Pods, operated by Carbfix, contain technology for storing carbon dioxide underground, in Hellisheidi, Iceland, Tuesday, September 7, 2021. Startups Climeworks AG and Carbfix are working together to store carbon dioxide removed from the air deep in the earth to reverse some of the damage that Carbon dioxide emissions are causing damage to the planet. Photographer: Arnaldur Halldorsson/Bloomberg via Getty Images
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Online payments technology provider Stripe is teaming up with several other companies, including Google parent Alphabet and Facebook parent Meta, to commit nearly $1 billion to stimulate the carbon capture market.
The companies announced Tuesday the creation of Frontier, which is committed to purchasing $925 million worth of permanent decarbonization from companies developing technology over the next nine years.
Frontier will be a wholly owned subsidiary of Stripe. Alphabet, Meta, e-commerce platform Shopify and consulting giant McKinsey are committing to buy some carbon capture solutions. Stripe will also provide Frontier customers with its Stripe Climate program, which allows online sellers to use the Stripe platform to commit a portion of sales to decarbonization.
The aim of the investment is to revitalize the emerging industry.
The United Nations Intergovernmental Panel on Climate Change has estimated that to reduce the global warning to 1.5 degrees above pre-industrial levels, 6 billion tons of carbon dioxide per year must be removed from the atmosphere by 2050. But less than 10,000 tons of carbon dioxide Until now.
So momentum began to form in space.
“Sentiment is changing about both carbon capture and carbon dioxide removal,” said Julio Friedman, chief scientist at Carbon Direct, which invests in and advises companies on decarbonization solutions.
“This is changing in part because we haven’t succeeded in the climate at the required speed and scale,” he added. “In short: we’re failing and we need a bigger boat — a boat that includes all the serious options for mitigation.”
The Sixth Assessment Report of the Intergovernmental Panel on Climate Change, released on April 4, specifically mentioned the importance of carbon sequestration, saying that it is “necessary to achieve net net emissions of carbon dioxide and greenhouse gases at global and national levels, and to offset remaining emissions” which are difficult to mitigate . . said the report.
After the limits were announced, companies and governments were sinking billions into technology.
For example, Swiss carbon sequestration company Climeworks raised a $650 million funding round on April 5. It committed to sequestering 5 million tons of CO2 annually.
Funding to turn the flywheel
The Advanced Market Commitment financing model was used to develop pneumococcal vaccines for low-income countries in 2009. A group of funders collaborated with Gavi, UNICEF and the World Bank to commit $1.5 billion in purchases to spur vaccine development. AMC has helped vaccinate millions of children.
This is the first time that the model has been used to fund large-scale decarbonization technologies.
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 pledges, screen suppliers of these solutions, and then pay the suppliers once the solutions are delivered.
The group plans to announce more details about where it will spend the money 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 on a large scale — defined as less than $100 a ton by 2040 — and have a path to remove more than half a gigatonne of carbon by 2040, from Among other factors.
Cheered to the news, Mike Schroepfer, a former Facebook chief technology officer, recently announced that he will be spending his time fighting climate change.
“This is huge and I am so proud dead Schroepfer said on Twitter: “Even the most conservative climate models say we need to get CO2 out of the atmosphere to avoid the worst of the climate crisis. There are many great technologies out there but they don’t have a market for their products.”
However, not everyone sees focusing on decarbonization technologies as a good thing.
“Honestly, I really wish these same companies were investing the same amount of money in clean energy solutions,” Michael E. Mann, a professor of atmospheric sciences at Penn State told CNBC. Mann, who is also director of the Pennsylvania Earth System Science Center (ESSC), said.
Globally, carbon emissions must be reduced by 50% this decade, Mann said.
Carbon sequestration “could play a role later down the road, but what we need right now is a rapid and dramatic transition away from fossil fuel combustion to renewable energy,” Mann said.
“The current Russian invasion of Ukraine, thanks to Europe’s dependence on gas and oil, is a reminder of the continuing dangers of our dependence on fossil fuels,” Mann told CNBC. “What we need is to solve this problem at its source, not to put a bandage on the limbs.”