Sumitomo (TYO:8053) signed a deal with U.S. decarbonization startup Graphyte to set up a joint venture for a carbon dioxide removal (CDR) business, according to a Thursday release.

The Japanese trading house will own 49% stake in the joint venture, while Graphyte will hold a 51% stake.

The joint venture will initially look into the generation and sale of CDR credits centered on Graphyte's Arkansas-based Loblolly project, which uses rice hulls.

The Loblolly project has operated for more than two years and aims to remove 50,000 metric tons of carbon dioxide annually.

The venture will eventually expand its business portfolio by taking part in several projects across North America as well as potentially catering to Japanese companies, according to the release.