Last Chance Technology

Meeting the 1.5°C target is no longer just a global climate commitment – it is increasingly becoming a benchmark for corporate responsibility and competitiveness. Yet the reality is sobering: current emissions trends are steering us toward a temperature rise of over 2°C. According to the Intergovernmental Panel on Climate Change (IPCC), we have only around 250 gigatons of CO₂ left in our carbon budget to have a 50 percent chance of staying within the 1.5°C limit. The time for symbolic climate strategies is long gone.¹ 

In theory, Net Zero sounds simple: avoid emissions, reduce what you can, and offset the rest. In practice, however, companies are hitting the limits of traditional decarbonization – especially when it comes to Scope 3 emissions from product use, disposal, or in high-emission industries. This is where climate technologies come in: they are not optional but a critical component of any future-proof climate strategy.² The Science Based Targets initiative (SBTi) underscores this paradigm shift: in the new Net-Zero Standard Version 2.0, carbon dioxide removal (CDR) technologies are no longer seen merely as a “last resort,” but are recognized as an integral part of strategic climate pathways – with clear, short-term targets.

For companies, this means: without advanced climate technologies, Net Zero goals are out of reach. Even with maximum efficiency and a full switch to renewables, unavoidable residual emissions remain – especially in hard-to-abate sectors like chemicals, pharma, construction, or aviation. These gaps must be closed by CDR technologies. A common misconception is that carbon removal is the same as traditional offsetting. But only technologies that physically extract CO₂ from the atmosphere make a lasting contribution to climate protection. “Avoidance” certificates are not sufficient for achieving Net Zero. Companies that take their climate goals seriously must invest early in genuine carbon removal.

Climate technologies to offset residual emissions

Carbon Dioxide Removal (CDR) spans a wide range of approaches – from nature-based solutions like reforestation, and wetland restoration, to ocean-based methods such as Direct Ocean Capture, and high-tech solutions like Direct Air Capture (DAC), Carbon Capture, Utilization and Storage (CCUS), or Bioenergy with Carbon Capture and Storage (BECCS). For executives such as Chief Sustainability Officers (CSOs) and Chief Operations Officers (COOs), this means not only managing the transformation but also building a robust, technology-driven decarbonization portfolio.

The challenges for companies are multifaceted – high investment costs, technological uncertainties, and regulatory complexity. Yet the market is evolving rapidly: the European DAC market is expected to exceed USD 600 million by 2030, with an annual growth rate of over 60 percent.³ At the same time, the EU’s Net Zero Industry Act (NZIA) is creating clear regulatory frameworks: by 2030, at least 40 percent of Europe’s demand for strategic climate technologies – including DAC, green hydrogen, energy storage, and solar and wind technologies – is to be met by domestic production.⁴ 

Studies such as the IPCC AR6 Report⁵ and the IEA Net Zero Roadmap make it clear: without annual CO₂ removal of around 10 gigatons by 2050, the 1.5°C – and even the 2.0°C – targets will be out of reach.^{6; 7; 8} Currently, global CDR capacity stands at only about 2 billion tons – with just 0.1 percent of that achieved through technological means. Scaling up is not just necessary – it’s long overdue.^{9; 10}

Climate technologies: industry fit determines impact and profitability

Not every technology suits every business model – and not every industry benefits equally. The use of climate technologies must therefore be strategic and tailored. Hard-to-abate sectors in particular – such as construction (especially steel and cement production), the chemical and pharmaceutical industries, and aviation – stand to benefit significantly from carbon removal technologies. These industries are characterized by energy-intensive processes and process-related emissions – for example, in the production of basic chemicals, the use of fossil fuels in blast furnaces, or climate control in cleanrooms.

The aviation sector, for instance, is already turning to Sustainable Aviation Fuels (SAF), which are considered part of the climate tech portfolio. Other companies have also taken action – and secured strategic advantages in doing so. Microsoft invests millions annually in CDR technologies and has committed to becoming carbon negative by 2030.¹¹ German construction materials company Heidelberg Materials is building the first large-scale cement plant with Carbon Capture and Storage (CCS) technology in Norway.¹² The UK-based Drax Group is relying on BECCS to become a carbon negative company by 2030.^{13; 14} As first movers, these companies gain advantages: early investors benefit from technological leadership, economic resilience and early access to emerging markets.

Leading companies today combine a range of measures: energy efficiency, electrification, circular economy practices, sustainable supply chains, and increasingly, pilot projects with CDR technologies. Yet many strategies remain vague – often due to uncertainty about technological maturity, regulatory recognition, or economic scalability. There is no one-size-fits-all solution. What matters is whether a technology aligns with the company’s decarbonization strategy, whether it is economically viable (€/tCO₂), and whether it is recognized by regulators.

