BlackRock Invests $550 Million In World’s Largest DAC Carbon Capture Project

Investment giant BlackRock and energy major Occidental (OXY) announced today a new partnership which will see BlackRock invest $550 million on behalf of clients in STRATOS, set to become the world’s largest Direct Air Capture (DAC) facility, currently under construction by Oxy’s carbon capture-focused subsidiary 1PointFive.Image via ESG TodayUnder the new agreement, BlackRock (BLK), through a fund managed by its Diversified Infrastructure business, will form a joint venture with 1PointFive that will own STRATOS.DAC technology, listed by the IEA as a key carbon removal option in the transition to a net-zero energy system, extracts CO2 directly from the atmosphere for use as a raw material or permanently removed when combined with storage. According to the landmark Intergovernmental Panel on Climate Change (IPCC) climate change mitigation study released last year, scenarios that limit warming to 1.5°C include carbon dioxide removal methods scaling to billions of tons of removal annually over the coming decades, with DAC positioned to potentially account for a significant portion of the total.Most solutions that capture and store CO2 are early stage and currently limited in scale, including DAC. 1PointFive is currently constructing Stratos in Ector County Texas, which it expects to be the largest DAC facility in the world to date, designed to capture 500,000 tonnes of CO2 per year when fully operational.According to the companies, the investment will help advance construction of the facility, which is expected to be commercially operational in mid-2025. 1PointFive has already signed CO2 removal credit purchase agreements with companies including Amazon, All Nippon Airways, and TD Bank.Oxy President and CEO Vicki Hollub said:

“We are excited to partner with BlackRock on this transformative facility that will provide a solution to help the world reach net zero. This joint venture demonstrates that Direct Air Capture is becoming an investable technology and BlackRock’s commitment in STRATOS underscores its importance and potential for the world. We believe that BlackRock’s expertise across global markets and industries makes them the ideal partner to help further industrial-scale Direct Air Capture.”

According to BlackRock CEO and Chair Larry Fink, the new DAC facility “represents an incredible investment opportunity for BlackRock’s clients,” and “and underscores the critical role of American energy companies in climate technology innovation.”BlackRock has come under significant pressure over the past several months at the center of a vocal anti-ESG movement by Republican politicians in the U.S., who have accused the firm of following a social agenda, or of “boycotting” and working to harm energy companies. In an interview earlier this year, Fink addressed the claim that BlackRock boycotts energy companies, pointing out that the firm is actually one of the world’s largest hydrocarbon investors, and that the firm is actively working with major energy companies on their pathway to decarbonization.In a social media post following the announcement with Oxy, Fink said:

“As I’ve said many times, if the world hopes to achieve decarbonization, energy companies are going to need to play a central role. They have the market knowledge and technical expertise that is going to be required on a global scale. We’re proud to work with bold innovators like Vicki and the team at Oxy to support their ambitious plans.”

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