ADNOC DAC Initiatives for 2025: Key Projects, Strategies and Partnerships
ADNOC’s Strategic Evolution in Direct Air Capture: From Ambition to Execution
ADNOC’s journey into Direct Air Capture (DAC) offers a compelling case study in how a national oil company can pivot toward decarbonization. By analyzing its activities, we can map the transition from broad strategic goals to targeted, asset-level investments, revealing a deliberate and calculated push to build a leadership position in the nascent carbon removal market.
Industry Adoption: A Shift from Broad Exploration to Focused Execution
Between 2021 and 2024, ADNOC’s approach to carbon management was characterized by broad, foundational moves. The company established ambitious goals, such as capturing 10 million tons of CO2 annually by 2030, and initiated wide-ranging partnerships to explore a portfolio of technologies. This included a landmark agreement with Occidental to study a megaton-scale DAC facility in the UAE and an equity investment in UK-based CCS developer Storegga. These actions signaled a strategic commitment to building capabilities across the carbon management value chain, from capture to storage and mineralization (via its 44.01 partnership). The period culminated in the launch of XRG, an $80+ billion investment platform, creating a powerful vehicle for future clean energy investments but without specific DAC projects yet attached.
The period from 2025 onward marks a distinct inflection point, shifting from strategic exploration to tactical execution. The most significant development is the proposed joint venture between ADNOC’s XRG subsidiary and Occidental to develop a specific DAC hub in South Texas. This move away from a general evaluation in the UAE to a targeted project in the US, complete with a potential investment figure of $500 million and a capture capacity of 500,000 tonnes, demonstrates a new level of commercial seriousness. This shift from high-level studies to evaluating a tangible joint venture for a specific asset represents a critical step-change. It indicates that ADNOC is no longer just exploring DAC as a concept but is actively positioning itself to build and operate commercial-scale facilities in strategically advantageous markets.
Investment: Capitalizing the Carbon Management Vision
ADNOC’s investment strategy has evolved from establishing large-scale capital pools to targeting specific DAC projects. Initially, the company’s financial commitments were broad, including a $15 billion allocation to its Habshan carbon capture project and the launch of the formidable $80+ billion XRG platform. These moves built the financial infrastructure for its decarbonization ambitions. The 2025 data reveals the first major deployment of this strategy toward DAC, with XRG considering a direct investment of up to $500 million into the Texas DAC hub. This progression from general allocation to project-specific capital demonstrates a maturing investment thesis.
Table: ADNOC’s Key Investments in Carbon Management & DAC
| Partner / Project | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| Occidental DAC Facility | May 16, 2025 | ADNOC’s XRG subsidiary considers investing up to $500 million in a joint venture for a 500,000 tonne/year DAC facility in South Texas. | Occidental and ADNOC’s XRG Agree to Evaluate Joint Venture to … |
| Lower-Carbon Solutions | 2025 | ADNOC allocated $15 billion towards lower-carbon solutions, new energies, and decarbonization technologies, framing the context for its DAC investments. | ADNOC and SOCAR to collaborate on hydrogen and carbon … |
| XRG Investment Platform | December 3, 2024 | Launched XRG, a global investment platform valued at over $80 billion, to focus on low-carbon energy and chemicals, creating a vehicle for DAC ventures. | ADNOC Launches $80+ Billion Global Investment Platform for Low … |
| Storegga | January 9, 2024 | Acquired a 10.1% equity stake in the UK-based CCS technology company to broaden its carbon management portfolio and gain access to expertise. | ADNOC makes strategic investment in Storegga, broadening carbon … |
| Natural Gas Decarbonization | October 11, 2023 | Awarded $17 billion in contracts for an offshore natural gas project incorporating carbon capture technology, aiming for net-zero emissions. | ADNOC Spends $17B for World’s First Net Zero Natural Gas Project |
| Habshan Carbon Capture | September 6, 2023 | Announced a final investment decision for one of the largest carbon capture projects in the MENA region, demonstrating commitment to large-scale CO2 management. | ADNOC to Invest in One of the Largest Integrated Carbon Capture … |
Partnerships: Building a Global DAC and CCS Ecosystem
ADNOC has strategically used partnerships to de-risk its entry into DAC and the broader carbon management sector. The relationship with Occidental is the central pillar, evolving from a 2023 agreement to evaluate opportunities into a preliminary engineering study for a 1 mtpa UAE facility, and now, in 2025, an evaluation of a specific joint venture in the US. This demonstrates a deepening, action-oriented collaboration. Simultaneously, partnerships with Storegga, Petronas, and Santos show a clear strategy to build a global network for CO2 storage, a critical enabler for any large-scale DAC deployment.
