26 September 2021
Clifford Chance advises Climeworks on the project financing of the first ever commercial scale Carbon Dioxide air capture project
International law firm Clifford Chance is advising Climeworks on the project financing of "Orca", the world's largest Carbon Dioxide direct air capture (DAC) project in Hellisheidi, Iceland. The first of its kind project will remove carbon dioxide from the air and ensure its permanent, safe storage through underground mineralisation (by Climeworks’ partner Carbfix) within Icelandic basalt rock formations.
Climeworks is the world leader in DAC, and this is the first time that DAC technology has been deployed at this scale. DAC technology has a vital role to play in keeping global temperature rises below two degrees, a widely accepted global warning benchmark. Orca has a capacity of removing 4000 tons of carbon dioxide from the air per year.
This deal builds on a number of notable renewable energy and carbon mitigating projects Clifford Chance is working on, as the sector continues to see increased interest and uptake as the global drive towards net zero continues. Clifford Chance advises clients on the full breadth of energy transition-related opportunities from a project financing and development, regulatory, M&A, joint venture and construction standpoint.
The firm recently advised: Vattenfall in relation to the sale of Hollandse Kust Zuid, the largest offshore wind farm in the world once commissioned; the lenders on the project financing for a 2GW solar plant in the UAE; and easyJet on carbon offsetting agreements in relation to its commitment to offset the carbon from all domestic and international flights.
John Wilkins, Clifford Chance Partner said: "The International Energy Agency recently stated that we will need to pull a billion tons of CO2 out of the air each year by 2050 to meet our carbon neutral goals. Climeworks is at the forefront of developing the DAC technology that will help us do this and we are delighted to have assisted them get their first commercial scale project to this important stage and look forward to working with them in the future as they continue to rapidly scale up and drive down the cost of direct air capture.”
The Clifford Chance team is being led from London by John Wilkins, a Partner in the Energy and Infrastructure practice, with the assistance of Senior Associate, Prakruthi Gowda and Associate, Tom Dopstadt.