Direct air capture portfolio analysis: technology allocation and modular deployment strategies under demand and cost uncertainty

Meeting national or corporate net zero targets requires addressing residual emissions that persist after wide-scale electrification, efficiency increases and point-source carbon capture. Direct air capture (DAC) has emerged as a leading option, offering permanent, verifiable removals at gigaton scale, with cost projections ranging from $100 to more than $1000/tCO 2 . DAC comprises two competing technologies: liquid solvent systems benefiting from economies of scale, and solid sorbent systems offering modular deployment and cost reduction through economies of large numbers. This creates a strategic dilemma for CDR investors: concentrate on a single technology or diversify to hedge technology-specific risks? We address this with two-stage stochastic MILP optimising DAC portfolio allocation strategies under demand and cost uncertainty, optimising facility deployment, energy sourcing and expansion decisions for fixed and flexible facility designs across four regions (US, UK, Australia, Brazil) and three demand scenarios (0.5–2.5 Mtpa, 0.1–0.3 Mtpa, 10–100 ktpa) with sample average approximation. Three findings emerge. (1) Under fixed allocation shares, pure-technology portfolios outperform diversified ones: pure liquid solvent achieves $204–490/tCO 2 versus $636–1451/tCO 2 for pure solid sorbent. Diversification paradoxically increases costs because fixed shares force deployment of expensive technology even when cheaper alternatives could meet demand alone. (2) Except for UK, liquid solvent preference reverses only below 100 ktpa, where solid sorbent learning rates (18%) dominate, though realising these benefits requires coordinated procurement beyond any single country's capacity. (3) Flexible deployment reduces mean levelised costs by 16–45% through demand-responsive capacity addition. Findings offer direct guidance for DAC investors: prioritise pure-technology strategies under fixed-share constraints, select liquid solvent for megaton-scale deployment, and implement modular phasing regardless of technology choice.