B.C.-based carbon capture company acquired for $1.48B
Officials say the acquisition could rapidly advance direct air capture technology breakthroughs.
Carbon Engineering’s Direct Air Capture Innovation Centre is located in Squamish, B.C. – Carbon Engineering
Key Takeaways:
- Carbon Engineering will be acquired by a subsidiary of international energy company Occidental.
- Carbon Engineering’s research and development activities and Innovation Center will remain in Squamish, B.C.
- Occidental’s subsidiaries are currently building the world’s largest direct air capture plant in Texas. It is expected to be commercially operational in mid-2025.
The Whole Story:
Squamish-based green technology company Carbon Engineering has been purchased for $1.48 billion.
International energy company Occidental announced that a wholly owned subsidiary has entered into a definitive purchase agreement to acquire all the outstanding equity of Carbon Engineering Ltd. for total cash consideration of approximately $1.48 billion.
The purchase will be made in three approximately equivalent annual payments, with the first at closing. This transaction is expected to close before the end of 2023, subject to Canadian court reviews, Canadian and U.S. regulatory approvals and other customary closing conditions.
Occidental has been working with Carbon Engineering on direct air capture (DAC) deployment since 2019.
Acquiring Carbon Engineering aligns with Occidental’s integrated net-zero strategy and provides Occidental, through its 1PointFive subsidiary, the opportunity to rapidly advance DAC technology breakthroughs and accelerate deployment of DAC as a large-scale, cost effective, global carbon removal solution. Carbon Engineering’s DAC-based climate solutions utilize standardized processes and proven industrial equipment.
“We expect the acquisition of Carbon Engineering to deliver our shareholders value through an improved drive for technology innovation and accelerated DAC cost reductions,” said Occidental president and CEO Vicki Hollub. “The technology partnership also adds new revenue streams in the form of technology licensing and royalties. Importantly, the acquisition enables Occidental to catalyze broader development partnerships for DAC deployment in the most capital efficient and valuable way.”
Upon closing, Carbon Engineering would become a wholly owned subsidiary of Oxy Low Carbon Ventures. Carbon Engineering’s personnel will continue to drive ongoing DAC technology development efforts and work closely with the Occidental and 1PointFive teams to bring DAC solutions to market. Carbon Engineering’s research and development activities and Innovation Center will remain in Squamish, B.C.
“We have always believed that global partnerships and cross-industry collaboration would be required to deploy DAC infrastructure at the scale required to make a climate-relevant impact. Carbon Engineering and Occidental have been working increasingly close together for the past five years to address the CO2 problem, making Occidental a trusted and committed partner for this next chapter in Carbon Engineering’s journey,” said Carbon Engineering CEO Daniel Friedmann. “At the core of this deeper relationship is the commitment to invest in the development of our technology here in Canada, and the global reach to accelerate implementation of DAC-based climate solutions in the U.S. and around the world.”
1PointFive is currently building Stratos, the world’s largest DAC plant, which is expected to be commercially operational in mid-2025, in Ector County, Texas. Occidental and Carbon Engineering are also adapting Stratos’ front-end engineering and design study for a DAC plant to be built at King Ranch in Kleberg County, which is part of the South Texas DAC Hub that was selected to receive a grant from the U.S. Department of Energy’s Office of Clean Energy Demonstrations.
