Amazon [AMZN:US] has entered into a ten-year agreement with Occidental’s [OXY:US] carbon capture platform, 1PointFive, to purchase 250,000 tons of carbon dioxide removal (CDR) credits, as reported by Bloomberg on August 12. This marks Amazon’s initial investment in Direct Air Capture (DAC) technology, which is designed to extract carbon dioxide (CO2) from the atmosphere. These CDR credits will be generated by 1PointFive’s Texas-based DAC plant, known as STRATOS, which is expected to become the world’s largest of its kind upon its anticipated operational commencement in 2025. Additionally, Amazon has disclosed investments in CarbonCapture, a company focused on the development of DAC systems, through which it will receive up to 100,000 tons of carbon credits.

As part of its commitment to achieving net-zero emissions by 2040, primarily driven by operational changes such as the use of renewable energy and the electrification of its delivery fleet, Amazon has turned to purchasing CDRs produced by DAC projects to offset greenhouse gas emissions that it cannot entirely eliminate. This recent agreement represents one of the largest orders in the DAC sector. In September, Microsoft [MSFT:US] also announced that it would purchase 315,000 tons of CDR credits from a DAC hub in Louisiana. Notably, the US Department of Energy (DOE) have awarded up to USD1.2bn in federal grants to support the development of the two aforementioned DAC hubs in Texas and Louisiana, with the goal of advancing the commercialization of this technology and reducing associated costs.

Sources:

https://www.bloomberg.com/news/articles/2023-09-12/amazon-invests-in-oxy-s-west-texas-carbon-removal-plant-in-net-zero-bid#xj4y7vzkg

https://www.esgtoday.com/amazon-announces-one-of-the-largest-ever-dac-carbon-removal-purchases/hhhj

https://www.theverge.com/2023/9/12/23869817/amazon-climate-carbon-removal-purchase-occidental-petroleum?ref=upstract.com