Climeworks, a leading Swiss-based direct-air capture company, has signed a deal with Morgan Stanley to remove 40,000 tons of carbon dioxide from the atmosphere by 2037. This agreement will support Climeworks in scaling its carbon removal technology, particularly in the U.S.

Morgan Stanley’s purchase allows the bank to offset its corporate emissions by claiming credits from the removals. Direct-air capture is seen as a crucial tool for combating climate change, as it extracts carbon from the air rather than capturing emissions at the source, like traditional methods.

“As a financial institution, Morgan Stanley plays an important role in helping to direct capital toward low-carbon solutions,” said Jessica Alsford, Morgan Stanley’s Chief Sustainability Officer. “Through our partnership with Climeworks, we are supporting the development of technology that can help drive the global economy’s transition to a more sustainable future.”

The deal comes as Climeworks plans to establish a new carbon capture hub, Project Cypress, in Louisiana. This facility, which received over $50 million from the U.S. Department of Energy, is expected to have a capacity of nearly 200,000 tons annually. Climeworks’ co-founder and co-CEO, Christoph Gebald, emphasized the business case for investing in carbon removal early: “By securing access to high-quality carbon removals now, companies position themselves ahead of future regulatory changes and competitive pressures.”

This is Climeworks’ second-largest contract, following an 80,000-ton agreement with Boston Consulting Group. The company has been making strides in scaling its operations, including operating the world's largest direct-air capture plant in Iceland, known as Orca.