Amazon’s Inaugural Foray into Direct Air Capture Climate Technology: A Game-Changer in Emissions Reduction

Amazon.com (NASDAQ:AMZN), the e-commerce behemoth, has taken its inaugural step into direct air capture (DAC) technology, a process that removes emissions from the atmosphere. The company announced its commitment to purchase 250,000 tons of removal credits over the span of a decade, according to a statement released on Tuesday.

These credits will be procured from the 1PointFive direct air capture plant situated in Texas, a project in development by the Oxy Low Carbon Ventures subsidiary of the oil company Occidental. Amazon intends to deploy these credits as part of its strategy to achieve net-zero carbon emissions by the year 2040. While Amazon did not disclose the financial particulars of the agreement, DAC technology developers have previously noted that removal credits can currently cost several hundred dollars per metric ton.

Many scientists contend that extracting billions of tons of carbon dioxide from the atmosphere, either through natural or technological means, represents a crucial step towards achieving the objectives set forth in the U.N. Paris climate agreement, particularly given the ongoing emission of greenhouse gases from fossil fuel usage.

Projects designed to capture carbon dioxide from the air generate removal credits, which can be purchased and utilized by companies to offset emissions they are unable to reduce within their operations. While the cost and scalability of these technological solutions are still evolving, major technology companies have increasingly embraced DAC. Just last week, Microsoft (NASDAQ:MSFT) entered into a multi-year deal to acquire 315,000 metric tons of removal credits from U.S. project developer Heirloom.

In 2022, Amazon’s carbon footprint amounted to 71.27 million metric tons of carbon dioxide equivalent, encompassing Scope 3 emissions—indirect emissions originating from sources the company does not own or directly control, such as emissions resulting from employee air travel for work purposes.

Jamey Mulligan, the Head of Carbon Neutralization Science and Strategy at Amazon, emphasized the need for a concerted effort to rapidly scale up this technology. He mentioned that achieving massive scale quickly is imperative, and entities like 1PointFive and Occidental (NYSE:OXY) possess the requisite knowledge, expertise, workforce, and experience to scale industrial plants of this nature.

Despite the growing interest in DAC, certain environmental organizations have voiced concerns about the involvement of oil companies in the development of carbon capture facilities. The 1PointFive project was one of two large-scale DAC “hubs” selected last month to receive the largest available U.S. Department of Energy grants for this technology.

Mulligan indicated that while Amazon is focused on reducing its own emissions and increasing its use of renewable energy, the company is likely to employ a combination of carbon offsets, including those from nature-based initiatives, to help achieve its net-zero emissions target.

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