Table: ADNOC’s Key DAC and Carbon Management Partnerships
| Partner / Project | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| Occidental (South Texas DAC Hub) | May 16, 2025 | ADNOC’s XRG subsidiary and Occidental agreed to evaluate a joint venture for a DAC facility in South Texas, targeting the US market. | Occidental and ADNOC’s XRG Agree to Evaluate Joint Venture to … |
| US Energy Companies | May 2025 | Announced broader agreements with US energy firms, including collaborations on carbon capture, creating a favorable context for the Occidental DAC deal. | ADNOC Deepens Energy Partnerships with US Companies |
| SOCAR | Recent (2025) | Partnered with Azerbaijan’s state oil company to explore collaborations on carbon management, extending its strategic reach. | ADNOC and SOCAR to collaborate on hydrogen and carbon … |
| Petronas and Storegga | August (2025) | Partnered to assess the feasibility of CO2 storage in saline aquifers, reinforcing its focus on securing long-term storage solutions. | Carbon Storage – Enterprise News Egypt |
| 44.01 | November 5, 2024 | Advanced from a pilot to scaling up a carbon-to-rock mineralization project in Fujairah, developing an alternative permanent storage pathway. | ADNOC and 44.01 to Scale Up Carbon-to-Rock Project Following … |
| Petronas and Storegga | 2024 | Signed an agreement to explore CCS opportunities in Malaysia, diversifying its geographic focus for CO2 storage. | PETRONAS, ADNOC, and Storegga Forge Deal to Explore CCS in … |
| Occidental (UAE DAC Project) | October 3, 2023 | Commenced a preliminary engineering study for a 1 million tonne-per-year DAC facility in the UAE, the first planned at this scale outside the US. | Occidental and ADNOC to commence preliminary engineering study … |
| Santos | 2023 | Signed an agreement to pursue a global CCS platform, focusing on decarbonization in the Asia-Pacific region. | ADNOC and Santos to Pursue Global CCS Platform to Accelerate … |
Geography: A Strategic Expansion from the UAE to the US
ADNOC’s geographic focus shows a deliberate expansion from its home base to key international markets. The 2021–2024 period was heavily weighted toward the UAE, with plans for a megaton-scale DAC facility, the Habshan CCS project, and the 44.01 mineralization pilot in Fujairah. These projects aimed to establish domestic leadership and leverage existing infrastructure. At the same time, partnerships with Storegga (UK), Santos (Asia-Pacific), and Petronas (Malaysia) laid the groundwork for a global CO2 storage network.
The 2025 data marks a pivotal geographic expansion into North America. The decision to evaluate a DAC hub in South Texas with Occidental is a clear strategic move to enter the most developed market for CCUS, likely driven by the favorable policy environment of the Inflation Reduction Act (IRA) and the region’s established geological storage and energy infrastructure. This dual-pronged geographic strategy—building domestic capacity in the UAE while simultaneously establishing a commercial foothold in the US—allows ADNOC to mitigate risk, access different technology ecosystems, and tap into the world’s leading carbon management market.
Technology Maturity: Advancing from Engineering Studies to Commercial Ventures
The data reveals a clear progression in the maturity of ADNOC’s DAC initiatives. In the 2021–2024 timeframe, the technology was in an advanced evaluation phase. The key milestone was the commencement of a preliminary engineering study for a 1 mtpa DAC facility in the UAE. This moved the concept beyond a lab-scale pilot but stopped short of a final investment decision (FID), indicating that technical and commercial feasibility were still under assessment. The successful pilot with 44.01, leading to a scale-up plan, showed a similar progression for an adjacent mineralization technology.
By 2025, the focus has shifted toward commercial deployment. The plan to evaluate a joint venture for the South Texas DAC facility is a significant commercial step. Unlike an engineering study, a JV evaluation focuses on the business structure, financing, and market case for a specific operational asset. The defined capacity (500,000 tonnes) and potential investment ($500 million) signal that the project has moved past early-stage technical vetting toward a concrete business proposal. While other technologies like modular carbon capture remain in the pilot phase, DAC has clearly been elevated as a technology ready for commercial-scale investment, validated by the specific, actionable steps being taken in the US market.
