Occidental Petroleum, an oil major, has announced its plans to acquire Carbon Engineering, a Canadian Direct Air Capture (DAC) supplier, for $1.1 billion through its subsidiary, Oxy. Occidental’s subsidiary, Oxy Low Carbon Ventures, focuses on developing technologies and solutions that drive the company’s growth while reducing emissions. Carbon Engineering specializes in deploying large-scale DAC technology, which captures carbon directly from the atmosphere and either stores it underground or utilizes it to create valuable products. This acquisition will enable Occidental to establish multiple DAC sites and contribute to its net-zero goal.
Occidental and Carbon Engineering have been collaborating on DAC technologies for nearly five years. The purchase will allow Occidental to build approximately 100 DAC plants, accelerating technology breakthroughs and expanding deployment. By doing so, Occidental aims to make DAC a cost-effective global carbon removal solution. This acquisition aligns with Occidental’s net-zero strategies and presents an opportunity to generate new revenue streams and enhance profitability.
Carbon Engineering’s DAC technology employs standardized and proven processes. Giant fans powered by solar energy draw in CO2, which is then captured by liquid sorbents. The captured carbon is heated to obtain pure CO2, which can be injected underground or used in various valuable products. Occidental President and CEO Vicki Hollub emphasizes the significance of this agreement in scaling up DAC, stating that it will enable the global deployment of DAC technology at a climate-relevant scale and position DAC as the preferred solution for businesses seeking to reduce their hard-to-abate emissions.
The deal between Occidental and Carbon Engineering involves Occidental purchasing CE’s equity in three annual cash payments. The transaction is expected to be completed before the end of this year, pending regulatory approvals in the United States and Canada. Following the acquisition, Carbon Engineering will become a wholly owned subsidiary of Oxy Low Carbon Ventures, with its R&D activities and Innovation Center remaining in British Columbia, Canada. Carbon Engineering’s personnel will continue their DAC tech development efforts while collaborating closely with Occidental and 1PointFive, a Carbon Capture, Utilization, and Sequestration (CCUS) platform, to provide DAC solutions.
Carbon Engineering CEO Daniel Friedmann expresses appreciation for the acquisition, considering it the next chapter in their journey. The deal signifies their commitment to accelerating the implementation of DAC-based climate solutions in the United States and worldwide. This acquisition aligns with the US government’s intention to employ DAC and other carbon removal technologies to achieve net-zero emissions by 2050. Recently, the US Department of Energy announced plans to invest over $1.2 billion in two DAC projects in Texas and Louisiana. Occidental will oversee the West Texas-based DAC project called Stratos, while Climeworks-led Project Cypress in Louisiana will also receive funding. These projects have the potential to remove over 2 million metric tons of carbon emissions annually.
Notably, the US government is leading the way in supporting DAC advancements and scaling up. However, other countries such as the UK and EU are also launching DAC funding programs. DAC is one option available to remove carbon dioxide, with the world needing to eliminate 1 billion tons or 1 gigatonne of CO2 annually by 2030 to prevent catastrophic disasters. Occidental’s vision aligns with the growing global support for innovative carbon capture solutions as governments and industries prioritize DAC technology.