Boeing is partnering with Equatic, a Los Angeles-based startup that removes carbon from the ocean, in a first-of-its-kind deal to buy a massive amount of carbon credits and green hydrogen that’s likely worth at least $50 million.
Under the five-year arrangement, Equatic will remove 62,000 metric tons of carbon dioxide for the aerospace giant and supply it with 2,100 metric tons of “green” hydrogen generated as a byproduct of its technology. Equatic declined to provide a value for the agreement, though it’s more than double the size of a 25,000-ton CO2 elimination contract competitor Climeworks just announced with JP Morgan Chase. Climeworks values that deal—which doesn’t include hydrogen fuel—at more than $20 million. (The financial company is also contracting with startup Charm Industrial to put captured carbon underground as “bio-oil” made with agricultural scraps.)
The deal arose from plans for a technology partnership between the companies related to large-scale CO2 removal facilities Equatic is developing, said Lorenzo Corsini, the startup’s principal advisor, who declined to discuss specific details.
“This catalyzes the development of the technology and it’s a leap of faith by Boeing,” Corsini told Forbes. Boeing is “serious about removing carbon dioxide from the atmosphere and knows that they need to invest upfront to do this.”
Equatic recently spun out of UCLA’s Institute for Carbon Management and is part of a new wave of companies with a mission to slow the buildup of climate-warming CO2 by pulling it out of the atmosphere. Unlike the approach of rivals such as Climeworks, Charm and CarbFix, which absorb CO2 from the ambient air and store it, Equatic’s focus is using electrolysis to remove CO2 from seawater and convert the carbon into seashell-like material that it believes won’t harm the aquatic environment. Hydrogen, which is increasingly seen as a promising clean fuel for industrial applications and transportation, is also a byproduct.
“Reaching aviation’s sustainability goals will require a multi-faceted approach and Boeing sees immense value in Equatic’s technology,” Sheila Remes, Boeing’s vice president of environmental sustainability, said in an emailed statement. “We are excited to partner with Equatic on both green hydrogen feedstock and carbon dioxide removal.”
Equatic focuses on oceans as they’re Earth’s largest CO2 reservoir. Founder Gaurav Sant, director of the UCLA initiative, believes its approach amplifies natural processes and is the cheapest, most energy-efficient way to achieve gigaton-level CO2 removal and produce hydrogen from nonpolluting sources. The amount of CO2 removed is also measurable “down to the gram,” the company said.
(For more on Equatic see An L.A. Startup Aims To Turn The Oceans Into A CO2 Sponge And ‘Green’ Hydrogen Machine)
That’s important because of growing skepticism around carbon offsets, such as those sold by Verra, the biggest certifier of carbon credits. David Antonioli, the non-profit’s CEO, stepped down this month after acknowledging that a significant portion of credits it’s approved is not based on reality, according to a report by The Guardian.
Equatic began operating pilots in Los Angeles and Singapore in April to demonstrate the technology. A larger “sub-commercial” facility is set to open as soon as late next year in Singapore, integrated within an existing desalination plant. It will be able to remove 3,500 metric tons of CO2 annually. Equatic then wants to have its first commercial plant running in about three years with the capacity to remove 100,000 metric tons of CO2 and generate 3,500 tons of hydrogen annually. That’s about three times the size of Climeworks’ Mammoth plant under construction in Iceland, which will be able to capture and store 36,000 tons of CO2 annually when fully operational.
The company is in the process of raising $100 million for research and plant construction costs. It’s already taken in $30 million from backers including the Chan Zuckerberg Initiative, Anthony and Jeanne Pritzker Family Foundation, Grantham Foundation for the Protection of the Environment, National Science Foundation, Singapore’s Temasek Foundation, PUB: Singapore’s National Water Agency and the Energy Department.
Corsini estimates Boeing’s purchase agreement is the fifth-largest CO2 elimination deal that’s been announced. Equatic had previously announced that financial services company Stripe is buying CO2 offset credits from its small pilot facilities. Boeing will get credits from the Singapore plant that is to open by early 2025 and Equatic’s first commercial facility, the location of which hasn’t been announced.
“Because we’re still engineering and building those plants, we haven’t started really reaching out more systematically to clients to fill the pipeline,” Corsini said. In addition to Boeing, “we also have a number of other partners. Expect some more announcements soon on that,” he said, declining to elaborate.