Shell and Mitsubishi Bet on Carbon Removal’s Next Phase

Shell and Mitsubishi fund Avnos’ first commercial direct air capture plant as US incentives push carbon removal from theory into practice

26 Jan 2026

Carbon removal is edging out of the laboratory. Once a fringe idea discussed at climate conferences, it is now being built, cautiously, in steel and concrete. The latest sign comes from Avnos, an American developer of direct air capture (DAC), which has secured up to $17m in project finance from Shell and Mitsubishi for its first commercial plant.

The project, known as Cedar, is modest by design. Planned for an undisclosed site in the United States, it aims to remove approximately 3,000 tonnes of carbon dioxide per year, a small amount compared to national emissions, but substantial by the standards of a technology still in its early stages of development. Avnos says the plant will also produce around 6,000 tonnes of clean water as a by-product, a feature meant to improve both economics and public appeal.

DAC works by pulling carbon dioxide directly from the air, rather than capturing it at smokestacks. That makes it attractive for dealing with emissions that are hard or impossible to eliminate, such as those from aviation or heavy industry. It also makes it expensive. For years, high costs and technical uncertainty kept most investors away.

That is changing, largely because of policy. Expanded American tax credits for carbon capture and storage have improved the maths, encouraging companies to move from pilots to early commercial projects. For investors, the appeal is less about scale today than about learning how these systems perform in the real world.

Avnos is keen to stress that point. Its chief executive, Will Kain, has described Cedar as a proving ground, aimed at demonstrating reliable, repeatable operations rather than rapid expansion. The firm says its technology uses less energy than earlier DAC designs and recovers water as part of the process. Whether those claims hold up will matter more than headline capacity.

For Shell, the investment fits with its view that emissions cuts alone will not meet climate goals. Backing an early DAC plant offers operational insight and a chance to influence standards in a market that may one day support carbon storage, fuels and management services. Mitsubishi, meanwhile, has been widening its bet on decarbonisation across energy and industry; a first-of-its-kind facility offers early exposure if demand accelerates.

Plenty of obstacles remain. DAC is still costly, and long-term demand depends on clear rules and credible markets. Yet momentum is building. As incentives take hold and small plants like Cedar come online, carbon removal is beginning to look less like an experiment and more like a business in the making.