Since 2021, a flurry of tech industry interest in direct air capture has seen companies including Stripe, Shopify, and Microsoft committing to purchasing removal credits from startups in the space. But, until recently, Amazon was notably absent from the group.
In September, though, Amazon committed to purchase 250,000 metric tons of carbon removal from Occidental subsidiary 1PointFive. While the move came late compared to the company’s Big Tech peers, Amazon’s head of carbon neutralization science and strategy James Mulligan said 1PointFive’s Stratos plant was the sign — and the size — that the company was looking for.
“The decision was really an artifact of the fact that this is the first truly commercial scale deployment of any direct air capture technology,” Mulligan said, referencing the fact that the engineered carbon dioxide removal industry is still nascent, despite immense public and private sector interest.
Stratos, which 1PointFive says will eventually sequester 500,000 metric tons of carbon dioxide from the atmosphere each year, is expected to be the largest DAC project to date, far surpassing projects like Climework’s Mammoth plant in Iceland, which is expected to reach a capacity of 36,000 metric tons.
“Some of our peers have been supporting upstream and at a really small scale,” Mulligan said. “That’s great — I’m grateful for that. We want to do bigger stuff, a little further downstream; this is the first one that came through.”
While Amazon’s investment in Stratos (as well as that of Shopify and Airbus) is a sign of industry enthusiasm for the technology, one of Occidental’s earlier efforts illustrated that big carbon management projects come with risk. Last year, the company quietly sold off the world’s largest carbon capture plant, named Century and situated about 100 miles from the Stratos DAC facility, per Bloomberg. In its 13 years of operation, it had never run at more than a third of its capacity, the reporting found, due largely to shaky economics.
Amazon has pledged to reach net zero by 2040. However, by some estimates, it is currently one of tech’s biggest polluters.
The company has estimated its activities across the business emitted a total of 71.27 million metric tons of carbon dioxide in 2022. It previously faced underreporting accusations regarding the footprint of its retail business, and in its latest report, said it would start to require emissions reporting from its supply chain in 2024.
Of course, Amazon’s 250,000-ton commitment represents just a drop in the bucket compared to the scale of its emissions, which is also the reality for virtually every Big Tech company investing in CDR today. There’s simply not enough removal to go around just yet.
Amazon’s take on the tech
Waiting a few extra years gave Amazon the opportunity to get a sense of which way the winds were blowing in the CDR market, but Mulligan said it’s still far too soon to say which technologies will win out.
“I’m pretty certain that the technology that really scales, and that might end up being the lowest cost producer, probably hasn’t been invented yet,” he said. “It may be just an innovation on one of the existing technologies, but as currently constructed and operated, there’s just a long road ahead.”
DAC is a particularly energy-intensive form of carbon removal, and in the medium-term it’s likely that removal pathways that figure out how to reduce their energy intensity will have an advantage, Mulligan said. (This is one key element of carbon removal cost reduction, which is a major priority for the Department of Energy’s Carbon Negative Shot program.)
Longer-term, though, that may change: “If you have cheap, super widely available, scaleable green energy, then energy intensity becomes less important,” he speculated.
The pathway also has some key policy tailwinds, particularly in the U.S. For example, 1PointFive was selected to receive funding for a second Texas plant through DOE’s DAC Hubs program. The federal commitment to DAC served as “writing on the wall” for Amazon, Mulligan said.
However, there has also been concern that DAC — which has been embraced by major players in the fossil fuels sector — could enable a kind of greenwashing. Removing carbon dioxide from the air could, critics say, give polluters a free pass to continue emitting.
That concern has included criticisms of the very plant from which Amazon will purchase its carbon removal. Occidental, which purchased 1PointFive through a subsidiary earlier this year, has said advanced product sales for the Stratos plant, in addition to carbon removal credit purchases, have included an “offtake agreement with SK Trading International for an opportunity to purchase net-zero oil.”
Meanwhile, in early October, the DAC startup Heirloom released a set of corporate principles in which it vowed to prevent the industry from being used as a “fig leaf” and excusing fossil fuel expansion.
“We will not grant equity to companies whose core business is the production of oil and gas, nor will we name any of its industry representatives to the company board,” Heirloom said.
But for Amazon, the decision to back 1PointFive’s massive Stratos project was “pretty easy,” Mulligan said.
“We don’t really have the luxury right now of picking winners,” he added. At a foundational level, he said, whether a project is removing carbon from the atmosphere or mitigating further emissions, the outcome is the same “as long as those things were truly additional.”
It’s for that reason, Mulligan said, that the bulk of Amazon’s CDR portfolio will for now be focused on more immediate — if still controversial — solutions, like reducing tropical deforestation.
“The balance of our portfolio, by volume, will probably be weighted toward some of the things that need to happen this decade in order to get the global economy on track to the Paris targets,” he said.
