U.S. investment bank Morgan Stanley has signed a long-term contract with direct air capture company Climeworks for the delivery of 40,000 tons of carbon removal. The agreement will run until 2037 and provides fresh funds to the Swiss company which is the technology provider for the Project Cypress DAC hub which is eligible for DOE support of up to $600 million.
The cost per ton was not disclosed in the announcement but Climeworks has previously shared a range between $1,000-1,200. The company recently unveiled its Generation 3 technology which is expected to achieve a total cost of $400-600 by 2030.
“As a financial institution, Morgan Stanley plays an important role in helping to direct capital toward low-carbon solutions,” says Jessica Alsford, Morgan Stanley’s Chief Sustainability Officer. “Through our partnership with Climeworks, we are supporting the development of technology that can help drive the global economy’s transition to a more sustainable future.”
Climeworks leading the way
This becomes the second-largest contract Climeworks has inked so far while also helping Morgan Stanley achieve its net-zero financed emissions goal by 2050.
“Investing in carbon removal is more than an environmental responsibility—it’s a strategic business move. By securing access to high-quality carbon removals now, companies position themselves ahead of the curve of future regulatory changes and competitive pressures. Orca and Mammoth represent just the beginning of a future trillion-dollar industry and Morgan Stanley understands the benefits of entering the market today”, says Christoph Gebald, co-founder and co-CEO of Climeworks.
The company has shown a steady pace of progress in developing Project Cypress. Earlier this week it announced a partnership with carbon management company CapturePoint Solutions for the transportation and storage needs of the Louisiana-based project.
The partnership will see CapturePoint transport captured carbon dioxide from the DAC facility located in Calcasieu Parish to a storage point in Class VI wells at the Central Louisiana Regional Carbon Storage Hub (CENLA Hub), CapturePoint’s sites located in Vernon and Rapides Parishes.
Morgan Stanley to invest $750 million in carbon removal and reduction
Earlier in October the investment bank also announced it had successfully closed its 1GT climate-focused private equity fund, securing $750 million in capital commitments for growth-stage investments in carbon removal and reduction companies across North America and Europe. The fund’s target, embedded in the name, is to achieve a 1 gigatonne impact by 2050.
The fund will be focused on companies during their growth phase with Vikram Raju, Morgan Stanley Investment Management‘s Head of Climate Private Equity Investing and 1GT, emphasizing how investors in the fund recognized the opportunity to support a fund with a clear and measurable climate objective as well as solid growth prospects.
Read more: Morgan Stanley IM Sets Up $750 Million Fund To Invest In Carbon Removal And Reduction