Table: SWOT Analysis of ADNOC’s DAC Strategy
| SWOT Category | 2021 – 2023 | 2024 – 2025 | What Changed / Resolved / Validated |
|---|---|---|---|
| Strengths | Strong capital position for decarbonization, demonstrated by a $15B investment in the Habshan CCUS project. Strategic partnerships initiated with technology leaders like Occidental to evaluate large-scale DAC. | Launch of the $80B+ XRG platform provides a dedicated vehicle for low-carbon investments. Deepening partnerships with US energy firms, enabling up to $60B in investments. | ADNOC’s financial strength was formalized and operationalized through the XRG platform, which is now being used to evaluate specific DAC deals like the $500M Texas hub with Occidental. |
| Weaknesses | Reliance on partners (Occidental) for core DAC technology. Projects were in early, non-binding stages, such as “evaluating investment opportunities” and preliminary engineering studies. | DAC strategy remains heavily dependent on the Occidental partnership for its flagship projects. The portfolio is diversified in CCS but concentrated on one key partner for DAC. | The dependency on Occidental was validated and deepened, shifting from a broad UAE study to a specific US joint venture evaluation. This validates the partnership’s strength but also concentrates risk. |
| Opportunities | Exploration of megaton-scale DAC in the UAE. Building a global CCS portfolio through partnerships with Santos (Asia-Pacific) and an equity stake in Storegga (UK). | Entering the mature US market via the South Texas DAC hub evaluation to leverage favorable policies. Leveraging XRG to finance and scale DAC projects globally. | The opportunity to enter the US market, previously a general goal, has become a concrete action with the evaluation of the South Texas hub. The XRG platform now provides a clear pathway to finance this expansion. |
| Threats | Projects like the 1 mtpa DAC facility in the UAE faced uncertainty, pending outcomes of engineering studies. General market and technology risks for a nascent industry. | Increased competition and market activity, signaled by deals like Deep Sky and Rubicon Carbon’s offtake agreement, which are creating a competitive market for high-integrity carbon credits. | The threat has shifted from internal project risk (will the study prove feasible?) to external market risk (how to compete in a maturing carbon credit market?). The Deep Sky deal validates the market ADNOC is targeting but also signals new competitors. |
Forward-Looking Insights: The Path to Final Investment Decision
The latest data from 2025 signals that ADNOC is moving decisively toward commercializing its DAC ambitions. The central signal for the year ahead is the progress of the joint venture evaluation with Occidental for the South Texas hub. A final investment decision (FID) on this project would be a landmark moment, cementing ADNOC’s status as a key global player in DAC and marking the first major deployment of its XRG platform in this sector. Market actors should closely watch for announcements regarding the finalization of this JV and the start of construction.
Furthermore, ADNOC’s parallel investments in the full carbon management value chain—from capture technology pilots to CO2 mineralization (44.01) and saline aquifer storage studies (Petronas/Storegga)—are gaining momentum. This integrated approach is a key differentiator, suggesting ADNOC is not just investing in a capture technology but building a durable, end-to-end carbon removal business. The next logical step would be to see these disparate efforts converge, with future DAC projects potentially linked to these proprietary storage and mineralization solutions. The focus has clearly shifted from “if” to “how and where,” with the US market serving as the initial beachhead for commercial-scale execution.
Frequently Asked Questions
What is the main shift in ADNOC’s Direct Air Capture (DAC) strategy from 2024 to 2025?
The main shift is from broad strategic exploration to focused, tactical execution. Before 2025, ADNOC set ambitious goals and formed wide-ranging partnerships to explore a portfolio of technologies. From 2025 onwards, the strategy has become more concrete, focusing on specific, asset-level investments, highlighted by the proposed joint venture with Occidental to develop a 500,000 tonne/year DAC hub in South Texas. This marks a transition from studying concepts to actively building commercial facilities.
Why is ADNOC evaluating a DAC project in Texas instead of only focusing on the UAE?
ADNOC is expanding its focus to Texas to enter the most developed market for Carbon Capture, Utilization, and Storage (CCUS). This strategic move is driven by the favorable policy environment of the US Inflation Reduction Act (IRA), which provides significant financial incentives, and the region’s established geological storage and energy infrastructure. This dual strategy allows ADNOC to build a commercial foothold in a leading market while simultaneously developing its domestic capacity in the UAE.
What is XRG and what is its role in ADNOC’s DAC strategy?
XRG is a global investment platform launched by ADNOC, valued at over $80 billion, dedicated to investing in low-carbon energy and chemicals. It acts as the primary financial vehicle for ADNOC’s decarbonization ambitions. Its role in the DAC strategy became clear in 2025 when it was designated to evaluate a direct investment of up to $500 million in the South Texas DAC hub, marking the first major deployment of XRG’s capital toward a specific, commercial-scale DAC project.
Who are ADNOC’s key partners in its carbon management strategy?
Occidental is ADNOC’s central partner for DAC technology, with the collaboration evolving from early-stage studies in the UAE to a proposed joint venture for a specific facility in the US. Beyond DAC technology, ADNOC has built a global ecosystem for CO2 storage and management through partnerships with Storegga (UK-based CCS developer), Santos (Asia-Pacific), Petronas (Malaysia), and 44.01 (carbon mineralization in the UAE).
Is ADNOC only investing in DAC, or is its carbon management strategy broader?
ADNOC’s strategy is much broader than just DAC. It is building an end-to-end carbon management business. This includes large-scale point-source capture projects like the Habshan facility, developing CO2 storage solutions in saline aquifers with partners like Petronas and Storegga, and pioneering permanent storage through carbon-to-rock mineralization technology with its partner 44.01. This integrated approach ensures it controls the full value chain, from capture to permanent storage.
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