Zurich-based Direct Air Capture (DAC) carbon removal company Climeworks announced today that it has signed an agreement with Morgan Stanley to permanently remove 40,000 tons of CO2 through 2037.

DAC technology extracts CO2 directly from the atmosphere for use as a raw material or permanent removal when combined with storage. According to Intergovernmental Panel on Climate Change (IPCC), scenarios that limit warming to 1.5°C include carbon dioxide removal methods scaling to billions of tons of removal annually over the coming decades, with DAC positioned to potentially account for a significant portion of the total.

Founded in 2009, Zurich-based Climeworks has emerged as a leading DAC provider. The company recently announced the start-up of Mammoth, the largest DAC plant in the world to date, with anticipated capability to remove up to 36,000 tons of CO2 per year, and it is currently participating in the development of three megaton hubs in the U.S. that were selected by the US Department of Energy (DOE) for public funding of more than $600 million, including the Louisiana-based Project Cypress, which has recently been granted an initial $50 million to kickstart the project.

Earlier this year, Climeworks revealed its new Generation 3 DAC technology, providing breakthrough improvements in efficiency and performance, and forming a step in the company’s plan to scale up to megaton carbon removal capacity. The new technology is slated to be rolled out as part of the megaton-scale Project Cypress DAC Hub.

According to Climeworks, the new agreement with Morgan Stanley marks its second largest contract to date, and will accelerate its technology scale-up in the U.S., where it is the anchor technology provider for Project Cypress.

Clmeworks co-founder and co-CEO Christoph Gebald said:

“Investing in carbon removal is more than an environmental responsibility—it’s a strategic business move. By securing access to high-quality carbon removals now, companies position themselves ahead of the curve of future regulatory changes and competitive pressures. Orca and Mammoth represent just the beginning of a future trillion-dollar industry and Morgan Stanley understands the benefits of entering the market today.”

The agreement is Morgan Stanley’s first purchase of DAC carbon credits. The firm set a goal in 2020 to achieve net zero financed emissions by 2050, and has a target to mobilize $1 trillion in sustainable finance by 2030.

Jessica Alsford, Chief Sustainability Officer at Morgan Stanley, said:

“As a financial institution, Morgan Stanley plays an important role in helping to direct capital toward low-carbon solutions. 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.”