Morgan Stanley has announced a partnership with Climeworks to remove carbon dioxide (CO2) from the atmosphere through direct air capture (DAC) technology.
Swiss-based leader in DAC technology company Climeworks will help Morgan Stanley offset a portion of its unavoidable emissions through carbon removal.
The CO2 will then be permanently stored underground. “We are thrilled to support Morgan Stanley in their ambition to address climate change. The finance sector can play a pivotal role in scaling solutions that help reduce global carbon emissions,” said Christoph Gebald, co-CEO and co-founder of Climeworks.
DAC is a relatively new but promising technology that allows for the capture of carbon directly from the air. Climeworks’ process captures atmospheric CO2, filters it and stores it in geological formations deep underground, preventing it from re-entering the atmosphere. This approach contrasts with more traditional methods of carbon offsetting, such as planting trees, which are not permanent and can be vulnerable to events like wildfires.
Morgan Stanley’s collaboration with Climeworks is part of the bank’s broader strategy to address climate risk in its operations and investments. As Audrey Choi, Chief Sustainability Officer at Morgan Stanley, explained, “The effects of climate change present risks to global markets and economic stability. Our partnership with Climeworks underscores our long-term focus on addressing these challenges and finding innovative ways to support decarbonisation.”
Climeworks has already gained momentum in the carbon removal sector, with corporate clients such as Microsoft and Stripe also backing the technology. The company’s Orca plant in Iceland, currently the largest operational DAC facility, has been capturing carbon since 2021.
Mammoth project. ©Climeworks
The company’s latest partnership also reflects growing pressure on businesses to not only reduce their carbon footprints but to actively remove CO2 from the atmosphere. “The urgency of addressing climate change cannot be overstated, and we believe that removing CO2 is a critical step toward achieving our sustainability goals,” added Choi.
Climeworks’ Orca project in Iceland is the world’s first large-scale DAC plant, operational since 2021. Built at a cost of approximately $15 million, it has the capacity to capture 4,000 tonnes of CO2 per year, which is permanently stored underground in basalt rock formations.
Climeworks is now advancing its technology with the Mammoth project, also in Iceland. Expected to be ten times larger than Orca, Mammoth is designed to capture 36,000 tonnes of CO2 annually. The project, part of Climeworks’ goal to reach multi-megatonne removal capacity by 2030, is anticipated to play a critical role in scaling up DAC technology.
While the exact cost for Mammoth hasn’t been disclosed, it is a crucial step toward Climeworks’ long-term vision of capturing one billion tonnes of CO2 per year by 2050.
Gebald added, “We believe direct air capture will be a key technology in reaching global climate targets, and partnerships like this demonstrate how businesses can contribute to that journey.”
An efficient way to decarbonise?
Not without its naysayers, DAC technology has drawn some criticism over its scalability and cost-effectiveness. Critics argue that the energy required to power DAC systems could limit its impact. According to a 2022 study by Oxford University, scaling DAC to capture gigatonnes of CO2 annually would require a vast amount of renewable energy, potentially competing with other decarbonisation efforts.
Dr. Steve Smith, the study’s lead author, commented, “While DAC has potential, it should not divert attention or resources from urgent emissions reductions across industries.” Concerns also remain about the high costs, with estimates reaching up to $600 per ton of CO2 removed.
However, according to some, DAC technology could hold potential as part of a broader climate strategy. A report by the International Energy Agency (IEA) revealed that DAC could remove up to 980 million tonnes of CO2 annually by 2050 if scaled effectively.
