Pods, operated by Carbfix, containing technology for storing carbon dioxide underground, in Hellisheidi, Iceland, on Tuesday, Sept. 7, 2021. Startups Climeworks AG and Carbfix are working together to store carbon dioxide removed from the air deep underground to reverse some of the damage CO2 emissions are doing to the planet. Photographer: Arnaldur Halldorsson/Bloomberg via Getty Images
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 in spurring the carbon-capture market.
On Tuesday the companies announced the creation of Frontier, which plans to purchase $925 million worth of permanent carbon removal from companies that are developing the 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 chipping in — and committing to purchase some of the carbon-capture solutions.
Stripe will also provide customers to Frontier through its Stripe Climate program, which allows online sellers using the company’s platform to devote a portion of sales to carbon removal.
The goal of the investment is to turbocharge the nascent industry.
The U.N.’s Intergovernmental Panel on Climate Change has estimated that to limit global warning to 1.5 degrees Celsius above preindustrial levels, an average of 6 billion tons of carbon dioxide will have to be removed each year from the atmosphere by 2050. Fewer than 10,000 tons of carbon dioxide have been captured to date.
The Frontier initiative suggests momentum is starting to build in the 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 cFarbon-removal solutions.
“This is changing in part because we are not succeeding on climate at the speed and scale required,” Friedmann said. “In short: We’re failing and we need a bigger boat — one that includes all serious options for mitigation.”
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, counterbalancing ‘hard-to-abate’ residual emissions,” the report said.
The Frontier development is among other company and government initiatives that are sinking billions into the technology.
For example, the Swiss carbon sequestration company Climeworks raised a $650 million equity round of funding on April 5. And in the U.S., the Bipartisan Infrastructure Bill included $3.5 billion in direct investment by the federal government in carbon-capture technologies, while both the U.K. and European Union have committed to capture 5 million tons per year of carbon dioxide.