Amazon Inc. will purchase 250,000 metric tons of carbon dioxide removal (CDR) credits over 10 years from one of the world’s biggest Direct Air Capture companies 1PointFive, an Oxy subsidiary.
This is the first investment that Amazon made in DAC at this scale, though it didn’t reveal the total cost of the purchase. The quarter of a million carbon removal credits will be from 1PointFive’s first commercial-scale DAC plant, Stratos. The facility is still under construction in Texas.
Microsoft’s 1st Big Investment in CDR Credits
Investing in carbon removal credits is the retailer giant’s latest effort to offset the emissions of its massive fleet of delivery vans, trucks, and aircraft.
The Seattle-based company aims to reach net zero emissions by 2040 by making significant operational changes. Amazon focuses on shifting to electric vehicles and using renewable energy like solar power.
The purchased carbon removal credits will also be for offsetting a part of its carbon emissions that can’t be avoided.
Recently, Amazon has been investing in nature-based solutions such as reforestation and forest preservation projects worldwide. The e-commerce giant is also betting on renewable energy to bolster sustainability.
Since Amazon announced its net zero pledge in 2019, it has seen a slight decline in its footprint in 2022. There’s 0.4% drop from the previous year amid 9% net sales growth. The same goes for its carbon intensity.
The cloud giant, through its Climate Pledge Fund, is also supporting CarbonCapture Technologies, a CO2 removal company that develops DAC materials for the cement industry.
The 10-year CDR purchase agreement with Oxy marks Amazon’s first big investment in a technological carbon sequestration solution like DAC.
Stratos: The Biggest DAC Plant
The 250,000 Mt of CDR credits will be supplied by 1PointFive’s pioneering DAC plant STRATOS. The facility can absorb up to 500,000 metric tons of carbon each year once it becomes online. If that happens, it will be the biggest DAC plant on the planet essential for achieving large scale carbon removal.
Under their agreement, the captured gas underlying Amazon’s carbon removal credits will be injected in saline aquifers. These reservoirs are free of any oil and gas extraction activities of Oxy.
Kara Hurst, Amazon’s sustainability VP remarked they’re focusing on decarbonizing their global operations, while also adding that:
“These investments in direct air capture complement our emissions reductions plans and we are excited to support the growth and deployment of this technology.”
1PointFive is also aiming to pump carbon dioxide into existing oil wells to produce emissions-free crude oil, Oxy says.
Oxy’s DAC company is also partnering with another carbon removal firm Carbon Engineering in developing industrial carbon capture solutions to help businesses realize their net zero targets. This project won the U.S. Department of Energy’s $1.2 billion funding program for DAC solutions.
Other major companies have also announced intent to purchase CDR credits from 1PointFive, including Shopify, All Nippon Airways, and Airbus.
CDR Credits Advancing Carbon Capture Solutions
Amazon’s long-term CDR purchase contract represents “a significant commitment to direct air capture as a vital carbon removal solution,” 1PointFive’s President Michael Avery said.
By supporting the retail giant’s net zero journey, this investment shows the growing role that DAC plays in decarbonizing businesses.
Amazon’s announcement follows just days after Microsoft revealed its $200 million carbon removal deal with another DAC startup Heirloom. Under their agreement, Microsoft will purchase 315,000 metric tons of carbon removal from Heirloom also for a decade.
Heirloom, in partnership with Climeworks, is also one of the DOE’s selected awardee for DAC subsidy of up to $600 million.
Microsoft had signed a 10-year carbon removal deal with Climeworks to capture 10,000 Mt of CO2 from the air using DAC.
Microsoft, by far, is the biggest buyer of carbon removal credits, as per CDR.fyi data. The platform also reported that CDR credits purchases went up 437% in the first half of 2023 vs. full-year 2022.
These are some of the massive financial support announced for DAC. Yet, to date, the carbon removal industry manages to capture a few thousand tons of CO2 from the atmosphere yearly.
According to climate scientists, the world has to remove billions of tons of CO2 each year by 2050 to stay within the 1.5°C set by the Paris Agreement. This is critical to prevent the worst effects of climate change.
As corporations and governments around the world are putting their bets on CDR credits, they’re advancing carbon capture technological solutions while expanding the nascent market.
The trends are encouraging and estimates show that CDR purchases will reach 6 million tonnes by the end of 2023. If that occurs, it would be a 10x increase from the previous year.
Amazon’s groundbreaking investment in 1PointFive’s Direct Air Capture technology marks a significant step towards decarbonizing its operations. This move reflects the growing importance of carbon removal solutions in combating climate change, as major corporations continue to make substantial commitments to advance these critical technologies.
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- Source: https://carboncredits.com/amazon-enters-first-carbon-removal-credits-deal-with-1pointfive/
