Carbon Capture Gets Boost from Major Bank of America Investment

Bank of America has committed $205 million to an ethanol producer in North Dakota, marking one of the largest investments ever in carbon capture technology. The Wall Street Journal reports that this deal, announced on September 5, 2024, is the first of its kind since the 2022 climate law increased tax credits for capturing and storing carbon underground.

The recipient of this substantial investment is Harvestone Low Carbon Partners, whose ethanol plant near Underwood, North Dakota, began capturing carbon in October 2023. According to The Wall Street Journal, the facility has the capacity to capture all of its carbon emissions, amounting to over 200,000 metric tons annually – equivalent to the emissions from about 42,000 gas-powered cars.

This investment represents a significant vote of confidence in carbon capture technology, which has faced challenges in the past but is increasingly seen as crucial for reducing emissions in hard-to-decarbonize industries. Noah Zerance, a director on Bank of America’s sustainable finance team, told The Wall Street Journal, “You can only do so much renewables build-out. There has to be an element of trying to address the emitters that are in the market today and helping them decarbonize.”

The deal is structured around tax credits, allowing Harvestone to access government subsidies even without generating substantial profits. Bank of America’s investment assumes the plant will continue operating for at least a decade and meet the criteria for these subsidies.

Harvestone’s CEO, Jeff Zueger, expressed optimism about the project’s success and its implications for the industry and nation. The company already has plans for two additional carbon-capture projects in North Dakota and Indiana.

The Wall Street Journal notes that this investment highlights a growing trend of climate-related business investments flowing into Republican-led states since the passage of the climate law. Carbon capture technology, which could benefit both oil companies and farmers, enjoys bipartisan support.

While carbon capture technology has faced skepticism due to past failures and its association with enhanced oil recovery, ethanol plants like Harvestone’s are considered promising due to the relative ease of trapping and storing their CO2 emissions.

As the carbon capture industry continues to evolve, this landmark investment from Bank of America could pave the way for more financial institutions to support similar projects, potentially accelerating the adoption of this emissions-reducing technology.