Heirloom and Microsoft sign one of the largest permanent CO2 removal deals to-date
September 7, 2023
September 6, 2023

Heirloom and Microsoft sign one of the largest permanent CO2 removal deals to-date

The purchase unlocks key project financing mechanism to dramatically scale and reduce the cost of Heirloom’s Direct Air Capture facilities

Microsoft has signed a long term contract to purchase up to 315,000 metric tons of CO2 removal over a multi-year period from Heirloom – a Direct Air Capture company that harnesses the natural properties of limestone to remove CO2 from the atmosphere – in one of the largest carbon dioxide removal deals to-date.

This deal follows Heirloom’s DAC Hub selection by the US Department of Energy for up to $600 million in matching funding.  Project Cypress, to be located in southwestern Louisiana, was one of just two hubs to qualify for the highest levels of funding.

Microsoft Senior Director of Energy and Carbon Brian Marrs said “Microsoft’s agreement with Heirloom is another important step in helping build the market for high-quality carbon removal and supports our path to become carbon negative by 2030. As an investor in and customer of Heirloom, we believe that Heirloom’s technical approach and plan are designed for rapid iteration to help drive down the cost of large-scale Direct Air Capture at the urgent pace needed to meet the goals of the Paris Agreement.”

Additionally, the deal between Microsoft and Heirloom represents one of the first bankable carbon dioxide removal agreements. This opens up a crucial funding mechanism for Heirloom to finance future Direct Air Capture facilities, similar to how other large-scale infrastructure projects have been financed for decades.

Heirloom CEO Shashank Samala said, “Microsoft has been an incredible supporter of Heirloom, helping us scale one of the world’s most cost-effective Direct Air Capture solutions. Bankable agreements of this magnitude enable Heirloom to raise project finance for our rapid scale-up, fueling exponential growth like what we’ve seen in the renewable energy industry.”

This agreement provides additional predictable and durable cash flows needed to enable the project financing of upcoming Heirloom’s Direct Air Capture facilities. Project financing has been a crucial accelerant of large-scale infrastructure development for decades, and involves the funding of capital-intensive projects with the future cash flows generated by those projects. Notably, this funding mechanism was a catalyzing force that enabled the rapid scaling and commercialization of wind, solar, and other renewable energy technologies.

Given the need for substantial investments in durable carbon removal solutions with gigaton-scale potential, some companies are supporting CDR scaling alongside renewable energy and other green technologies. JPMorgan Chase, for example, is targeting $2.5 trillion for sustainable development and climate action by 2030.

“It is incredibly encouraging to see agreements of this magnitude because corporate buyers, like Microsoft, can unlock a significantly lower cost of capital for Direct Air Capture companies that are seeking to finance infrastructure projects, such as future carbon dioxide removal facilities,” said Robert Keepers, Managing Director, J.P. Morgan Green Economy Banking.

The deal between Heirloom and Microsoft also advances the U.S.’ climate leadership globally by uniting domestic buyers and sellers to advance net-zero commitments under the First Movers Coalition – an initiative launched by the Biden Administration to harness the purchasing power of private companies to create early markets for innovative clean technologies that enable both reductions and removals. Since its launch at the World Economic Forum in 2022, the First Movers Coalition has galvanized unprecedented public and private sector commitments. This deal not only advances our progress towards those goals but also cements the leading role of the U.S. in global efforts to combat climate change.

The CO2 removal credits purchased as part of this agreement will be generated at Heirloom’s next two commercial deployments in the U.S. and will support Microsoft’s goal to be carbon-negative by 2030, as well as its ambition to remove all of the CO2 the company has ever emitted by 2050.

Heirloom is a world-leading provider of Direct Air Capture technology and operates the only Direct Air Capture facility in the United States that is permanently storing CO2. The company’s technology uses the natural properties of limestone to capture CO2 pollution from the atmosphere and permanently store it in a range of ways, including in concrete. By accelerating limestone’s natural ability to absorb CO2 from the air from years to days, Heirloom is quickly building a runway to low-cost CO2 removal at the gigaton-scale.

Combined with rapid decarbonization efforts, the suite of technologies that remove atmospheric CO2 are essential to limit global temperature rise to the Paris Agreement’s 1.5-degree Celsius target.

About Heirloom

Heirloom builds low-cost Direct Air Capture technology that will permanently remove CO2 at a billion-ton scale.  Our technology rapidly accelerates the natural processes that enable limestone to absorb CO2 from the air from a timespan of years to days.  Heirloom has the only Direct Air Capture facility in North America permanently capturing CO2, and its customers are the world’s biggest buyers of carbon removal including Microsoft, Stripe, Klarna, Shopify and more. Heirloom is funded by Bill Gates’ Breakthrough Energy Ventures, Carbon Direct Capital Management, Ahren Innovation Capital, Prelude Capital, Lowercarbon Capital, Microsoft’s Climate Innovation Fund and others.