BMO Financial Group pre-purchased the permanent removal of 1,000 tons of carbon dioxide from the atmosphere through direct air capture (DAC) technology. The purchase was facilitated via London-based climate solutions business BeZero Carbon, and the carbon removal is planned to be delivered by a large-scale facility utilizing Canadian company Carbon Engineering’s (CE) DAC technology.
This news builds on BMO’s membership in the Net-Zero Banking Alliance (NZBA), a global network of 94 banks from 39 countries. The global sustainability-focused banking initiative reinforces member banks’ commitments to help finance the climate transition and support public and private sector collaboration to reach net zero by 2050. Members who join the alliance sign a commitment to take a robust approach to the role of offsets in transition plans. According to the NZBA’s commitment statement, this means chosen offsets should be restricted to carbon removals and deployed to balance residual emissions when viable options to eliminate the emission are limited.
“As part of our climate ambition and our purpose to boldly grow the good in business and life, BMO is committed to net zero in our own operations and to being our clients’ lead partner in their transition to a net zero future,” Michael Torrance, chief sustainability officer at BMO Financial Group, said. “We’re pleased to be working with BeZero and Carbon Engineering on high-integrity, large scale climate solutions such as direct air capture and to be the first bank to do so. By doing so, we’re supporting the growth of a new market for direct air capture and associated offsets, which will be critical for achieving ambitious Paris aligned 1.5C goals and going past net zero to being net negative [greenhouse gas] emissions.”
To help organizations like BMO evaluate offsetting options, BeZero gives customers access to its BeZero Carbon Rating (BCR) framework. The BCR framework assesses solutions available in the voluntary market with an evidence-based risk assessment of the efficacy of industry accredited carbon removal and offset solutions. It does this by assigning ratings that span AAA+ to A, taking several risk factors into consideration, including permanence, additionality and over-crediting. Carbon Engineering’s DAC technology qualified for the AAA+ rating.
“Carbon removal technology such as direct air capture needs early adopter customers to accelerate deployment scale,” Tommy Ricketts, CEO of BeZero Carbon, said. “This purchase by BMO is a landmark moment for the future of direct air capture and a strong signal to the market that this technology should become a critical part of net zero infrastructure.”
Carbon dioxide removal through DAC with permanent geologic storage delivers the physical removal of carbon dioxide from the air, essentially reversing the emissions process. By decoupling the capture of carbon dioxide from the source of the emission, it can be used to counteract any carbon dioxide emission from anywhere in the world and from any point in time.
“The world is witnessing an overwhelming and necessary surge in net-zero commitments,” Steve Oldham, CEO of Carbon Engineering, said. “At the same time, it’s critical to form and uphold transparent, science-based standards for meeting these commitments and we’re pleased to see industry leaders like BeZero Carbon and BMO working together to do this. Solutions like Carbon Engineering’s direct air capture technology are feasible and available today to support businesses and governments in their sustainability plans to meet these commitments.”
BMO’s carbon removal units are pre-purchased and reserve capacity, as development of DAC facilities is ongoing. The first commercial facility to utilize Carbon Engineering’s DAC technology is targeted to be operational in 2024. It is being developed in the United States by 1PointFive and is expected to capture up to 1 million tons of atmospheric carbon dioxide annually.
