Morgan Stanley Strikes Deal with Climeworks to Eliminate 40,000 Tonnes of CO2

Morgan Stanley, a leading U.S. investment bank, has signed a significant agreement with Climeworks, a direct air capture (DAC) specialist, to purchase 40,000 tons of carbon removal. This long-term contract, extending through 2037, injects vital capital into Climeworks and supports its role as the technology provider for the Project Cypress DAC hub, poised to receive up to $600 million in support from the DOE.

While the specific cost per ton remains undisclosed, Climeworks has previously indicated prices ranging from $1,000 to $1,200 per ton. However, with the recent unveiling of its Generation 3 technology, Climeworks anticipates reducing costs to $400-600 per ton by 2030. This deal marks Climeworks'Climeworks' second-largest contract to date and aids Morgan Stanley in its strategic goal to achieve net-zero financed emissions by 2050.

“As a financial institution, Morgan Stanley plays an important role in helping to direct capital toward low-carbon solutions,” says Jessica Alsford, Morgan Stanley’s Chief Sustainability Officer. “Through our partnership with Climeworks, we are supporting the development of technology that can help drive the global economy’s transition to a more sustainable future.”

Climeworks has demonstrated consistent progress with Project Cypress, recently announcing a new partnership with CapturePoint Solutions to manage the transportation and storage of captured CO2. This collaboration will facilitate the transfer of CO2 from the DAC facility in Calcasieu Parish to secure storage in Class VI wells located in the Central Louisiana Regional Carbon Storage Hub (CENLA Hub) within Vernon and Rapides Parishes, managed by CapturePoint.

Additionally, earlier in October, Morgan Stanley proudly announced the closure of its 1GT climate-focused private equity fund, securing $750 million in capital commitments. This fund is dedicated to investing in growth-stage carbon removal and reduction companies across North America and Europe, with a visionary target of achieving a one gigatonne impact on climate change by 2050.

“Investing in carbon removal is more than an environmental responsibility—it’s a strategic business move. By securing access to high-quality carbon removals now, companies position themselves ahead of the curve of future regulatory changes and competitive pressures. Orca and Mammoth represent just the beginning of a future trillion-dollar industry, and Morgan Stanley understands the benefits of entering the market today”,  says Christoph Gebald, co-founder and co-CEO of Climeworks.

Morgan Stanley Investment Management's Head of Climate Private Equity Investing and leader of the 1GT fund, Vikram Raju, highlighted the investor's recognition of the fund's dual focus on tangible climate impact and strong growth potential.