The tech giants committed to becoming initial customers for efforts to sequester greenhouse gas as part of the nearly $1 billion Frontier initiative
(Bloomberg) — A new group of early-stage carbon-removal startups received pledges of $11.5 million from Stripe Inc. and Shopify Inc. as the Silicon Valley companies continue their effort to create a robust market for technologies that remove carbon dioxide from the atmosphere.
This is the second batch of startups working on ways to sequester greenhouse gas, such as storing CO₂ deep in the ground or pulling it out of the ocean, that have won support from Frontier, a $925 million effort started last year inspired by similar projects at the two technology giants. The goal is to select promising carbon-removal companies and to help them get off the ground by committing to be an early customer — often the first ever for these startups — or by providing research grants.
The announcement on Thursday included funding for nine startups doing work in the US, Kenya, Brazil, Germany, Canada and Australia. They include Captura, which removes CO₂ from the ocean; Cella, which is mineralizing CO₂ by injecting it into volcanic rock formations; and Kodama Systems, which is burying biomass thinned from forests to prevent it from decomposing. In June, Frontier selected six companies out of 26 applicants for its initial round.
Carbon-removal technology is in nascent stages and remains quite expensive. But climate experts project that by 2050, in order to meet net zero goals, the world will need to be removing 5 billion tons of carbon from the air each year. That leaves an enormous gap to close in the decades ahead. The technologies to do so need to be developed, and the price of removing a ton of carbon needs to drop drastically.
With this second round of startups, Frontier is providing research grants to two recipients and promising to pay a total of $3.5 million to seven others in the form of a “pre-purchase agreement” while the technology is still developing. Another $7 million is set aside to buy more from those seven companies if they meet certain milestones. Right now, only Shopify and Stripe have made financial commitments to these companies, although Meta Platforms Inc., Alphabet Inc. and McKinsey & Co. have agreed to buy carbon removal through Frontier when the companies are more mature.
Startups selected in Frontier’s second batch are trying to make use of industrial waste streams such as mine tailings and brine from desalination plants. It’s a particularly encouraging trend, said Joanna Klitzke, who works on Stripe’s climate team, because it allows them to use cheaper inputs to capture carbon more cost-effectively.
Progress can be heartening and disheartening at the same time. Nan Ransohoff, the head of Frontier and of Stripe’s climate projects, said that the commitment to Frontier is nothing compared to what might have to be spent in the future to remove enough carbon from the air — by some estimates as much as $500 billion a year. At that size, either governments will have to be buying carbon removal directly or other major policy changes will be needed.
“It’s very unlikely that the voluntary markets by themselves are going to get to the scales needed,” Ransohoff said. “We’re going to need policy to help this market scale eventually.”
- READ MORE: Bloomberg 50: Nan Ransohoff, Carbon-Removal Champion
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