JPMorgan, the largest fossil-fuel financier, strikes deals that intend to remove and store 800,000 metric tons of carbon dioxide equivalent (mtCO₂e) from the atmosphere for $200 million [$200m/800,000=$250 per metric ton].
CNBC: JPMorgan has signed a $20 million, nine-year agreement with the Swiss company Climeworks to deliver the equivalent of 25,000 metric tons of carbon dioxide from the atmosphere.
So taking this as a subset, that’s $800/ton, so the other tons cost a lot less on average.
“JPMorgan Chase is involved in many compliance markets — including the EU Emissions Trading System, the Regional Greenhouse Gas Initiative (RGGI) and the California cap-and-trade program — principally through our commodities trading business.
“However, this paper focuses primarily on our interaction with the voluntary market (voluntary carbon market or VCM), because we believe it presents both clearer challenges and the greatest potential for accelerating progress toward net-zero.“
From Bloomberg’s story:
The bank is part of an alliance of banks pledging to reach net zero by 2050 and has recently made substantial investments in renewables, according to a BloombergNEF analysis. Still, the amount that the bank will spend on the carbon removal deal is dwarfed by the amount it has used to finance fossil fuel projects. Between 2016 and 2022, JPMorgan spent more than $400 billion lending to and underwriting the fossil fuel sector, according to an annual report tracking banks put together by a group of NGOs led by the Rainforest Alliance. The report found that that made the bank the largest fossil fuel financier in the world over that time period, though JPMorgan’s lending to fossil fuel companies fell 42% last year.
White paper at the bottom.
(Adds details of bank’s lending)
JPMorgan deals announcement:
JPMorgan Chase seeks to scale investment in emerging carbon removal technologies, announces agreements intended to durably remove and store 800,000 tons of carbon
New York, NY, May 23, 2023 – To help speed and scale the growth and development of carbon dioxide removal (CDR) technologies, JPMorgan Chase signed long-term agreements to purchase over $200 million in high quality, durable1 CDR.
These agreements, intended to remove and store 800,000 metric tons of carbon dioxide equivalent (mtCO₂e) from the atmosphere [$200m/800,000=$250], represent one of the largest carbon removal purchases announced to date2. These will support scaling up carbon removal and are expected to enable the Firm to match every ton of its unabated direct operational emissions with durable carbon removal by 2030, further accelerating JPMorgan Chase’s operational sustainability efforts.
The market for carbon removal is expected to grow dramatically between now and 2050. The Intergovernmental Panel on Climate Change (IPCC) estimates cumulative removal needs of 100 to 1,000 gigatons (GtCO₂e) of carbon dioxide globally by 2100, with interim annual removal rates that approach 10 GtCO₂e by mid-century.
Emergent carbon markets can help speed the development and commercialization of high-integrity carbon reduction and removal solutions.
“These agreements reflect our ambition to support scale, innovation and evolution in these technologies. Alongside reducing emissions, the world needs significant investment in durable carbon removal solutions with gigaton-scale potential,” said Ashley Bacon, Chief Risk Officer, JPMorgan Chase.
“Financing promising technologies needed to help accelerate the low-carbon transition requires capital and expertise. We’re working to drive scalable development of carbon removal and storage as commercial solutions and aim to send a strong market signal,” said Daniel Pinto, President and Chief Operating Officer, JPMorgan Chase.
JPMorgan Chase announces:
- One of the largest ever purchases of carbon dioxide removal (CDR) services via direct air capture and storage (DAC+S) from Climeworks: The Firm signed a 9-year agreement with Climeworks to deliver 25,000 mtCO₂e of carbon removal services.
“JPMorgan Chase’s long-term agreement with Climeworks sets a compelling example for the immediate action and the portfolio approach that are needed to deploy CO2 removal solutions. The finance industry has no doubt become a trailblazer in supporting the scale up of high-quality carbon removal solutions, today marks a new milestone in this field,” says Christoph Gebald, co-founder and co-CEO of Climeworks.
