Morgan Stanley strikes direct air capture deal
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Aerial view of the Mammoth carbon removal plant in Iceland. Photo: John Moore/Getty Images
Morgan Stanley is investing in direct air capture of carbon dioxide through a partnership with the Swiss firm Climeworks, the companies announced this morning.
Why it matters: The deal demonstrates growing interest on Wall Street to tap into the fledgling carbon removal industry by buying carbon removal credits.
Zoom in: Morgan Stanley's agreement, for an undisclosed sum, follows Climeworks' approximately $20 million deal with JP Morgan last year.
- The new agreement is for the removal of 40,000 tons of carbon dioxide from the atmosphere in a partnership lasting until 2037.
- Climeworks, which opened the world's largest direct air capture plant earlier this year in Iceland, will use the funding to help scale up its new technology that aims to efficiently capture more CO2 from the ambient air.
- According to the company, the contract is Climeworks' second-largest to date. The company is a main technology partner for the Energy Department's Project Cypress Direct Air Capture Hub in Louisiana.
Between the lines: Forty thousand tons of CO2 is a small number when compared to emissions from cities, states and countries, and reflects the fledgling state of direct air capture.
- For example, 40,000 tons of CO2 is equivalent to the annual emissions from about 9,000 conventionally powered cars in the U.S., according to the EPA.
- The nascent technology is aimed at addressing residual CO2 in the atmosphere, while other steps are taken to slash additional emissions.
What they're saying: "By securing access to high-quality carbon removals now, companies position themselves ahead of the curve of future regulatory changes and competitive pressures," Christoph Gebald, co-founder and co-CEO of Climeworks, said in a statement.
Editor's note: This story has been corrected by removing a reference that connected
DAC to Morgan Stanley's goals of achieving net-zero financed emissions and providing $1 trillion in sustainable finance.
