JPMorgan Chase is pitching itself as the bank of choice for companies and investors seeking access to the carbon-credit markets, as the firm solidifies a new long-term agreement with a start-up active in the energy-intensive pulp and paper industry.
The bank and CO280, a Vancouver-based company that funds technology to keep carbon dioxide from being emitted into the atmosphere, signed a carbon-removal offtake agreement connected to a project to capture and store carbon emissions from a mill in the U.S. Gulf Coast.
Under the agreement, CO280 will put together a system to capture carbon emissions emitted by the paper mill, liquefy that carbon, and then pump it through a pipeline to an underground storage site. JPMorgan plans to purchase credits for 450,000 metric tons of carbon dioxide-equivalent for below $200 apiece over the course of 13 years, according to the companies.
JPMorgan’s agreement with CO280 builds on a nonbinding memorandum of understanding between the two companies in 2023, when the bank invested more than $200 million to purchase credits from multiple firms.
Retrofitting mills to capture carbon dioxide “is a multi-billion-dollar market opportunity for the U.S. forest products industry,” JPMorgan Chief Risk Officer Ashley Bacon said in a statement to Barron’s. “The additional revenue stream from selling carbon credits enables mill owners to invest in their business and support local job creation.”
The contract underscores an ambition at the largest U.S. bank to invest in carbon markets and win business from clients in search of advice and capital, even as American corporations broadly retreats from sustainability pledges under the Trump administration.
At the same time, carbon markets are still taking shape and some experts are skeptical of their efficacy. Voluntary carbon market pricing is opaque, while revelations of lax carbon-accounting standards and charges of fraud have upended the wider market several times in recent years.
Yet even under Trump, financial firms around the world are making big, yearslong bets on ways to facilitate economies’ transitions to a sustainable, lower-carbon environment. JPMorgan and its competitors walk a fine line: Seizing on investment and advisory opportunities while trying to avoid alienating clients and shareholders who disagree with their approach.
Carbon capture technology has been used in the oil-and-gas industry for years, but it’s still a rarity at industrial plants like paper mills, which create CO2 during operations. To make paper products, mills cook wood chips until the useful cellulose fibers separate from the resins that hold the wood together, forming a substance called black liquor. Burning the black liquor creates steam that helps generate electricity for the factory, but it also emits considerable amounts of carbon dioxide.
That’s where CO280 comes in. It uses technology designed by a venture between the energy-services provider SLB and Norwegian firm Aker Carbon Capture, according to CO280 Chief Executive Jonathan Rhone, which diverts and filters out that stream of CO2, where it will then be liquefied and directed through a 35-mile pipeline to an underground storage site. Once it’s pumped underground the liquid solidifies. It’s expected to stay secure underground for millennia instead of being emitted into the atmosphere, where it would have exacerbated global warming....
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"I don't know if climate change is caused by burning coal or sun flares or what," said the Moscow-based carbon cowboy. "And I don't really give a shit. Russia is the most energy inefficient countryaround, and carbon is the most volatile market ever. There's a lot of opportunity to make money."
