Historic Direct Air Capture Agreement Signals Commercial Breakthrough
In a landmark development for the carbon removal industry, JPMorgan Chase has announced a 10-year agreement to purchase 50,000 metric tons of carbon dioxide removal credits from 1PointFive, a subsidiary of Occidental Petroleum. The deal represents one of the largest commercial offtake agreements for Direct Air Capture (DAC) technology to date and signals growing corporate interest in permanent carbon removal solutions.
The STRATOS Facility: World's Largest DAC Plant
The carbon removal credits will be produced at 1PointFive's STRATOS facility in Ector County, Texas, which is scheduled to begin commercial operations later this year. When fully operational, STRATOS will be the world's largest DAC plant, capable of removing up to 500,000 tonnes of CO2 annually. The facility recently secured the first-ever Class VI permits from the U.S. Environmental Protection Agency for carbon sequestration, allowing captured CO2 to be stored in geologic formations more than one mile underground.
'This agreement represents a significant step in commercial-scale carbon removal deployment,' said a 1PointFive spokesperson. 'We're establishing a market for high-quality, durable carbon removal credits while supporting critical infrastructure development.'
Pricing and Energy Challenges
While specific pricing details of the JPMorgan Chase deal remain confidential, industry analysts suggest DAC removal credits currently range from $500 to $1,000 per tonne. The high costs reflect the significant energy requirements of DAC technology, which uses large-scale fans to move air through chemical filters that capture CO2, followed by energy-intensive processes to separate and compress the captured carbon.
According to a 2025 market analysis, the DAC sector faces critical challenges in reducing costs to commercially viable levels. The report notes that megatonne-scale deployment will require prices below $200-300 per tonne, with capital expenditure costs needing to fall below $1,000 per tonne of annual capacity.
Investor Backing and Market Dynamics
The STRATOS project has attracted substantial investment, including $550 million from BlackRock, highlighting growing institutional interest in carbon removal technologies. Occidental Petroleum, the parent company of 1PointFive, has positioned itself as a leader in carbon management, leveraging its expertise in geology and subsurface engineering for carbon sequestration.
However, the deal has raised questions about corporate climate strategies. JPMorgan Chase, while investing in carbon removal, remains the world's largest financier of fossil fuel expansion, having invested approximately $200 billion in new oil and gas projects since 2021. 'We see this DAC agreement as part of our comprehensive approach to addressing climate change,' stated a JPMorgan Chase representative. 'These credits will help mitigate our operational emissions as we work to reduce our financed emissions over time.'
Scaling Challenges and Future Outlook
The International Energy Agency projects that DAC needs to scale dramatically to meet climate goals, requiring 65 million tonnes of CO2 removal by 2030 compared to current global capacity of just 10,000 tonnes. The STRATOS facility alone will increase global DAC capacity by 50 times when operational.
Energy inputs remain a significant challenge for DAC scalability. Most facilities require substantial electricity to power fans and heating systems, with optimal operations depending on access to low-cost renewable energy. The BloombergNEF analysis emphasizes that DAC plants need high utilization rates to amortize steep capital costs, especially when using intermittent renewable energy sources.
Despite these challenges, the JPMorgan Chase-1PointFive agreement represents a milestone in carbon removal commercialization. 'This is exactly the type of corporate commitment we need to scale carbon removal technologies,' commented a climate technology analyst. 'While questions remain about cost and energy requirements, these early commercial deals are essential for driving innovation and reducing prices through scale.'
The deal comes as the carbon removal market shows signs of consolidation, with just three companies—1PointFive, Climeworks, and Heirloom—accounting for 80% of total DAC credits sold between 2022 and mid-2025. Microsoft remains the leading buyer of carbon removal credits, having contracted 833,000 tonnes during this period.
As STRATOS prepares to begin operations, the industry will be watching closely to see if this commercial-scale facility can deliver on its promise of cost-effective carbon removal while navigating the complex energy and economic challenges that have historically constrained DAC deployment.