Occidental Petroleum Corp. has secured a landmark carbon removal agreement with Microsoft Corp. as part of Microsoft’s efforts to curb its growing emissions. Occidental, through its subsidiary 1PointFive, is developing a series of plants designed to extract carbon dioxide directly from the atmosphere.
Microsoft announced on Tuesday that it will purchase 500,000 metric tons of credits from Occidental’s Stratos plant in Texas, set to commence operations next year.
This agreement represents the largest purchase of credits from direct air capture (DAC) technology, solidifying Occidental’s leadership in scaling and commercializing carbon capture.
For Microsoft, which has seen increased emissions due to its advancements in artificial intelligence, such agreements are crucial in tackling its expanding carbon footprint.
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1PointFive and Climeworks were chosen to participate in the Energy Department’s $1.2 billion DAC hubs project on the Gulf Coast despite having distinct objectives. Occidental is driven partly by the potential to utilize captured carbon to enhance oil recovery.
Despite Microsoft’s goal to achieve carbon negative by 2030, its emissions rose approximately 30% last year, largely due to energy-intensive AI data centres.
Microsoft President Brad Smith recently remarked that if Microsoft’s target for decarbonization is akin to reaching the moon, the distance to that goal has increased more than fivefold since 2020.
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Occidental’s previous attempt at carbon capture was not successful.
In 2010, the company constructed a large plant near Stratos to capture carbon from a natural gas processing facility, using point-source carbon capture technology.
However, according to a Bloomberg Green investigation, the plant consistently failed to achieve its objectives. In 2022, the project was sold for significantly less than its construction cost.
