Private markets firm Partners Group has signed a 13-year agreement with Climeworks – a direct air carbon capture business – to remove 7,000 metric tons of carbon dioxide from the atmosphere.
This will be the first “technological solution” Partners Group will use as part of its plan, announced last year, to reach net zero greenhouse gas emissions by 2030.
“While a priority of the programme will be to reduce the firm’s overall emissions, removing residual emissions via capture and storage of atmospheric CO2 will also play a role in achieving net zero”, the firm said in a statement on Wednesday. It sits alongside the firm’s “growing portfolio of nature-based solutions, such as reforestation, which also contribute to enhancing biodiversity”, the firm continued.
According to Partners Group’s sustainability report, its greenhouse gas emissions – across Scopes 1, 2 and 3 – totalled 5,133 metric tons in 2021. Its 2022 data will be published next week.
Climeworks is a portfolio company of Partners Group, the latter having led a SFr600 million ($649 million; €592 million) financing round in the business alongside GIC in April 2022. It’s clients include Microsoft, Swiss Re – also an investor – Stripe and Boston Consulting Group, it told New Private Markets last year.
Direct air capture technology, in which carbon dioxide is sucked out of the atmosphere, mixed with water, and then pumped underground, is viewed as an important component of reaching net zero. Critics warn that it must not be treated as panacea.
Climeworks is a Swiss company and operates the world’s largest direct air capture facility, called Orca, in Iceland. Last year the company broke ground on a second, larger plant, also in Iceland.
“High quality carbon removal must be scaled to gigaton level by 2050,” said Christoph Gebald, co-founder and co-CEO of Climeworks, “Multi-year agreements like this one are a crucial lever. Partners Group’s commitment to high-quality carbon removals underlines the leading role of the financial services industry in this scale-up.”
The contract “sends a strong signal, which will hopefully inspire more companies to take action on carbon removal”, continued Gebald.
Partners Group is not alone acting as both investor in and client of carbon capture businesses.
Verdane, an Oslo-headquartered private equity firm, invested in direct air capture company Heirloom’s $53 million Series A funding round in March 2022, the firm told New Private Markets. The investment was made from Verdane’s charitable foundation. “It’s not a commercial investment,” said Bjarne Kveim Lie, Verdane’s chief investment officer, “It’s almost symbolic, to show support.”
Verdane has signed 10-year contracts with Climeworks, Heirloom and Neustark – which stores carbon dioxide from agriculture in concrete – to offset the carbon footprint of the firm’s operations. “The catalytic effect is more as a customer. We want to be catalytic, early customers for an important technology,” said Kveim Lie. “Carbon capture is an immature technology that we are helping to bring to maturity by effectively paying a lot for our CO2.”