Investment giant BlackRock and energy giant Occidental (Oxy) today announced a new partnership in which BlackRock will invest $550 million on behalf of clients in STRATOS, which will become the world’s largest Direct Air Capture (DAC) facility, currently under construction by Oxy’s CO2 Capture Facility . -focused subsidiary 1PointFive.
Under the new agreement, BlackRock, through a fund managed by its Diversified Infrastructure business, will form a joint venture with 1PointFive, which will own STRATOS.
DAC technology, identified 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 feedstock or permanently removed in combination with storage. According to the groundbreaking Intergovernmental Panel on Climate Change (IPCC) research into climate change mitigation Released last year, scenarios that limit warming to 1.5°C include carbon dioxide removal methods that amount to billions of tons of removal annually over the coming decades, with DAC able to potentially account for a significant portion of the total to take.
Most CO2 capture and storage solutions are at an early stage and currently limited in scope, including DAC. 1PointFive is currently building Stratos in Ector County Texas, which it expects will be the largest DAC facility in the world to date, designed to capture 500,000 tons of CO2 per year when fully operational.
According to the companies, the investment will help advance the construction of the facility, which is expected to be commercially operational by mid-2025. 1PointFive has already signed carbon removal credit purchase agreements with companies such as 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 to STRATOS underlines its importance and potential for the world. We believe BlackRock’s expertise in global markets and industries makes them the ideal partner to advance Direct Air Capture on an industrial scale.”
According to BlackRock CEO and Chairman Larry Fink, the new DAC facility represents “an incredible investment opportunity for BlackRock customers” and “underscores the critical role of U.S. energy companies in climate technology innovation.”
BlackRock has come under significant pressure in recent months at the center of a vocal anti-ESG movement by Republican politicians in the US, who have accused the company of pursuing a social agenda, or ‘boycotting’ energy companies and to harm. . In an interview earlier this year, Fink addressed the claim that BlackRock is boycotting energy companies, noting that the company is actually one of the largest hydrocarbon investors in the world, and that the company is actively working with major energy companies on their path to decarbonization .
In a social media post after the announcement with Oxy, Fink said:
“As I have said many times, if the world is to achieve decarbonization, energy companies will have to play a central role. They have the market knowledge and technical expertise that will be needed at a global level. We are proud to partner with bold innovators like Vicki and the team at Oxy to support their ambitious plans.”