ARKANSAS, Nov 09 (Future Headlines)- Occidental Petroleum has announced plans to offer technology licenses to partners for the construction of plants that capture carbon dioxide from the air, according to CEO Vicki Hollub. This development comes one day after the company secured investment for its first large-scale direct air capture (DAC) plant. The business model aims to support over 1,000 projects designed to mitigate climate change, generating revenue from the sale of DAC technology and design expertise.
Direct air capture technology removes carbon dioxide from the atmosphere, allowing for storage underground or for use in various products, such as concrete and aviation fuel. Occidental’s approach involves charging a licensing fee and transferring project management and construction responsibilities to its partners. The first large-scale DAC plant, known as Stratos, is a $1.3 billion project slated to begin operation in mid-2025. Occidental intends to continue building its own DAC projects, with plans to develop up to 100 of them.
Occidental anticipates spending approximately $600 million annually through 2026 on its own projects. However, it aims to accelerate the pace of DAC deployment by partnering with other organizations. The company has already established agreements with various partners that endorse its proprietary DAC technology and commercial viability.
Occidental recently received a $550 million investment from BlackRock for its West Texas plant, Stratos. In a separate deal, the state-owned Abu Dhabi National Oil Company (ADNOC) agreed to fund a preliminary engineering study for a 1 million metric ton per year DAC facility in the United Arab Emirates.
As the demand for carbon dioxide removal credits (DAC credits) continues to rise, Occidental is considering shifting its focus toward licensing DAC technology to accommodate the growing demand. The company’s subsidiary, 1PointFive, has secured a 10-year agreement to sell DAC credits to Amazon and a three-year agreement with All Nippon Airways.
More than 65% of the first plant’s capacity through 2030 has already been sold to partners, further highlighting the demand for carbon removal technology and carbon credits. Vicki Hollub stressed that Occidental does not have the capability to provide all the capital required for carbon capture projects and aims to engage partners to facilitate rapid deployment.
Reporting by Emad Martin