- Significant purchase of bio-oil CDR from Charm Industrial: The Firm agreed to purchase Charm CDR removing and storing approximately 28,585 mtCO₂e over 5 years and deliveries have already begun for JPMorgan Chase.
“We’re excited to partner with JPMC to remove thousands of tons of carbon while creating significant economic opportunities in communities with large scale agriculture and oil and gas expertise – right here in the U.S. JPMorgan Chase’s commitment to CDR is an important industry catalyst that will help us grow our carbon removal operations, and we’re proud to be one of their early partners,” said Peter Reinhardt, co-founder and CEO of Charm Industrial.
- Long-term agreement with CO280 Solutions, Inc., one of the largest carbon removal agreements ever announced: The Firm signed a ‘Memorandum of Understanding’ (MOU) with CO280 Solutions, Inc., reflecting the Firm’s intent to purchase up to 30,000 mtCO₂e of CDR per year for delivery over up to 15 years, for an expected total removal of as much as 450,000 mtCO₂e.
“CO280 was created to deliver what the carbon market wants: durable, high-quality, affordable CDR at large scale…today. JPMorgan Chase’s ambitious strategy to support high-quality carbon removal is a catalyst for growth and helps accelerate scale across these technologies. We’re thrilled to be selected as a CDR partner along with Climeworks and Charm,” said Jonathan Rhone, CEO of CO280 Solutions.
- $75 million commitment to Frontier to help accelerate CDR technologies by guaranteeing demand: The Firm recently joined Frontier, an advance market commitment to accelerate carbon removal. JPMorgan Chase committed to purchase $50M of durable, high-quality CDR credits for its own operational emissions and will provide clients with access to as much as $25M of credits to help them meet their climate targets.
“Institutional capital is a crucial ingredient in getting carbon removal to gigaton scale. JPMorgan Chase brings deep financial expertise that can meaningfully accelerate the field. We’re thrilled that they’ve joined Frontier,” said Nan Ransohoff, Head of Frontier.
“These agreements will meaningfully contribute to moving carbon removal forward as a solution available to a wider range of buyers, including our clients,” said Heather Zichal, Global Head of Sustainability, JPMorgan Chase.
“Alongside facilitating sustainable finance and supporting clients in the energy transition, within our operations, we’re first reducing emissions to minimize our environmental impact and then addressing what we can’t yet abate. Our goal is to remove and durably store one ton of CO₂ for every ton of unabated direct operational emissions by 2030. Working with partners like Charm, Climeworks, CO280 and Frontier supports these objectives and helps bring innovative solutions to market at scale,” said Brian DiMarino, Head of Operational Sustainability, JPMorgan Chase.
The Firm will continue to utilize nature-based carbon removal solutions as part of its efforts to neutralize Scope 3 operational emissions, such as from employee business travel, and believes nature-based carbon removal credits continue to have an important role to play, with consideration of the limited durability of these solutions.
Carbon markets must achieve greater credibility and functionality
Alongside emissions reductions, the voluntary carbon market is an important tool for enabling the low-carbon transition to occur at a pace and scale commensurate with the climate challenge.
Today the Firm published a white paper summarizing its perspective on the role that the voluntary carbon market plays, current market challenges, and how JPMorgan Chase is working to support and leverage a more effective carbon market. It also presents a set of core principles that the Firm references when evaluating carbon credits to support the Firm’s sustainability commitments and engaging with clients on carbon credit-related transactions.
“The voluntary carbon market needs science-based and equitable criteria to ensure carbon credits represent genuine emissions reduction or removal. That is why we support the transparency efforts of organizations like the Integrity Council for Voluntary Carbon Markets and are working with Carbon Direct, as we seek to deliver on a science-driven strategy for carbon management,” said Taylor Wright, Head of Strategy, Operational Sustainability & Carbon Management, JPMorgan Chase.
The Firm is building resources to support more unified global standards, improve market infrastructure and help companies implement their own effective carbon management strategies, including understanding how to evaluate carbon market risks, benefits and best practices for tracking progress over time.
