US investment bank Morgan Stanley has signed a long-term contract with direct air capture company Climeworks for the delivery of 40,000 tons of carbon removal in what will be a significant move in Morgan Stanley’s strategy.
This agreement, running until 2037, provides fresh funding to the Swiss company, the technology provider for the Project Cypress DAC hub eligible for up to $600 million in DOE support.
While the cost per ton was not disclosed, Climeworks has previously indicated a range of $1,000 to $1,200. The company recently introduced its Generation 3 technology, expected to reduce costs to $400 to $600 by 2030. This is a crucial factor for both Climeworks and Morgan Stanley in the carbon removal agreement.
Progress on Project Cypress
Climeworks is making progress on Project Cypress. It recently announced a partnership with CapturePoint Solutions, a carbon management company, which aligns with the goals of Morgan Stanley and their focus on carbon removal.
This partnership will handle the transportation and storage of captured carbon dioxide from the DAC facility in Calcasieu Parish. The captured carbon will be stored in Class VI wells at the Central Louisiana Regional Carbon Storage Hub (CENLA Hub).
Climeworks’ Growing Impact
This contract marks the second-largest agreement for Climeworks and helps Morgan Stanley work toward its net-zero financed emissions goal by 2050.
The co-founder and co-CEO of Climeworks noted that investing in carbon removal is both an environmental responsibility and a strategic business move. By securing access to high-quality carbon removals now, companies can stay ahead of future regulatory changes and competitive pressures, an important consideration for both Climeworks and Morgan Stanley.
Morgan Stanley’s Climate Fund
Earlier in October, Morgan Stanley announced the closing of its 1GT climate-focused private equity fund, raising $750 million for growth-stage investments in carbon removal and reduction companies in North America and Europe. The fund aims for a 1 gigatonne impact by 2050 and is crucial for furthering Morgan Stanley’s efforts in carbon removal.
The head of Climate Private Equity Investing emphasized that investors recognized the opportunity to support a fund with clear climate objectives and solid growth prospects.
Supporting Sustainable Solutions
Morgan Stanley’s Chief Sustainability Officer stated that the firm plays a crucial role in directing capital toward low-carbon solutions. Through the partnership with Climeworks, the bank aims to support technology that drives the transition to a more sustainable economy. Their commitment to carbon removal technology like Climeworks’ is a testament to this goal.
