Stripe, Alphabet, Meta, Shopify, McKinsey Spur Carbon Capture Market

Sep. 7, 2021 Tuesday in Helleshaidi, Iceland powered by Corfix with technology for storing carbon dioxide underground. Startups ClimWorks AG and Corpfix are working together to store carbon dioxide removed from the ground. CO2 emissions could be harmful to the planet. Photographer: Arnold Halderson / Bloomberg via Getty Images

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Stripe, an online tariff-technology provider, has teamed up with several companies, including Google Parent Alphabet and Facebook parent meta, to spend nearly $ 1 billion to stimulate the carbon-capture market.

On Tuesday, companies announced the creation of Frontier, which plans to buy $ 925 million worth of permanent carbon emissions from technology makers over the next nine years.

Frontier will be a wholly owned subsidiary of Stripe. Alphabet, Meta, e-commerce site Shopify and consulting firm McKinsey are all shipping – and are committed to buying some carbon-capture solutions.

Stripe will provide customers to Frontier through its Stripe Climate program, which allows online retailers to allocate a portion of their sales to carbon removal using the company’s site.

The goal of the investment is to turbocharge the new industry.

The UN Intergovernmental Panel on Climate Change estimates that an average of 6 billion tons of carbon dioxide must be removed from the atmosphere by 2050 to control the global pre-industrial level of 1.5 degrees Celsius. Less than 10,000 tons of carbon dioxide have been captured to date.

The Frontier initiative says it is starting to build momentum in space.

“The perception is changing about both carbon capture and carbon dioxide removal,” said Julio Friedman, chief scientist at Carbon Direct, which advises investing in companies on cFarbon-elimination solutions.

“It’s becoming a part of it, because we’re not succeeding in the climate at the required speed and level,” Friedman said. “In short: we are failing, we need a bigger boat – that includes all the serious options for mitigation.”

The IPCC’s Sixth Assessment Report, released on April 4, noted the importance of carbon capture and said that “achieving net zero CO2 and GHG emissions globally and nationally is essential to balance ‘hard-reducing’ residual emissions.” Said.

There is also borderline growth in other company and government initiatives that are sinking billions in technology.

For example, Swiss carbon sequestration firm ClimWorks raised $ 650 million in equity round funds on April 5. In the United States, the bilateral infrastructure bill includes $ 3.5 billion in federal direct investment in carbon-capturing technologies. And the EU is committed to capturing 5 million tons of carbon dioxide a year.

Funds to get the flywheel twisted

In 2009 the Advanced Market Assurance Fund model was used to develop pneumococcal vaccines for low-income countries. $ 1.5 billion was purchased to stimulate the growth of vaccines. That AMC has helped vaccinate millions of children.

But this is the first time this model has been used to finance carbon-removal technologies.

Frontier’s mission is to collect financial obligations from companies and governments seeking to purchase carbon-capture solutions.

The committee plans to announce more details on where the money will be spent later this year. Companies’ technologies that have stored carbon for more than 1,000 years will be selected if they have a path to be affordable – limited to less than $ 100 per tonne by 2040 – and a path to eliminate half a gigaton of carbon by 2040. , Among other factors.

Mike Shroffer, Facebook’s former chief technology officer, recently announced that he will be devoting his time to combating climate change.

“It’s huge and I’m very proud of it Meta Is a publishing partner, “Schrfer said on Twitter. There are many great technologies but there is no market for their product. “

However, not everyone sees it as a good thing to focus on carbon removal technologies.

“Honestly, I want the same companies to invest the same amount of money in clean energy solutions,” said Michael E. Schmidt, a professor of atmospheric science in Penn State. Deer told CNBC. “As I argue in the ‘new climate war’, there is no evidence that carbon emissions can be sufficient to prevent global carbon emissions in a timely manner,” said Director Mann. Penn State Earth System Science Center (ESSC).

Globally, Deer said, carbon emissions should be reduced by 50% this decade.

Carbon capture could “then play a role on the road, but what is needed now is a rapid and dramatic transition from fossil fuels to renewable energy,” he said.

“The current Russian invasion of Ukraine, which was activated by Europe’s reliance on gas and oil, is a reminder of the continuing dangers of our dependence on fossil fuels,” Mann told CNBC. “This problem must be solved at its source, and band-aids should not be used at the edges.”

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