For more information on how JPMorgan Chase is reducing the environmental impact of its operations and supporting clients’ transition to a lower carbon economy, including targeting to finance and facilitate $1 trillion for green initiatives by 2030, visit www.jpmorganchase.com/sustainability.
JPMorgan Chase signed a 9-year agreement with Climeworks, a leader in carbon dioxide removal through direct air capture (DAC) combined with storage. This will deliver 25,000 mtCO₂e of CDR services, which is one of the largest ever purchases by a single corporate buyer from a single CDR solution provider in DAC.
Climeworks pioneered and now spearheads a high-quality, high integrity approach via DAC+S with operational, measurable, additional, and permanent CDR as a service, empowering companies to advance their net zero roadmaps and fight global warming.
Long-term commitments like the one announced today play a key role in scaling the carbon removal industry by providing planning security to producers, buyers and investors. As a demonstrable step on its scale-up roadmap to gigaton capacity, Climeworks recently announced the ground-breaking of its next DAC+S facility, called Mammoth, and its participation in several potential projects in the U.S. – while continuing to explore other locations and take part in other projects.
On this journey, J.P. Morgan also acted as a sole placement agent on a $650 million equity private placement for Climeworks in 2022.
The Firm agreed to purchase bio-oil CDR credits from Charm for the removal and storage of approximately 28,585 mtCO₂e over 5 years.
Charm delivers durable carbon removal by injecting bio-oil, a carbon-rich liquid made from inedible, excess plant materials into deep, underground injection reservoirs, permanently storing the carbon absorbed by the plants as they grew from the atmosphere.
Charm is proud to already be delivering durable carbon removal in the U.S. right now, including to JPMorgan Chase. With over 2 million abandoned or orphaned oil and gas wells in the US alone, there’s a tremendous potential to store liquid forms of carbon and repurpose oil and gas infrastructure and expertise honed over hundreds of years in the US to reduce atmospheric CO2.
In addition, Charm’s use of waste agricultural feedstocks and forestry residues can help improve air quality, reduce the threat of wildfires, and create additional revenues for America’s farmers.
Charm is also commercializing the use of bio-oil to produce carbon negative iron, which could help decarbonize the 6% of global emissions from iron-making while also delivering durable carbon removal.
“Charm’s long-term footprint is a highly distributed agricultural operation, driving improved soil health as a side benefit. Additionally, Charm has the potential to re-use existing, unused oil and gas wells by safely filling and closing orphaned wells. These efforts can stop environmental harms caused by some types of fossil fuel infrastructure while improving natural soil health and creating economic investment in parts of the country that the climate transition might otherwise leave behind,” said Reinhardt.
CO280 Solutions, Inc.
JPMorgan Chase has signed a ‘Memorandum of Understanding’ (MOU) with CO280 Solutions, Inc., reflecting the Firm’s intent to purchase CDR credits of up to 30,000 mtCO₂e per year for delivery over up to 15 years, for an expected total removal of as much as 450,000 mtCO₂e.
CO280 is a developer of carbon negative projects actively partnering with industrial emitters, technology suppliers, CO₂ storage providers, and investors to develop, finance, own, and operate projects that capture biogenic CO₂ emissions for durable sequestration in geological formations. This high-quality biomass carbon removal and storage (BiCRS) pathway as BioDAC.
The Firm’s early purchase is intended to support the development and deployment of CO280’s Bio-DAC projects as part of its goal of delivering 10 megatons per year of CDR operating or under construction by 2030.
On April 12, JPMorgan Chase joined Frontier, an advance market commitment to accelerate carbon removal by guaranteeing future demand. The Firm committed to purchase $50M of durable, high-quality CDR credits for its own operational emissions and will provide clients with access to as much as $25M of credits to help them meet their climate targets.
“We are seeing more demand from buyers interested in durable carbon removal projects,” said Troy Rohrbaugh, Head of Global Markets at J.P. Morgan. “Our investment in Frontier will enable us to offer our clients access to some of the most promising CDR solutions.”
About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorgan Chase had $3.7 trillion in assets and $303 billion in stockholders’ equity as of March 31, 2023. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.