TD Bank Group today announced an agreement by investment bank TD Securities to purchase 27,500 tonnes of Direct Air Capture (DAC) Carbon Dioxide Removal (CDR) credits from energy giant Occidental’s (Oxy) carbon capture platform 1PointFive over four years.
According to TD, the transaction is one of the largest purchases of DAC CDR credits by a financial institution.
Amy West, Global Head of ESG Solutions at TD Securities said:
“As the need to move from climate commitments to action increases, companies across all sectors are looking for tangible ways to achieve their net zero targets. We are incredibly proud to partner with 1PointFive to support innovative, technology-based solutions designed to advance both our customers’ goals and our own low-carbon goals.”
DAC technology, named by the IEA as a key carbon removal tool 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.
The bank said the transaction will add to TD Securities’ portfolio of voluntary carbon credits, which will form part of the firm’s broader platform of ESG solutions offered to clients to support their transition to a low-carbon economy, with TD also plans to use some of the credits to offset its own operational emissions.
TD announced earlier this year a goal to enable CAD$500 billion in sustainable and low-carbon financing by 2030, and last year TD Securities launched a Carbon Advisory business focused on providing end-to-end carbon market solutions to clients. In 2020, TD announced a climate action plan to target net-zero greenhouse gas emissions by 2050 related to its operating and financing activities.
Janice Farrell Jones, SVP, Sustainability and Corporate Citizenship at TD, said:
“The transition to a low-carbon economy is complex and depends on transformative action across all sectors and economies, including the adoption of new technologies. Direct Air Capture holds tremendous promise as a tool to advance this journey and we are proud to play a role in helping scale innovation and support these growing business opportunities.”
TD’s CDR credits will be powered by 1PointFive’s Texas-based DAC plant, STRATOS, which is currently under construction and expected to be commercially operational in 2025. When fully operational, Stratos is expected to capture 500,000 tons of CO2 annually, making it the largest in the world. plant of its kind. Under the agreement with TD Securities, the captured CO2 underlying the removal credits will be stored through geological sequestration and not through an enhanced oil recovery process.
Michael Avery, President and General Manager at 1PointFive, said:
“We are proud to partner with TD Securities and believe their acquisition demonstrates how Direct Air Capture can become an essential tool in an organization’s sustainability strategy and contribute to further achieving net zero targets. The carbon removal credits from Direct Air Capture will be measurable, transparent and sustainable, with the aim of providing organizations with a solution to address their emissions.”