JPMorgan Chase said Tuesday it will spend $200 million to remove and store a total of 800,000 metric tons of carbon dioxide from the atmosphere, or the equivalent of 896 billion pounds of coal burned.
Among other things, the company is signing big contracts with two high-profile startups: Climeworks, which operates the largest direct air capture site in the world; and Charm Industrial, which sequesters CO2 by turning biomass into an oil.
Acknowledging an "insufficient supply of high-quality credits and low trust in many of the credits that have been purchased to date [from the voluntary carbon market]," JPMorgan Chase’s head of operational sustainability, Brian DiMarino, said that the bank is in a unique position to support initiatives aimed at enhancing the voluntary carbon market’s integrity due to its carbon management services and financing capabilities. That comment was part of a white paper released alongside the bank’s announcement.
Scientists and experts agree that the removal of carbon dioxide from the atmosphere is necessary to even attempt to meet the goal of the Paris Agreement to keep global temperatures from exceeding 1.5 degrees Celsius above pre-industrial levels.
However, some critics have pushed back against scaling investments in carbon removal, saying it does not address the deep operational changes needed to reduce emissions. The United Nations Framework Convention on Climate Change, the UN agency charged with overseeing the Paris Agreement and COP28, released an information note last week that stated that engineering-based carbon removal is "technologically and uneconomically unproven" and "does not contribute to sustainable development" in a list of concerns it has about the activity.
But that hasn’t stopped companies from charging ahead. Many companies have been encouraged by the 45Q tax credit changes from the Inflation Reduction Act, an amendment that increases payments for investments in carbon removal projects.
As part of the commitments announced Tuesday, JPMorgan Chase signed a $20 million, nine-year purchase agreement with Climeworks to capture and store 25,000 metric tons of carbon dioxide. This news follows Climeworks’ decision to open three new U.S.-based hubs of operation
"Agreements of this magnitude and beyond are what is immediately needed and expected from corporate buyers going from net-zero plans to net zero progress. They enable the capacity build-up that we all need to fight global warming at scale, in line with the latest climate science," said Jan Huckfeldt, Climework’s chief commercial officer, in a statement.
The U.S. bank also signed a five-year agreement with Charm Industrial to remove and store 28,500 metric tons of carbon using the startup’s bio-oil technique, in which carbon-rich liquid made from plant material is injected underground for permanent storage. The amount of money committed was not disclosed. Charm Industrial disclosed big news of its own last week with the announcement of a $53 million offtake agreement with Frontier, the advanced buying commitment partnership of Alphabet, Shopify, Meta and McKinsey Sustainability.
Aside from those deals, JPMorgan Chase signed a memorandum of understanding with CO280 Solutions, reflecting its intent to purchase up to 30,000 metric tons of carbon removal each year for 15 years. C0280 Solutions partners with industrial emitters, carbon dioxide storage providers and investors to develop carbon negative projects that capture biogenic carbon emissions for storage in geological formations.
Lastly, the bank committed to purchase $50 million of carbon removal credits from Frontier that cover the bank’s operational emissions, in addition to providing JPMorgan Chase clients with access to $25 million worth of credits. The credits come from the companies funded by the advance market commitment, each removing significant amounts of carbon from the atmosphere.
"Financing promising technologies needed to help accelerate the low-carbon transition requires capital and expertise," said Daniel Pinto, president and COO of JPMorgan Chase, in a statement. “We’re working to drive scalable development of carbon removal and storage as commercial solutions and aim to send a strong market signal."