Startup Climeworks AG achieved an important milestone recently by successfully pulling CO2 from the open air and storing it underground for the first time, The Wall Street Journal reports (subscription).
The Icelandic company will bring its technology to Louisiana in 2024, following its November agreement with Lake Charles-based Gulf Coast Sequestration to develop and launch the first direct-air capture and storage hub on the Gulf Coast.
Customers like Microsoft, Shopify and payments firm Stripe Inc. are paying a significant amount to buy carbon credits generated by the startup, allowing them to effectively offset their emissions.
They pay a premium, sometimes 100-times more than basic credits, for the credits from Climeworks because there is more certainty they remove carbon from the atmosphere. The companies are also willing to pay more to help jump-start the industry, hoping that costs decline rapidly.
Tax credits that are part of the Inflation Reduction Act are now worth up to $180 per metric ton of removal. Thanks to the tax credit incentives available through the bill, the company is eyeing U.S. expansion with the government doling out about $3.5 billion to develop four regional direct-air capture hubs.
Businesses globally have agreed to purchase credits equivalent to more than 700,000 metric tons of carbon removal from Climeworks and other companies, according to data provider CDR.fyi. Read the full report.