Big names in technology and consulting just pledged $925 million to buy captured carbon by 2030. The promise – made by Stripe, Alphabet, Meta, Shopify and McKinsey – mark a major investment in carbon removal technologies.
Her new initiative, dubbed Frontier, aims to expand use of the still-emerging technology while making it more affordable for other companies also looking to buy captured carbon to offset some of the planet’s pollution they produce.
The technology is still prohibitively expensive
Facilities already exist that can filter this CO2 from the air, as well as efforts to store CO2 in rock formations or in the ocean once it has been captured. But the existing capacity to do so is tiny compared to what some climate experts say is necessary. Also, the technology is still prohibitively expensive.
Frontier aims to reduce costs by increasing demand for the service. It will eventually act as a sort of broker between buyers who want to pay for greenhouse gas emissions reductions and suppliers who can do it for them. It has to lay much of the groundwork for this type of market – from creating criteria to screen carbon removal projects to developing a system for lending to companies that show how much carbon they’ve paid to do to remove it from the atmosphere.
Such a carbon removal market needs to tread carefully to avoid some of the pitfalls of similar carbon offset markets. There is a history of carbon offset projects that have failed to sequester carbon over the long term, despite companies investing in them claiming they would essentially erase their carbon footprint.
Carbon removal is not intended as a corporate jail escape
Crucially, many experts who have called for greater carbon removal stress that this is primarily intended to offset pollution, which is the most difficult to prevent. These “hard-to-reduce” emissions typically come from heavy industries like cement and steel making that don’t have readily available renewable energy. Carbon removal is not intended as an exit card for companies that need to take big strides to curb their pollution in the first place.
Frontier is 100% owned by Stripe, while the other companies provide the initial funding. The new subsidiary builds on Stripe’s previous efforts to promote carbon removal technologies. Stripe initially committed to spending $1 million per year in 2019 to remove CO2 from the air. The following year, the online payment platform began offering its customers the option to donate a portion of the money they earn from each sale to carbon removal projects. Contributions from these customers will also feed into the Frontier initiative.