Occidental Petroleum is getting closer to launching its first large-scale direct air capture (DAC) hub, Stratos, in Ector County, Texas. This marks an important step in the company’s efforts to manage carbon emissions. The Stratos facility is expected to begin full operations by the end of 2025. It aims to remove up to 500,000 tonnes of carbon dioxide (CO₂) from the atmosphere each year. The project is already partially operational, with two capture trains in the process of wet commissioning through water circulation.

The facility is a key part of Occidental’s plan to tackle climate change by using industrial-scale carbon removal. DAC technology extracts CO₂ directly from the atmosphere, allowing for storage underground or use in various industrial applications. CEO Vicky Hollub stated that the Stratos hub is a significant milestone in integrating DAC into both storage and utilization pathways. This aligns with the broader U.S. energy policy, especially after the One Big Beautiful Bill Act, which kept the 45Q tax incentive for carbon capture and sequestration. Hollub noted that the new policy framework creates a balanced environment between storing captured CO₂ and using it in enhanced oil recovery (EOR) and other processes. “Both can and likely will play an important role across global energy supply chains and carbon management,” she said during the company’s quarterly earnings call.

Stratos has already made significant sales of carbon dioxide removal (CDR) credits. JP Morgan has purchased 50,000 tonnes of removal credits, while Palo Alto Networks has bought 10,000 tonnes. These agreements indicate a growing corporate demand for reliable carbon removal solutions as companies work to meet their climate goals. By securing credit sales before full operations begin, Occidental is also building trust among potential customers regarding the scalability and reliability of its DAC projects.

In addition to Stratos, Occidental is expanding its DAC efforts with a second planned facility in South Texas. This project is in partnership with XRG, the investment division of the Abu Dhabi National Oil Company (Adnoc). The U.S. Department of Energy (DOE) is providing support for the South Texas facility with a grant of up to $650 million, while XRG is contributing more than $500 million. These investments aim to speed up the commercial use of DAC technology and strengthen the U.S. position in global carbon management. The project is moving toward a final investment decision, with the company focusing on pre-sales of carbon credits to reduce risks during the development phase and gain early market traction.

Occidental’s DAC investments show a broader shift in the energy sector toward technologies that actively remove greenhouse gases, alongside measures to cut emissions. While deploying renewable energy and improving efficiency remain key parts of decarbonization strategies, many climate scientists and policymakers agree that large-scale carbon removal will be vital for achieving the goals of the Paris Agreement, especially in sectors like aviation, shipping, and heavy industry that are hard to decarbonize.

Stratos is set to serve as a model for future DAC hubs, merging effective capture technology with strong commercial partnerships. Its operations will support both voluntary carbon markets and compliance-based systems as more governments consider adding removal credits to regulatory frameworks. For Occidental, the ability to provide high-volume, verifiable CDR at stable costs may open new revenue opportunities while aiding global net-zero goals.

The company’s progress highlights the need for collaboration between public and private sectors in scaling climate technologies. Federal incentives like the 45Q tax credit and DOE grants help lower financial barriers, while corporate pre-purchase agreements offer market validation and long-term revenue potential. By connecting policy support with market demand, projects like Stratos and the planned South Texas DAC facility seek to boost the commercialization of direct air capture, positioning it as an essential tool for global decarbonization.

As commissioning work continues and credit sales grow, Occidental’s DAC initiatives are set to impact carbon removal efforts both in the United States and abroad. With Stratos expected to be operational within the next year and a half and the South Texas project nearing final approval, the company is positioning itself as a leader in developing technologies that actively reduce and reverse atmospheric carbon buildup. This contribution may reshape the economics of climate action and provide new routes for industries to meet their net-zero commitments.