Apple Launches $200 Million Fund to Remove Carbon From Air

Apple wants to invest in companies that restore forests and grasslands naturally versus the artificial carbon capture and storage technology backed by fossil fuel producers.

Apple Inc.  (AAPL) - Get Free Report is literally doubling down on nature to fight climate change.

The computing giant recently announced a $200 million Restore investment fund that will back companies developing natural ways to remove carbon from the atmosphere. The new capital is on top of a similar $200 million fund it launched last year.

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“The Restore Fund is an innovative investment approach that generates real, measurable benefits for the planet, while aiming to generate a financial return,” Lisa Jackson, Apple’s vice president of Environment, Policy, and Social Initiatives, said in a statement. “The path to a carbon neutral economy requires deep decarbonization paired with responsible carbon removal, and innovation like this can help accelerate the pace of progress.”

The key word here is “responsible” carbon removal. Apple is focusing on restoring natural ecosystems like forests, grasslands, and wetlands where trees and plants absorb carbon and release oxygen through photosynthesis. The company said the first three projects it backed from the first Restore Fund will remove 1 million metric tons of carbon dioxide a year by 2025.

Carbon capture captures investors attention

However, the technology that has attracted considerably more attention and dollars are man-made systems designed to directly suck carbon out of the air and store the gas in giant underground storage tanks.

Critics say such technologies are unproven. More notably, some of the biggest backers of the technology are giant oil and gas producers like ExxonMobil Corporation  (XOM) - Get Free Report and Occidental Petroleum Corporation  (OXY) - Get Free Report, a fact that environmentalists obviously don’t like.

"We should not be talking about eliminating fossil fuels," Occidental CEO Vicky Hollub previously said. "We should be talking about eliminating emissions."

Nevertheless, investors are flocking to such startups. In the second quarter alone last year, venture capitalists poured $841.5 million into 11 deals, according to a report by Pitchbook. The figure is larger than any previous quarter and nearly double the previous four quarters combined.

“Carbon capture technologies are experiencing high global interest and investment, and the regulatory environment has created pressures and incentives that will support their continued growth in the future,” the report said.

Microsoft is trying a little bit of everything

Investors like artificial carbon capture and storage technologies because companies can easily integrate such systems into existing infrastructure like power stations and industrial facilities like oil fields.

“This integration makes it a very appealing investment to those looking to extend the life of their carbon-intensive assets during the pivot to a low-carbon paradigm,” the Pitchbook report said, “essentially allowing decarbonization without the immediate upfront costs of building new facilities.”

For example, Occidental is currently building what will be the world's largest carbon capture and storage plant in the Permian basin, a region in West Texas and New Mexico already producing much of the American oil supply. The company hopes to complete the construction of the plant, designed to remove and store 1 million metric tons of carbon dioxide by 2024.

Microsoft Corporation  (MSFT) - Get Free Report Apple’s rival, has adopted a try them all approach. The software giant has invested in “blue carbon” projects, in which coastal ecosystems like mangrove forests, tidal marshes, and seagrass meadows can naturally capture and store carbon. Microsoft is also backing CarbonCapture, a company building a massive carbon capture facility in Wyoming.