BlackRock, the multi-national investment company, is about to invest over half a billion dollars into the world’s largest direct air capture (DAC) scheme.
According to the Financial Times, the New York based organisation is channelling $550 million into a joint venture project, currently being developed by the US energy giants, Occidental Petroleum.
The project, named Stratos and located in Texas, is targeting the capture of 500,000 tonnes of carbon emissions from the atmosphere each year. Commercial operations are due to start in 2025.
BlackRock’s backing is an indication “of growing investor confidence in the nascent technology,” said the FT.
“This joint venture demonstrates that direct air capture is becoming an investable technology and BlackRock’s commitment in Stratos underscores its importance and potential for the world,” said Vicki Hollub, Occidental’s Chief Executive. The company, in whom Warren Buffett’s Berkshire Hathaway is the largest shareholder, believe that carbon management will play “a significant role” in future decarbonisation.
Earlier this year, Occidental received a share of $1.2 billion from the US Department of Energy for another DAC development they are implementing. The award was an indication of the Biden administration’s commitment to decarbonising the economy, the FT noted.
The “important and growing role” of DAC
The purpose of DAC is to extract CO₂ emissions out of the atmosphere, helping prevent further global warming. The retrieved gas is then buried underground or, alternatively, recycled for productive use in building materials, fuels or agricultural products.
DAC technology has won approval from the International Energy Agency, who have advised that it will play “an important and growing role” in helping the world reach its net zero goals. However, a number of environmentalists are concerned that the technology hasn’t yet been proven at scale and will only hinder the transition towards alternative and cleaner energies.
BlackRock plans to raise a total of $8bn for investments in climate related projects “including those that help brown industries become greener.” The organisation has made no secret of its ambition to make significant returns from projects such as Stratos, which “represents an incredible investment opportunity for BlackRock’s clients,” according to the company’s chief executive, Larry Fink.
“Occidental’s technical expertise brings unprecedented scale to this cutting-edge decarbonisation technology,” he declared, adding that American energy companies had a critical role to play in climate technology innovation.
Meanwhile, climate activists have countered Mr Fink’s bullish remarks. According to the FT, they are “angry that BlackRock voted against most climate-related shareholder resolutions this year, saying the proposals were overly prescriptive.”
BlackRock set to invest $550mn in Occidental direct air capture project (ft.com)
