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illuminem summarizes for you the essential news of the day. Read the full piece on Financial Times or enjoy below:
🗞️ Driving the news: Microsoft and Occidental Petroleum have signed a landmark carbon credit deal worth hundreds of millions to offset the surge in energy consumption due to AI expansion
• Occidental will sell 500,000 carbon credits to Microsoft over six years, marking the largest deal of its kind. This agreement allows Microsoft to pay for the removal and storage of carbon from the atmosphere
🔭 The context: The tech industry's AI-driven energy demands have caused a significant rise in emissions, with Microsoft's emissions increasing by nearly a third since 2020
• Google also reported a nearly 50% rise in emissions since 2019 due to AI infrastructure expansion
• Microsoft aims to be carbon negative by 2030, while Google targets net-zero emissions by the same year
🌍 Why it matters for the planet: The deal emphasizes the necessity of innovative solutions like direct air capture (DAC) to manage and reduce greenhouse gases
• As a nascent technology, DAC has potential but faces criticism for its high costs and energy use
• Effective implementation could play a crucial role in combating climate change
⏭️ What's next: Occidental's Stratos project, set to be the world's largest DAC facility, will generate the credits for Microsoft starting next year
• The deal could pave the way for more large-scale carbon credit agreements as the tech sector seeks sustainable growth
• Future use of captured carbon for enhanced oil recovery remains a possibility
💬 One quote: "We don’t see DAC as trying to solve any company’s entire portfolio of emissions," said Michael Avery, CEO of Occidental's carbon management subsidiary, 1PointFive
📈 One stat: Recent estimates put the cost of DAC credits at about $800-$1,200 per tonne of carbon emitted, though Occidental aims to operate at $400-$630 per tonne
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