Global commodities trading company Trafigura announced a new agreement with 1PointFive, the Direct Air Capture (DAC)-focused subsidiary of energy giant Occidental (Oxy) for the advance purchase of carbon credits to be produced from 1PointFive’s industrial DAC facility, STRATOS.
Announced at the World Economic Forum’s (WEF) Annual Meeting in Davos, Switzerland, the agreement marks Trafigura’s first transaction under its commitment as a Founding Member of the First Movers Coalition (FMC). Trafigura launched the commitment at last year’s WEF meeting, pledging to purchase at least 50,000 tons of carbon dioxide removal credits by the end of 2030.
FMC was launched at the COP26 climate conference, creating a coalition of companies committed to creating early markets for clean technologies addressing hard-to-abate sectors. By setting major advanced purchase commitments to be met by 2030, the coalition sends strong market signals enabling the scaling and commercialization of clean technologies including near-zero carbon steel, aluminum, shipping, trucking and aviation, as well as advanced carbon dioxide removal solutions.
Hannah Hauman, Global Head of Carbon Trading for Trafigura, said:
“We are delighted to collaborate with 1PointFive as we expand our global customer offering for hard-to-abate sectors. Supporting the development of large-scale removals projects demonstrates our commitment to advancing carbon sequestration technologies, underpinning demand today to enable the scaling of production for tomorrow.”
DAC technology, listed by the IEA as a key carbon removal option 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.
Most solutions that capture and store CO2 are early stage and currently limited in scale, including DAC. 1PointFive is currently constructing STRATOS in Ector County Texas, which it expects to be the largest DAC facility in the world to date, designed to capture 500,000 tonnes of CO2 per year when fully operational.
According to the companies, the advance purchase of credits by Trafigura will help to support the adoption of 1PointFive’s CDR credits to help hard-to-abate industries address their emissions.
Michael Avery, President and General Manager of 1PointFive, said:
“Our work with Trafigura is rooted in a shared commitment to the climate and an understanding of the critical role that durable carbon removal, specifically Direct Air Capture, plays in helping organizations address their carbon footprint. We are excited about this agreement because it establishes our collaboration with a global commodities firm focused on reducing emissions across the value chain.”