JPMorgan Chase & Co. has pledged $200 million to extract carbon from the air. That includes a $20 million purchase from Swiss startup Climeworks for moving services, one of the largest corporate deals of its kind, JPMorgan announced Tuesday.
Founded in 2009, Climeworks is one of the first companies to pursue direct air capture, a technology that aims to remove carbon dioxide from the atmosphere and store it permanently. The company opened its first factory in Iceland in 2021, completed its first move this year and is currently building its second factory in Iceland.
Although this is a relatively small investment from JPMorgan, the cash injection will help Climeworks expand its services. First-time corporate buyers help Climeworks reduce the financial risk of project development and find additional buyers, the company said in a statement. A spokesperson for the startup did not provide details on when it would begin moves for the bank.
In addition to Climeworks, JPMorgan also purchased 28,500 tonnes of removal services over five years from Charm Industrial, a California startup that uses bio-oil to store carbon, and signed a memorandum of understanding with CO280 Solutions. to extract up to 450,000 tonnes. of CO2 from the atmosphere over 15 years. The bank would not disclose the value of these transactions. Scientists estimate that the world may need to remove billions of tons of CO2 from the atmosphere each year by mid-century to limit global warming.
Direct air capture startups still have a number of hurdles to overcome before they can play a meaningful role in removing planet-warming pollution from the atmosphere. Chief among them is the high price buyers currently have to pay for their services. Buying Climeworks averages around $800 per ton of removal, while most experts consider $100 per ton to be a goal for DAC – or any other form of carbon removal – as being economically viable. DAC is also energy-intensive and could compete with other industries for clean electricity.
These aren’t JPMorgan’s first investments in phasing out carbon. The financial services company also recently joined Frontier, a public benefit company run by payments company Stripe that pools funding from large corporate buyers to kick-start the carbon removal industry. In its Tuesday announcement, the bank said it was committing $75 million to Frontier, including $50 million for its own operational emissions and $25 million to help clients meet their own climate goals. In total, JPMorgan said its investments will cover 800,000 tonnes of carbon removal services and enable the bank to match every tonne of its relentless direct operational emissions by 2030.
“To complement our operational emissions reduction efforts, we are working with companies like Climeworks to address our relentless emissions today and, most importantly, to support the development of the scalable solutions the world needs to reach net zero emissions. by 2050,” Brian DiMarino, JPMorgan’s chief operating sustainability officer, said in a statement.
The bank is part of an alliance of banks pledging to reach net zero by 2050 and has recently made substantial investments in renewable energy, according to analysis by BloombergNEF. Yet the amount the bank will spend on the carbon phase-out deal is dwarfed by the amount it has used to finance fossil fuel projects. Between 2016 and 2022, JPMorgan spent more than $430 billion lending and underwriting to the fossil fuel sector, according to an annual bank monitoring report compiled by an NGO group led by the Rainforest Action Network. The report found that made the bank the world’s largest fossil fuel funder during that period, although JPMorgan’s loans to fossil fuel companies fell 42% last year.
(Corrects name of organization that authored report in last paragraph. A previous version of the story updated the headline and first paragraph to clarify that JPMorgan is pledging $200 million to extract carbon from the ‘air, $20 million of which will go to Climeworks.)
