Occidental Petroleum said it agreed to sell emissions-offsetting carbon credits to jet-maker Airbus under a deal that advances the US oil producer's budding energy transition business, reported Reuters.
The four-year agreement sets the stage for Occidental to go ahead on an investment decision for what would be the world's largest plant designed to suck CO2 out of the air and bury it underground, helping to mitigate global warming.
The value of the agreement was not disclosed. Occidental has scheduled an investor update on its low carbon business for Wednesday.
Occidental said construction on its direct air capture (DAC) facility is expected to begin in the second half of this year in the Permian basin, the top US shale oil field in western Texas and southeastern New Mexico. The plant's location has not been disclosed.
The plant is expected to have a carbon removal capacity 100 times bigger than all 19 DAC plants currently operating worldwide combined, according to the International Energy Agency.
The potential cost of the project has not been disclosed. Construction was expected to take around two years.
Occidental's direct air capture facility has a goal of removing 1 MMtpy of CO2 from the atmosphere, equivalent to emissions from almost 200,000 cars. A project in Iceland able to remove emissions from 790 cars was considered the world's largest one year ago.
As MRC wrote previously, Occidental Petroleum's low-carbon unit said in May 2021 it plans to construct and operate a pilot plant that would use human-made carbon dioxide, instead of hydrocarbon-sourced feedstocks, to produce bio-ethylene. The pilot plant will be jointly developed by Occidental's venture capital arm, Oxy Low Carbon Ventures LLC, and bio-engineering startup, Cemvita Factory. It is expected to start functioning in 2022. Bio-ethylene is currently made from bio-ethanol, which is made from sugarcane.
Ethylene is the main feedstock for the production of polyethylene (PE).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,487,450 tonnes in 2021, up by 13% year on year. Shipments of all grades of ethylene polymers increased.
MRC