1PointFive, a subsidiary of Occidental (Oxy) focused on the Direct Air Capture (DAC) business, announced that it has signed an agreement with Microsoft to delivers 500,000 tons of carbon dioxide. Carbon dioxide reduction (CDR) credits for six years. This is the largest DAC-based CDR credit transaction ever. DAC technology, recognized by the International Energy Agency (IEA) as the most important decarbonization option in a net-zero energy system, extracts carbon dioxide directly from the atmosphere. This CO2 can be used as a raw material or stored permanently.
The Intergovernmental Panel on Climate Change (IPCC) indicates that limiting global warming to 1.5 degrees will require increasing carbon removal methods to the tune of billions of tons per year, and the DAC is expected to have a major impact. Most carbon capture and storage solutions are at an early stage and of limited scale, including DAC. 1PointFive is building the STRATOS facility in Ector County, Texas, which is expected to be the largest DAC facility in the world, sequestering 500,000 tons of carbon dioxide per year when fully operational. STRATOS is expected to be commercially operational by mid-2025.
STRATOS allows CDR credits under an agreement with Microsoft, and the captured carbon dioxide is stored with the brine and not used for oil and gas production. This agreement is part of Microsoft’s initiative to become carbon negative by 2030. Last month, Microsoft announced its largest CDR agreement with BTG Pactual Timberland Investment Group (TIG) for 8 million tons of natural carbon emissions. Microsoft’s decarbonization portfolio includes a number of solutions and technologies, such as ocean-based decarbonization, bio-carbon-based projects and other DAC agreements..