Occidental Acquires Carbon Removal Startup Holocene

Occidental Acquires Holocene: Expanding Direct Air Capture Portfolio

Occidental Petroleum Corporation has completed the acquisition of Holocene, representing its second investment in a direct air capture (DAC) startup within a two-year period.

This transaction was facilitated through Oxy Low Carbon Ventures, a division of the energy company, with the financial terms remaining confidential. Initial reports regarding the acquisition were published by HeatMap.

Holocene’s Innovative Carbon Removal Technology

Holocene was actively developing its unique carbon removal process, which utilizes amino acids. A significant milestone was reached in September with a $10 million agreement with Google to provide 100,000 metric tons of carbon removal services by the early 2030s.

The agreed-upon price of $100 per metric ton was considerably more competitive than current market rates. Presently, the cost of directly capturing carbon dioxide from the atmosphere is estimated to be approximately $600 per metric ton.

Strategic Implications for Occidental

Occidental’s focus on carbon capture technology is closely linked to the practice of enhanced oil recovery (EOR). This involves injecting CO₂ into underground reservoirs to boost oil production.

In 2023, the company demonstrated its commitment to this field by acquiring Carbon Engineering for $1.1 billion. This latest acquisition further solidifies its position in the DAC sector.

According to a statement provided to HeatMap by an Occidental representative, the company intends to integrate Holocene’s technology into its ongoing direct air capture research and development efforts.

Government Incentives and the Inflation Reduction Act

Direct air capture projects are eligible for tax credits as outlined in the Inflation Reduction Act. The specific amount of the incentive is contingent upon factors such as the use of renewable energy sources and the ultimate application of the captured carbon dioxide, including its potential use in enhanced oil recovery.

Here's a breakdown of key factors:

• Zero-Emission Power: Utilizing power sources that produce no emissions impacts the credit amount.
• Carbon Utilization: The method of utilizing the captured CO₂, such as EOR, influences the incentive received.