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Bank of America Corporation (NYSE:BAC) shares are trading higher premarket Thursday. The company is reportedly providing a major boost to climate technology, which has struggled to gain momentum through a landmark tax credit deal.
The bank will invest $205 million in exchange for tax credits from an ethanol producer, Harvestone Low Carbon Partners, that captures carbon at a plant in North Dakota, reported WSJ.
Notably, last October, Harvestone Low Carbon Partners began capturing carbon at its Underwood plant. This plant produces corn ethanol blended with gasoline to meet emission regulations and captures over 200,000 metric tons of carbon annually—equivalent to the emissions of about 42,000 gas-powered cars.
The deal represents one of the largest-ever investments in carbon capture and the first deal of its kind since the 2022 climate law enhanced tax credits for carbon capture and underground storage.
The report quoted Noah Zerance, a director on Bank of America's sustainable finance team, saying in an interview, “There has to be an element of trying to address the emitters that are in the market today and helping them decarbonize.”
As per the report, the deal underscores how investors are betting that certain aspects of the Biden administration's climate spending will endure despite potential policy changes in Washington.
Investors can gain access to the stock via First Trust Nasdaq Bank ETF (NASDAQ:FTXO) and Invesco KBW Bank ETF (NASDAQ:KBWB).
Price Action: BAC shares are up 0.15% at $40.56 premarket at the last check Thursday.
Photo Courtesy: Tero Vesalainen On Shutterstock
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
