CO2 removal startup lands Boeing deal

Breaking: Equatic, a UCLA spin-out pairing carbon dioxide removal using seawater and hydrogen production, just unveiled a major deal with Boeing.

Why it matters: While the deal is preliminary and contingent upon Equatic's ability to scale its tech, it's large for the nascent carbon removal market.

🗞️Driving the news: The "pre-purchase option agreement" is for 62,000 metric tons of CO2 removal, and 2,100 metric tons of "carbon-negative" hydrogen that Boeing sees as feedstock for cleaner jet fuel.

• It covers a roughly five-year period that starts mid-decade, a spokesperson said.
• Equatic is also divulging more details about its structure and plans.
• John Browne, the former BP CEO who's now chairman of the climate tech fund BeyondNetZero, is heading Equatic's advisory board.

Reality check: Volumes in recent industry deals are growing. But they're still tiny compared with the global scale envisioned to make removal a meaningful tool in future decades, which involves handling multibillions of tons a year.

• That's hardly a sure thing, and for now, the priority is scaling and driving down costs.

How it works: Equatic's tech passes electrical current, obtained via renewables, through seawater — a process called electrolysis that splits water into hydrogen and oxygen.

• They then pass atmospheric air through the processed seawater. "These steps trap CO2 in solid minerals and as dissolved substances that are naturally found in the oceans," the company said.

🧮The big picture: The process enables precise accounting of how much CO2 is removed, Equatic said.

And the hydrogen can be used in heavy industry, electricity, production of transport fuels — or powering Equatic's CO2 removal plants.

🔍Zoom in: Equatic has pilot projects in L.A. and Singapore.

• It hopes to reach 100,000 metric tons of carbon removal annually by 2026, and millions by 2028 for under $100 per ton, a goal set by the Energy Department.
• Removal pledged under a far smaller deal with Stripe in 2021, when Equatic was called SeaChange and housed at UCLA, was for $1,370 per ton.

🏃🏽‍♀️Catch up fast: Equatic has raised over $30 million. Its many backers include the Chan Zuckerberg Initiative, the Anthony and Jeanne Pritzker Family Foundation and DOE.

The intrigue: Chief Operating Officer Edward Sanders told Axios that Equatic's hydrogen production will be eligible for climate law tax credits for U.S. projects.

• But separate carbon removal credits don't apply because they're only for geologic storage, not ocean-based removal, he said.
• Sanders said he hopes lawmakers will broaden the applicability but added that Equatic's business model doesn't rest on it.
• He's also confident a U.N. panel will eventually reverse its preliminary view that engineered removal should be excluded from carbon markets under the Paris Agreement.

The bottom line: Equatic's novel vision of merging direct air capture, CO2 storage in oceans and hydrogen production shows how no tech is yet dominant in the emerging removal field.