Successfully integrating climate technologies into corporate strategies requires a systematic approach. The starting point is a precise greenhouse gas inventory at the company or product level, supplemented by robust climate scenarios. This should be followed by identifying the target gap – showing how much can be reduced through conventional measures and how much CDR is needed. Key questions include:

• Effectiveness – Which technologies offer the best cost-benefit ratio (e.g. €/tCO₂)?
• Technological maturity – Which solutions are already scalable and market-ready?
• Investment volume – What level of funding is required?
• Regulatory feasibility – What legal frameworks affect implementation?

Based on this, companies can make informed make-or-buy decisions – whether to invest in their own CDR capabilities or purchase capacity from specialized providers. A diversified strategy – combining nature-based and technological approaches – can help minimize risks and secure targets.

The right technology for each industry

Climate technologies vary significantly in terms of maturity, cost structure, and application. While nature-based methods are already widely implemented, many technological solutions are still in early stages – and come with high costs. Companies are closely monitoring these developments but often remain hesitant. The following table outlines which methods are particularly promising for specific industries.

The table illustrates that CDR methods vary significantly by industry. While nature-based solutions are particularly effective in agriculture and forestry or for short-term offsetting goals, technological and synthetic approaches are gaining importance – especially in hard-to-decarbonize sectors such as cement and steel production, as well as aviation and shipping. In these industries, where process-related emissions are difficult to avoid, carbon removal solutions like Direct Air Capture, BECCS, or eFuels will become indispensable in the medium term – even though they are currently still associated with high costs. However, with increasing scale and technological progress, a significant reduction in costs is expected. For example, the projected cost of sustainable aviation fuels (SAF) from non-fossil sources is expected to fall to €500–1,000 per ton of CO₂ by 2040.

Climate technologies: from climate target to growth market

Climate technologies are not only key to achieving Net Zero goals – they also represent a rapidly growing business sector. According to forecasts, the global market is expected to grow from around USD 25 billion in 2024 to approximately USD 150 billion by 2032 – a sixfold increase, with an annual growth rate of nearly 25 percent. This presents companies with a dual opportunity: climate protection and economic value creation.¹⁵ The integration of carbon removal technologies (CDR) offers far more than just emissions reduction. It opens up new entrepreneurial opportunities:

1. Future investments and innovation leadership
   Through strategic capital allocation in CDR technologies and startups, companies gain early access to innovations and open up new business areas with long-term potential.
2. Scaling through collaboration and ecosystems
   Partnerships with research institutions, technology providers, and industry players strengthen market positioning, accelerate scaling, and enhance visibility and credibility in climate action.
3. Economic benefits through cost and risk optimization
   In-house CDR initiatives help reduce CO₂ costs and regulatory uncertainties, while also unlocking new revenue streams – for example, through carbon certificates or the material use of captured CO₂.

Building climate-relevant technologies, however, requires significant investment. Depending on the technology and application, the cost per ton of CO₂ avoided at industrial scale ranges from approximately €100 to €1,000. In early project phases, costs are typically higher – but economies of scale have a strong effect. A comprehensive business case analysis by Porsche Consulting shows that investments in proprietary Direct Air Capture (DAC) facilities can be economically viable with appropriate scaling. In an initial expansion phase, a capacity of around 4,000 to 6,000 tons of CO₂ per year is planned – requiring investments of over €25 million. In subsequent phases, capacities of around 90,000 to 110,000 tCO₂ annually, and eventually up to 1 million tCO₂ per year, are targeted. The estimated investment required for this is around €100 million and approximately €650 million, respectively.

The main cost drivers include research and development, hardware, distribution, and operations. Profitability is no longer determined solely by abatement costs, but increasingly by new revenue models: on the one hand, through the trade of high-value CO₂ certificates, and on the other, through carbon capture and utilization (CCU) – the use of captured CO₂ as a raw material, for example in synthetic fuels or materials. Technologies like DAC could therefore not only help companies meet their own climate targets but also be offered to external partners and developed into standalone business units.

The EU is actively supporting investments in climate technologies through the Net Zero Industry Act (NZIA). Companies benefit from grants for CO₂ capture and storage (CCUS), direct funding for hydrogen projects, and tax incentives for sustainable production processes. These programs reduce investment risks, accelerate scaling, and strengthen the competitiveness of European companies in the global climate tech race.