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Key Impact Points:
- Major Investment: Bank of America’s $205 million deal is one of the largest carbon capture investments, reflecting confidence in the future of climate tech.
- Pioneering Carbon Capture: The North Dakota project captures 200,000 metric tons of CO2 annually, equivalent to the emissions of 42,000 cars.
- Strategic Tax Credits: This first-of-its-kind tax credit deal may pave the way for more investments in carbon capture, supporting industries that cannot easily decarbonize.
Bank of America’s Carbon Capture Deal
Bank of America is making a significant move into carbon capture, investing $205 million in a first-of-its-kind tax credit deal with Harvestone Low Carbon Partners. The funding is tied to an ethanol plant in North Dakota that captures 200,000 metric tons of carbon annually—equivalent to the emissions of 42,000 gas-powered cars.
Why This Matters
Carbon capture has struggled historically but is now gaining traction thanks to the 2022 climate law, which expanded tax credits for capturing and storing emissions. Industries unable to easily switch to renewables see carbon capture as a vital solution.
“There has to be an element of trying to address the emitters that are in the market today and helping them decarbonize,” said Noah Zerance, Bank of America’s director of sustainable finance.
Strategic Confidence
Bank of America’s investment reflects a bet on both the longevity of the North Dakota plant and the potential for sustained policy support. The tax credits available through the deal give investors confidence, despite the volatility of government policies.
Overcoming Hurdles
Ethanol plants like Harvestone’s are ideal for carbon capture since CO2 is easier to trap. North Dakota’s ability to issue its own carbon storage permits accelerates the process—nine months compared to years under the EPA. Local geology eliminates the need for lengthy pipelines, another common barrier.
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“To have a successful project speaks to the ability for us as an industry and as a nation to do these types of initiatives,” said Jeff Zueger, Harvestone’s CEO.
Looking Ahead
Harvestone plans two additional carbon capture projects in North Dakota and Indiana, with the potential for more funding as the market grows. The new clean-fuels tax credit rules, still being finalized, could further enhance their business model.
In case clean-fuel subsidies prove more lucrative, Bank of America has positioned itself to purchase those credits instead, showcasing flexibility and forward-thinking in its investment strategy.
This landmark deal could signal a turning point for carbon capture, attracting more capital and addressing emissions from hard-to-decarbonize sectors.