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JPMorgan pledges $200 million to suck carbon from the sky

JPMorgan Chase & Co. made a $200 million commitment to remove carbon from the air. That includes a $20 million purchase from Swiss startup Climeworks for removal services, one of the company’s largest deals of its kind, JPMorgan announced on Tuesday.

Founded in 2009, Climeworks was one of the first companies to pursue direct air capture, a technology that removes carbon dioxide from the atmosphere and stores it permanently. The company opened its first factory in Iceland in 2021, completed the decommissioning of the first this year, and is currently building a second in Iceland.

While this is a relatively small investment from JPMorgan, the cash injection will help Climeworks scale its services. In a statement, the company said early buyers help Climeworks reduce the financial risk of project development as well as ensure additional buyers. A spokesperson for the startup did not provide details on when it will begin taking down the bank.

In addition to Climeworks, JPMorgan also purchased 28,500 tons of 5-year removal services from Charm Industrial, a California-based startup that uses bio-oil for carbon storage, and signed a memorandum of understanding with CO280 Solutions to pull up to 450,000 tons of CO2 from the atmosphere over 15 years. The bank will not disclose the value of such transactions. Scientists estimate that the world may need to remove billions of tons of CO2 from the atmosphere annually by the middle of this century to limit global warming.

Direct air capture startups still have some hurdles to overcome before they play a meaningful role in removing planet-warming pollution from the atmosphere. Chief among them is the high prices that buyers currently pay for their services. The average cost of acquiring Climeworks is around $800/ton removal, while most experts see $100/ton as a target for DAC — or any other form of carbon removal — to become economically viable. economic. DAC is also energy intensive and can compete with other industries in clean electricity.

This is not the first investment JPMorgan has made in decarbonizing. The financial services company also recently joined border, a public utility led by payments company Stripe is raising capital from major corporate buyers to kickstart the carbon removal industry. In Tuesday’s announcement, the bank said it had committed $75 million to Frontier, including $50 million for its own operations. emissions and $25 million to help customers meet their own climate goals. All told, JPMorgan says its investments will include 800,000 tonnes of carbon removal services and enable the bank to tackle each of its tonnes of direct operating emissions unabated by 2030.

“To complement our operational emissions reduction efforts, we are partnering with companies like Climeworks to address our current unabated emissions and, importantly, support development.” develop the scalable solutions the world needs to achieve net-zero emissions by 2050,” Brian DiMarino, head of operational sustainability at JPMorgan, said in a statement.

The bank is part of a consortium of banks committed to net zero by 2050 and has recently made significant investments in renewable energy, according to analysis by BloombergNEF. However, the amount the bank will spend on the decarbonization agreement is not equal to the amount it used to fund fossil fuel projects. From 2016 to 2022, JPMorgan spent more than $430 billions in lending and underwriting to the fossil fuel sector, according to an annual report that tracks banks put together by a group of NGOs led by the Rainforest Action Network. The report found that made the bank the world’s largest fossil fuel funder during that time period, even though JPMorgan’s lending to fossil fuel companies fell 42 percent in last year.

(Correct name of reporting author organization in last paragraph. An earlier version of the story updated the title and first paragraph to clarify that JPMorgan committed $200 million to extract carbon from the air, which includes $20 million will go to Climeworks.)

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