In an effort to offset the environmental impact of its business (and its founder’s 417-foot, US$500 million superyacht), Amazon is getting into the carbon capture game.
Driving the news: Amazon has made its first investment in direct air capture technology (DAC), purchasing 250,000 tons of carbon removal credits over 10 years from 1PointFive, a DAC plant in Texas.
- Firms like 1PointFive generate carbon credits by sucking CO2 out of the atmosphere with DAC technology and then sell those credits to companies like Amazon that are looking to offset part of their carbon footprint.
- The deal is one of the largest corporate carbon removal purchases and comes just a week after Microsoft agreed to buy credits from Heirloom to remove 315,000 tons of CO2.
Why it matters: Amazon and other Big Tech companies investing in carbon capture to reach net-zero targets may point the way to a path forward for DAC to become economically viable.
- In addition to the two tech giants backing DAC, the US government announced in April that it will award up to US$1.2 billion for two consortiums to create commercial-scale DAC hubs.
Yes, but: DAC technology still isn't close to being able to scale up its operations at a cost that would make it a viable option for companies that don’t have Amazon or Microsoft’s resources (which is basically all of them).
- Some experts are also concerned that companies will use DAC to mask their growing emissions, as opposed to using it to offset the damage they’ve already done.
Bottom line: There will need to be a lot more investments like this for DAC to become a real solution in the fight against climate change, and even then, it’s far from a guarantee.—LA