Pods, operated by Carbfix, with underground carbon dioxide storage technology, in Hellisheidi, Iceland, on Tuesday, September 7, 2021. Startups Climeworks AG and Carbfix are teaming up to store carbon dioxide removed from the air deep underground to create a part of the damage that CO2 emissions do to the planet. Photographer: Arnaldur Halldorsson/Bloomberg via Getty Images
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Stripe, a provider of online payment technology, has partnered with several other companies, including Google parent Alphabet and Facebook parent company Meta, to commit to spending nearly $1 billion to boost the carbon capture market.
On Tuesday, the companies announced the formation of Frontier, which is committed to buying $925 million in permanent carbon removal from companies developing the technology over the next nine years.
Frontier becomes a wholly owned subsidiary of Stripe. Alphabet, Meta, e-commerce platform Shopify and consulting giant McKinsey are rolling up their sleeves and committing to purchase some of the carbon capture solutions. Stripe will also supply customers to Frontier through its Stripe Climate program, which allows online merchants using the Stripe platform to spend a portion of their sales on carbon removal.
The purpose of the investment is to boost the emerging industry.
The UN Intergovernmental Panel on Climate Change estimates that to limit the global warning to 1.5 degrees above pre-industrial levels, an average of 6 billion tons of carbon dioxide will need to be removed from the atmosphere by 2050. But less than 10,000 tons of carbon dioxide has been captured so far.
So momentum begins to build in space.
“Sentiment is changing about both carbon capture and carbon dioxide removal,” said Julio Friedmann, chief scientist at Carbon Direct, which invests in and advises companies on carbon removal solutions.
“This is changing in part because we are failing in terms of climate at the required speed and scale,” he added. “Basically, we’re failing and we need a bigger boat — one that encompasses all serious mitigation options.”
The IPCC’s Sixth Assessment Report, released April 4† specifically mentioned the importance of carbon capture, saying it is “necessary to achieve net zero CO2 and GHG emissions both globally and nationally, offsetting the hard-to-reduce residual emissions,” the report said.
Following Frontier’s announcement, companies and governments have invested billions in technology.
Swiss carbon sequestering company Climeworks, for example, raised a $650 million capital round on April 5. In the US, the Bipartisan Infrastructure Bill included $3.5 billion in direct investment by the US government in carbon capture technologies, while both the UK and the EU have pledged to capture 5 million tons of carbon dioxide per year.
Financing to keep the flywheel turning
The advanced market-promise financing model was used in 2009 to develop pneumococcal vaccines for low-income countries. A group of financiers teamed up with Gavi, UNICEF and the World Bank to $1.5 billion in purchases to boost vaccine development. That AMC helped vaccinate millions of children.
This is the first time the model has been used to fund carbon removal technologies on a large scale.
Frontier’s role will be to collect financial commitments from companies and governments that want to purchase carbon capture solutions to meet their net-zero commitments, audit the suppliers of those solutions, and then pay the suppliers as soon as the solutions are available. are delivered.
The group plans to release more details about what it will spend the money on later this year. Companies will be selected if their technologies can store carbon for more than 1,000 years, have a path to being affordable at scale – defined as less than $100 per tonne by 2040 – and have a path to more than half a gigatonne of carbon by 2040. to remove, among other factors.
The news was welcomed by Facebook’s former chief technology officer Mike Schroepfer, who recently announced he will be devoting his time to fighting climate change.
“This is huge and I’m super proud meta is a launch partner,” Schroepfer wrote on Twitter. “Even the most conservative climate models say we need to remove carbon dioxide from the atmosphere to avert the worst of the climate crisis. Lots of cool technologies exist, but they don’t have a market for their product.”
However, not everyone thinks the focus on carbon removal technologies is a good thing.
“Honestly, I really wish those same companies would invest the same amount in clean energy solutions,” Michael E. Mann, a professor of atmospheric sciences at Penn State, told CNBC. “As I discuss in ‘The New Climate War,’ there is no evidence that carbon removal can be implemented at the scale necessary to reduce global carbon emissions in the time frame necessary,” said Mann, who is also director of the Penn State Earth System Science Center (ESSC).
Globally, CO2 emissions should be reduced by 50% this decade, Mann said.
Carbon capture “could play a role later, but for now a rapid and dramatic transition from burning fossil fuels to renewable energy was needed,” Mann said.
“The current Russian invasion of Ukraine, made possible by Europe’s reliance on their gas and oil, reminds us of the ongoing dangers of our reliance on fossil fuels,” Mann told CNBC. “What we need, so solve this problem at the source, don’t put plaster on the edges.”