Oxy Low Carbon Ventures, a subsidiary of Occidental, has acquired Holocene, a direct air capture startup, marking the second such acquisition by the fossil fuel company in two years. The deal's financial terms remain undisclosed, but it underscores Occidental's commitment to developing carbon removal technology and its enhanced oil recovery capabilities.

Holocene had been making strides in its amino acid-based carbon removal technology, securing a $10 million deal with Google in September to deliver 100,000 metric tons of carbon removal by the early 2030s. Notably, the price per metric ton was significantly lower than what competitors could offer today, at $100 per metric ton compared to the estimated $600 per metric ton for direct air capture.

Occidental's interest in direct air capture stems from its application in enhanced oil recovery, a technique where CO2 is injected underground to stimulate oil wells. The company's acquisition of Carbon Engineering in 2023 for $1.1 billion was a significant step in this direction. With Holocene's technology, Occidental aims to further its direct air capture research and development, according to a company spokesperson.

The acquisition also highlights the growing importance of direct air capture in the fight against climate change. The technology qualifies for tax credits under the Inflation Reduction Act, with the final incentive dependent on whether the equipment uses zero-emission power and if the captured carbon dioxide is used for enhanced oil recovery. This could make direct air capture a more viable and cost-effective solution for companies looking to reduce their carbon footprint.

The deal also raises questions about the role of fossil fuel companies in the development of clean energy technologies. While Occidental's acquisition of Holocene and Carbon Engineering demonstrates its commitment to reducing emissions, critics may argue that the company's primary focus remains on extracting and producing fossil fuels. As the energy landscape continues to evolve, it will be important to monitor the impact of such acquisitions on the development of clean energy solutions.

In conclusion, Occidental's acquisition of Holocene marks a significant step forward in the development of direct air capture technology and its application in enhanced oil recovery. As the energy sector continues to grapple with the challenges of climate change, such deals will play an increasingly important role in shaping the future of clean energy.