Charm Industrial Inks CO2 Removal Deal With TD Bank

Dive Brief:

• Carbon removal startup Charm Industrial announced a 10-year offtake agreement with TD Bank on Wednesday, marking the first step in the company’s expansion into the Canadian market.

• TD Bank will receive 44,000 metric tons of carbon credits over the course of the deal, with the 10-year term beginning in 2029, according to a press release shared with ESG Dive. Charm will deliver the credits through both biochar removals and bio-oil sequestration, and a portion of the removals will come directly from Charm Industrial’s future Canadian operations.

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• “We have an operation that's focused in the United States, and that's rapidly expanding, but there's a real need for what we're doing in Canada as well,” Charm Industrial Co-founder and CEO Peter Reinhardt, Co-founder and CEO of Charm Industrial told ESG Dive.
  

Dive Insight:

Charm Industrial primarily removes carbon dioxide from the atmosphere by converting biomass like food scraps, wood chips and animal waste into a carbon-rich oil that can be stored underground. However, the company has always co-produced biochar and began offering it as a separate carbon removal product last year, when Google signed what were called the “[largest biochar carbon removal deals to date]” at the time with Charm and India-based carbon removal company Varaha.

Charm Industrial was founded in 2017, and its Co-founder and Chief Scientist, Shaun Meehan, Co-founder and Chief Scientist of Charm Industrial, found success with bio-oil conversion and sequestration in 2020. The company’s first customers were Stripe, Microsoft and Shopify, Reinhardt said in an interview. Charm Industrial has since removed 11,666 metric tons of carbon dioxide equivalent as of Jan. 22, according to its public ledger.

The deal with TD Bank has been in the works for the “better part of a year, maybe longer,” according to the carbon removal company’s CEO. The Canada-headquartered financial institution plans to use the carbon credits to offset its own operational emissions, according to a blog from Harris Cohn, Chief Revenue Officer of Charm Industrial.

“This agreement reflects our commitment to supporting our clients’ strategic growth objectives while creating a positive impact for the communities we serve,” Tim Balombin, Head of U.S. Energy Investment Banking at TD Bank said in the release.

Charm Industrial sees Canada as “a leader on carbon removal policies,” due to an investment tax credit in policy mechanisms that support CO2 removal, Reinhardt said. Additionally, the country has a large number of orphaned legacy oil assets and a growing wildfire problem. Reinhardt said that forest thinning — which involves selectively removing trees from forests to reduce their density and would create biomass as a byproduct — could help reduce the fire intensity, and Charm Industrial’s carbon removal solution could help with both air quality and restoring ecosystems.

“There's an opportunity to solve several problems at once, between reducing forest fires, cleaning up old legacy oil assets and reducing atmospheric CO2 with bio-oil sequestration,” Reinhardt said.

When it comes to Charm Industrial’s U.S. operations, in addition to purchasing excess bio-oil well production capacity, the startup produces its own bio-oil in Colorado and stores it in Louisiana-based injection sites. Louisiana was chosen as a storage site due to the state’s geology, as well as the state regulators’ expertise with geologic carbon storage and relationship with the U.S. Environmental Protection Agency. The company’s buyers have grown to include Frontier Climate, JPMorgan Chase and Boeing, among others.

“There's been a really growing trend of buyers entering the market with the intent of helping, kind of, seed the carbon removal supply chain, so that it can be as big as it needs to be, in the 2030 to 2050 time range,” Reinhardt said.