Importance Score: 45 / 100 🔵
Occidental Petroleum Acquires Holocene to Bolster Direct Air Capture Initiatives
In a move to expand its footprint in carbon removal technologies, Occidental Petroleum has acquired Holocene, marking its second acquisition of a direct air capture startup within two years. This strategic acquisition underscores the fossil fuel giant’s growing investment in innovative carbon capture solutions.
Strategic Acquisition of Second Carbon Removal Firm
The transaction, executed through Occidental’s subsidiary, Oxy Low Carbon Ventures, signifies the energy corporation’s further commitment to direct air capture (DAC) technologies. Financial details of the agreement were not disclosed.
Holocene’s Innovative Carbon Capture Technology
Holocene has been focused on accelerating the development of its unique amino acid-based carbon removal technology. This acquisition follows a previous agreement in September with Google, valued at $10 million, for Holocene to deliver 100,000 metric tons of carbon removal by the early 2030s.
Carbon Removal Cost Competitiveness
Holocene’s carbon removal services were contracted at a price of $100 per metric ton. This rate is notably more competitive than current market offerings, where the cost of removing carbon dioxide directly from the atmosphere is typically estimated to be around $600 per metric ton.
Synergies with Enhanced Oil Recovery
Occidental’s interest in carbon capture stems from its application in enhanced oil recovery (EOR). This technique involves injecting CO2 underground to stimulate oil production from existing wells. Occidental previously acquired Carbon Engineering, another direct air capture company, in 2023 for $1.1 billion, further demonstrating its investment in this sector.
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Leveraging Technology for R&D
According to a representative from Occidental, Holocene’s technology will be instrumental in advancing the company’s research and development efforts in direct air capture.
Tax Incentives for Direct Air Capture
Projects utilizing direct air capture are eligible for tax credits under the Inflation Reduction Act. The specific value of these incentives is contingent upon factors including the use of zero-emission power sources for the equipment and whether the captured carbon dioxide is utilized for enhanced oil recovery operations.