TD Bank Group announced today an agreement by its investment bank TD Securities to purchase 27,500 metric tons of Direct Air Capture (DAC) Carbon Dioxide Removal (CDR) credits over four years from energy giant Occidental’s (Oxy) carbon capture platform 1PointFive.
The transaction marks one of the largest purchases of DAC CDR credits by a financial institution, according to TD.
Amy West, Global Head ESG Solutions at TD Securities said:
“As the need to move from climate commitments to action intensifies, corporations across all sectors are looking for tangible ways to achieve their net zero goals. We’re incredibly proud to partner with 1PointFive to support innovative, technology-based solutions that are intended to advance both our clients’ and our own decarbonization goals.”
DAC technology, listed by the IEA as a key carbon removal tool in the transition to a net-zero energy system, extracts CO2 directly from the atmosphere for use as a raw material or permanently removed when combined with storage. According to the landmark Intergovernmental Panel on Climate Change (IPCC) climate change mitigation study released last year, scenarios that limit warming to 1.5°C include carbon dioxide removal methods scaling to billions of tons of removal annually over the coming decades, with DAC positioned to potentially account for a significant portion of the total.
The bank said that the transaction will add to TD Securities’ portfolio of voluntary carbon credits, forming part of the firm’s broader platform of ESG solutions offered to clients to support their transition to a low-carbon economy, with TD also intending to use a portion of the credits to offset its own operational emissions.
TD announced a goal earlier this year to facilitate CAD$500 billion in sustainable and decarbonization finance by 2030, and last year, TD Securities launched a Carbon Advisory business, aimed at offering clients with end-to-end carbon market solutions. In 2020, TD announced a Climate Action Plan to target net-zero greenhouse gas emissions associated with its operating and financing activities by 2050.
Janice Farrell Jones, SVP, Sustainability and Corporate Citizenship at TD, said:
“The transition to a low-carbon economy is complex, and relies on transformative action across sectors and economies, including the adoption of new technologies. Direct Air Capture holds enormous promise as a tool to drive progress on this journey and we are proud to play a role, helping to scale innovation and support this growing business opportunity.”
TD’s CDR credits will be enabled by 1PointFive’s Texas-bases DAC plant STRATOS, which is currently under construction and expected to be commercially operational in 2025. When fully operational, Stratos is expected to capture 500,000 metric tons of CO2 annually, making it the world’s largest plant of its kind. Under the agreement with TD Securities, the captured CO2 underlying the removal credits will be stored through geologic sequestration and not through an enhanced oil recovery process.
Michael Avery, President and General Manager at1PointFive, said:
“We are proud to partner with TD Securities and believe their purchase demonstrates how Direct Air Capture can become a vital tool in an organization’s sustainability strategy and help further net-zero goals. Carbon removal credits from Direct Air Capture will be measurable, transparent and durable, with the goal of providing a solution for organizations to address their emissions.”