Occidental Buys Carbon Removal Startup Holocene to Advance Low-Cost Direct Air Capture

Oil and gas giant Occidental has acquired carbon removal startup Holocene, marking its second major investment in direct air capture (DAC) technology in as many years. The deal was executed through Occidental’s low-carbon subsidiary, Oxy Low Carbon Ventures, for an undisclosed sum, as first reported by HeatMap.

The acquisition adds to Occidental’s growing portfolio in carbon capture, following its $1.1 billion purchase of Carbon Engineering in 2023. Holocene becomes the latest piece in the company’s strategy to scale DAC, a technology that removes carbon dioxide directly from the atmosphere.

Holocene’s Breakthrough Technology

Holocene has been developing a proprietary DAC process using amino acid-based solvents, offering a promising alternative to traditional methods that are often energy-intensive and costly. The startup gained attention in September 2023 after securing a $10 million agreement with Google to deliver 100,000 metric tons of CO₂ removal by the early 2030s.

What set Holocene apart was its pricing—$100 per metric ton of carbon removal, a dramatic reduction compared to the current industry average of around $600. That figure significantly undercut other DAC startups and suggested scalability potential that likely appealed to Occidental’s ambitions.

Enhanced Oil Recovery and Carbon Markets

Occidental has a long-standing interest in enhanced oil recovery (EOR), a process in which CO₂ is injected into depleted oil reservoirs to increase output. This practice aligns with the company’s carbon management goals, especially when using CO₂ captured from the air.

By incorporating Holocene’s lower-cost solution, Occidental may aim to reduce the economic barriers to combining DAC with EOR—creating both a climate mitigation narrative and an operational advantage in fossil fuel production.

An Occidental spokesperson told HeatMap that Holocene’s technology will now be used to advance DAC R&D efforts within the company, which is positioning itself as a leader in the emerging carbon removal sector.

Tax Incentives and Policy Drivers

The acquisition is also bolstered by the Inflation Reduction Act (IRA), which offers substantial tax credits for direct air capture projects. The size of the credit depends on the emissions profile of the power used and the end use of the captured CO₂, with enhanced oil recovery qualifying for incentives.

These credits, combined with private sector deals like the one with Google, have made DAC a more attractive investment space—despite skepticism from some environmental advocates about its real-world scalability and costs.

A Strategic Move in a Competitive Space

Occidental’s acquisition of Holocene signals a strategic push to own multiple points in the DAC value chain. With Carbon Engineering and now Holocene under its umbrella, the company is positioning itself not just as a carbon emitter, but as a potential carbon removal service provider—an image transformation many fossil fuel companies are seeking.

The race to reduce the cost of DAC technology is heating up as demand grows from corporations, governments, and climate commitments. Holocene’s integration into Occidental could accelerate commercial deployment and drive further innovation in a space once viewed as prohibitively expensive.

Stay tuned to The Horizons Times for updates on carbon capture technology, climate-focused M&A activity, and the evolving role of fossil fuel giants in the clean energy transition.