Amazon will pay an oil company to help it meet climate goals


Amazon will pay to take some carbon dioxide out of the atmosphere, but its carbon footprint is still huge.

Share this story

A row of people wearing suits hold up shovels at a construction site.

Executives hold shovels during a groundbreaking ceremony at the Occidental Petroleum and 1PointFive Direct Air Capture (DAC) plant in Ector County, Texas, on April 28th, 2023. 
Photo by Jordan Vonderhaar / Bloomberg via Getty Images

Amazon is the latest tech giant to buy into the idea of filtering carbon dioxide out of the air as a way to combat climate change. The company is backing an oil giant, Occidental Petroleum, to help it do just that. Amazon announced today that it plans to purchase 250,000 metric tons of carbon removal from Occidental subsidiary 1PointFive.

This is the latest in a stream of announcements from Big Tech companies turning to emerging carbon removal technologies to help them meet their climate goals. Sucking CO2 out of the atmosphere is one way to try to undo the damage caused by pollution companies have already created. But much of the carbon removal industry has deep ties to oil and gas. And when companies like Amazon pay to deal with their pollution this way, it doesn’t necessarily stop them from continuing to create more of the pollution by burning fossil fuels.

1PointFive, the subsidiary of Occidental, has plans to build massive industrial facilities, called direct air capture (DAC) plants, in Texas that are supposed to pull carbon dioxide out of the atmosphere. Amazon says that the CO2 will then be sequestered underground to keep it from escaping back into the atmosphere. Occidental, however, has also used carbon removal to sell what it calls “net-zero oil,” produced by shooting CO2 into the ground in order to push out hard-to-reach oil reserves.

The Biden administration has arguably been just as jazzed about carbon removal as tech companies have. The Department of Energy (DOE) chose to fund a project 1PointFive is developing at King Ranch in Texas as the site of one of the first “hubs” for direct air capture plants in the US. The Bipartisan Infrastructure Law passed in 2021 earmarks $3.5 billion in federal funding for at least four DAC hubs across the US.

Last week, Microsoft announced that it would purchase 315,000 metric tons of carbon dioxide removal from another hub the DOE is funding in Louisiana. That project is led by California startup Heirloom and Swiss company Climeworks. Climeworks was one of the first companies in the world to build CO2-sucking industrial plants and has already captured an unspecified amount of CO2 for Microsoft, Stripe, and Shopify at its facility in Iceland.

On top of its carbon removal purchase from Occidental’s 1PointFive, Amazon also said today that it is “making an investment” in another California-based DAC company called CarbonCapture that will provide Amazon with credits worth 100,000 tons of carbon removal. CarbonCapture is building another big direct air capture plant in Wyoming. But there’s a key difference. Both CarbonCapture and Climeworks have previously told The Verge that they have no plans to use their technology in tandem with oil production in the way that Occidental has.

Amazon’s announcement today is a pretty big purchase for the burgeoning carbon removal industry, but it still represents a fraction of the company’s greenhouse gas emissions. By The Verge’s estimate, Amazon’s purchase from 1PointFive could add up to as much as $150,000,000 (direct air capture typically costs around $600 per ton of CO2, although policymakers are trying to bring that price down with incentives). Occidental also plans to use Amazon Web Services to “analyze real-time performance data and optimize operations” at its future DAC plants.

The Wall Street Journal estimated that Microsoft’s purchase from Heirloom last week cost around $200 million. While that might be a lot of money, the amount of carbon dioxide Microsoft and Amazon are paying to capture still pales in comparison to how much climate pollution they continue to produce.

Amazon says its commitment to pay 1PointFive for 250,000 metric tons of carbon removal over a decade is equivalent to the carbon sequestered by a forest roughly half the size of Rhode Island. For comparison, Amazon pumped out more than 71 million metric tons of carbon dioxide last year alone. The company pledged in 2019 to reach net zero greenhouse gas emissions by 2040. But, according to its most recent sustainability report, the company’s carbon footprint has increased by about 39 percent since 2019, when it made that climate commitment.