JPMorgan Chase invests big in carbon removal

The backstory: As you may already know, the world is in a jam, caught in the grips of too-high emissions and a looming climate crisis. Everyone's talking about slashing emissions, but experts are shouting, "Hey, we also need to suck out that pesky carbon dioxide (CO2) from the air."

Now, why is this so important? Well, if we want to achieve those ambitious global goals outlined in the Paris climate agreement (you know, the pact where countries unite to fight climate change and avoid a fiery disaster), these methods are seen as the secret sauce to getting there.

More recently: In April, the US government introduced a massive US$3.5 billion grant program tailor-made for companies rocking something called Direct Air Capture (DAC) technology. DAC tech is like a superhero in the carbon dioxide removal world. It swoops in, armed with its mighty chemical powers, snatching CO2 right out of thin air. What happens next? Well, that captured carbon dioxide can be stored underground or put to use in mind-boggling ways, like creating concrete or fuel for planes.

But not everyone's popping champagne bottles over this tech. Some environmental groups are raising eyebrows, fearing that companies might use carbon removal as a sneaky loophole to dodge emissions reductions. And they're also worried about the fairness of it all, especially for marginalized communities in this carbon removal game.

The development: Big-shot US bank JPMorgan Chase has just made a mega commitment. It's planning to fork over US$200 million on carbon dioxide removal credits to show its dedication to sustainability. Now there’s a difference between more traditional carbon offset credits and carbon removal – first, carbon removal is more expensive. Secondly, while a carbon offset might reduce future emissions, carbon removal actually removes existing CO2 in the atmosphere.

Many scientists believe that simply reducing emissions might not be enough to tackle climate change. And, a lot of companies that can’t yet figure out how to cut their own emissions can better compensate for the damage by contributing to these different efforts to pull CO2 from the air.

So, JPMorgan Chase is on a mission to level up and find ways to suck up 800,000 tons of emissions by supporting carbon removal technologies, as its chief risk officer, Ashley Bacon, made clear. It’s teaming up with several projects in the fight against carbon emissions. One is Climeworks, a Swiss company that's all about fancy-schmancy DAC technology. Another is Charm Industrials, which uses a bio-oil technique to bury carbon-rich liquid from underground plant leftovers. This liquid helps plants store CO2 permanently rather than releasing it back into the atmosphere. Together, these deals will help JPMorgan Chase match every ton of its operational emissions that it can’t yet cut on its own by 2030.

Key comments:

“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 at JPMorgan Chase, in a statement.

“We’re first reducing emissions to minimize our environmental impact and then addressing what we can’t yet abate,” said Brian DiMarino, JPMorgan Chase's head of operational sustainability.

“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 of JPMorgan Chase in a written statement.

"This industry is fragile right now, but all the arrows are lined up in the right direction. Now, we have to do our job, which is to put iron in the ground and start taking out meaningful amounts of CO2 from the atmosphere," said Jonas Lee, chief commercial officer for CarbonCapture, to Reuters last month. "Hopefully, that will help in a virtuous cycle that galvanizes even more support from corporations buying carbon credits and maybe from state and local governments."