TD Bank has agreed to buy 27,500 metric tons of direct-air-capture carbon dioxide removal credits from Occidental Petroleum’s upcoming Texas plant over four years, the companies announced Tuesday.
Occidental’s carbon capture, utilization and sequestration subsidiary 1PointFive is building its DAC plant, Stratos, to be commercially operational mid-2025. Stratos will use large fans to suck carbon dioxide out of the air and funnel it down wells into geological formations for long-term storage.
Stratos will have the ability to capture and remove up to 500,000 metric tons of carbon dioxide from the atmosphere each year, according to Occidental, which institutions like TD can purchase as a solution to address their emissions.
A U.S. Department of Energy report last year said that removing carbon dioxide from the atmosphere and storing it to create negative emissions can “reduce the amount of time we spend above global warming of 1.5 °C and limit the resulting climate harm to vulnerable communities.”
“As the need to move from climate commitments to action intensifies, corporations across all sectors are looking for tangible ways to achieve their net zero goals,” said TD Securities Global Head of ESG Solutions Amy West in a prepared statement. “We're incredibly proud to partner with 1PointFive to support innovative, technology-based solutions that are intended to advance both our clients' and our own decarbonization goals.”
Financial details of the transaction were not disclosed. With it, TD Securities said it expects to add to its list of voluntary carbon offsets as it builds out its carbon advisory and trading capabilities in the voluntary and compliance carbon markets.
"The transition to a low-carbon economy is complex, and relies on transformative action across sectors and economies, including the adoption of new technologies," said TD Senior Vice President of Sustainability and Corporate Citizenship Janice Farrell Jones in a prepared statement.
"Direct Air Capture holds enormous promise as a tool to drive progress on this journey and we are proud to play a role, helping to scale innovation and support this growing business opportunity," she said.
Earlier this year, JPMorgan Chase made its own bet on carbon dioxide removal. The bank signed on to three agreements that, all in, aim to result in 800,000 tons of carbon dioxide removal and storage over 15 years.
