbon dioxide in the atmosphere has been shooting upward, but still only makes up about 0.04%. Herzog compares removing carbon directly from the air to needing to find 10 red marbles in a jar of 25,000 marbles of which 24,990 are blue.
This makes the process energy-intensive and expensive. The technology also takes time to scale.
Climeworks hasn't come anywhere close to the full capacity of its plants. Orca can remove a maximum of 4,000 tons of carbon a year, but it has never captured more than 1,700 tons in a year since it opened in 2021. The company says single months have seen a capture rate much closer to the maximum.
The company's Mammoth plant has a maximum capacity of 36,000 tons a year but since it opened last year it has removed a total of 805 tons, a figure which goes down to 121 tons when taking into account the carbon produced building and running the plants.
'It's true that both plants are not yet operating at the capacity we originally targeted,' said the Climeworks spokesperson. 'Like all transformative innovations, progress is iterative, and some steps may take longer than anticipated,' they said.
The company's prospective third plant in Louisiana aims to remove 1 million tons of carbon a year by 2030, but it's uncertain whether construction will proceed under the Trump administration.
A Department of Energy spokesperson said a department-wide review was underway 'to ensure all activities follow the law, comply with applicable court orders and align with the Trump administration's priorities.' The government has a mandate 'to unleash 'American Energy Dominance',' they added.
Direct air capture's success will also depend on companies' willingness to buy carbon credits.
Currently companies are pretty free to 'use the atmosphere as a waste dump,' said Holly Buck, assistant professor of environment and sustainability at the University at Buffalo. 'This lack of regulation means there is not yet a strong business case for cleaning this waste up,' she told CNN.
Another criticism leveled at Climeworks is its failure to offset its own climate pollution. The carbon produced by its corporate activities, such as office space and travel, outweighs the carbon removed by its plants.
The company says its plants already remove more carbon than they produce and corporate emissions 'will become irrelevant as the size of our plants scales up.'
Some, however, believe the challenges Climeworks face tell a broader story about direct air capture.
This should be a 'wake-up call,' said Lili Fuhr, director of the fossil economy program at the Center for International Environmental Law. Climeworks' problems are not 'outliers,' she told CNN, 'but reflect persistent technical and economic hurdles faced by the direct air capture industry worldwide.'
'The climate crisis demands real action, not speculative tech that overpromises and underdelivers.' she added.
Some of the Climeworks' problems are 'related to normal first-of-a-kind scaling challenges with emerging complex engineering projects,' Buck said.
But the technology has a steep path to becoming cheaper and more efficient, especially with US slashing funding for climate policies, she added. 'This kind of policy instability and backtracking on contracts will be terrible for a range of technologies and innovations, not just direct air capture.'
Direct air capture is definitely feasible but its hard, said MIT's Buck. Whether it succeeds will depend on a slew of factors including technological improvements and creating markets for carbon removals, he said.
'At this point in time, no one really knows how large a role direct air capture will play in the future.'